IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. ITA No.28 of 2003 Reserved on: 7.7.2009 Decided on:31.7.2009 Commissioner of Income Tax …Appellant. Versus M/s H.P. State Industries Development Corporation Ltd. …Respondent. Coram The Hon’ble Mr. Justice Jagdish Bhalla, C.J. The Hon’ble Mr. Justice Rajiv Sharma, J. Whether approved for reporting ?1. For the Appellant : Mr. Vinay Kuthiala, Advocate. For the Respondent : Mr. Raman Sethi, Advocate. The core question on which the arguments have been advanced by the learned counsel for the appellant is that: “whether when there was no taxable income or tax assessed for payment during a particular year, the question of evasion of tax and consequently penalty under section 271 (1) (c) does not arise? The appellate authority has ordered that after making an addition of Rs. 4,07,256/- the net result still remained a loss of Rs. 65,68,810.00. The appellate authority thus came to the conclusion that no penalty was 1 Whether the reporters of Local Papers may be allowed to see the judgment? 2 leviable under section 271 (1) (c) of the Income Tax Act, 1961. The Punjab and Haryana High Court in CIT versus Prithipal Singh and Company, 183 ITR 69 on the same and similar facts has come to the conclusion that when there was no taxable income or tax assessed for payment during a particular year, the question of evasion and consequently imposition of penalty did not arise. This judgment has been affirmed by their Lordships of the Hon’ble Supreme Court in Commissioner of Income Tax versus Prithipal Singh and Company, 249 ITR 670. Accordingly, we are of the considered opinion that the question raised by way of present appeal is no more res integra in view of the judgment of the Punjab and Haryana High Court being affirmed by the Hon’ble Supreme Court in Commissioner of Income Tax versus Prithipal Singh and Company, 249 ITR 670. Consequently, the substantial question is answered accordingly and the appeal is dismissed. No costs. (Jagdish Bhalla), C.J. 31.7.2009 (Rajiv Sharma ), J. *awasthi*