1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. INCOME TAX APPEAL NO.623 OF 2007 The Commissioner of Income Tax-2 ..Appellant. Vs. M/s. Pharmed Limited ..Respondent. .... Mr. Vimal Gupta for the Appellant. Mr. Atul K. Jasani for the Respondent. ..... CORAM : DR.D.Y.CHANDRACHUD & J.P.DEVADHAR, JJ. 20th January, 2010. P.C. : 1. The appeal was admitted on the following substantial question of law : (A) “ Whether on the facts and in the circumstances of the case and in law, the Tribunal is right in dismissing the appeal of revenue by holding that penalty u/s 271(1)(c) cannot be levied in case where the ultimately assessed income is a loss?” 2. The Tribunal has dismissed the appeal of the revenue, relying upon the judgment of the Supreme Court in the case of Prithipal Singh and Co. (249 ITR 670) and the judgment of this Court in the case of Orient Syntex Limited (ITA 1069 of 2000 decided on 25th July, 2005). In view of the law laid down by the Supreme Court in CIT v. Gold Coin Health Food Pvt. Ltd. (2008) 304 ITR 304 (SC)), the impugned order of the Tribunal would have 2 to be set aside and the proceedings remitted back for a decision afresh on merits. The Supreme Court having held that explanation 4 to Section 271(1) (c) is clarificatory and non substantive, the earlier judgment in the case of Virtual Soft Systems (2007) 289 ITR 83 (SC)) was overruled. In the circumstances, this appeal is disposed of by setting aside the impugned order of the Tribunal and by remitting the proceedings back to the Tribunal for a fresh decision. In the circumstances, there shall be no order as to costs. (Dr. D.Y. Chandrachud, J.) (J.P. Devadhar, J.)