1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.212 OF 2009 The Commissioner of Income Tax ..Appellant. V/s. M/s. Hiralal Maganlal & Co. ..Respondent. Mr. A.S.Shivsharan for appellant. None for respondent. CORAM : DR. D.Y.CHANDRACHUD AND J.P.DEVADHAR, JJ. DATED : 25TH JANUARY, 2010 P.C. :- 1. The following substantial questions of law has been formulated by the revenue against the order of the ITAT dated 11th July, 2006. a) Whether in the facts and circumstances of the case and in law the Tribunal is right in deleting the penalty only on the ground that there is no positive income ? b) Whether in the facts and circumstance of the case and in law, explanation 4 to Sec. 271(1)(c) would become operative retrospectively as the explanation is nothing but a clarification ? 2. The Tribunal has held that in the present case where the returned income was a loss and even after the assessment there was no positive income, no penalty could be levied in view of the judgment of this Court in the case of Orient Syntex Ltd. [Income Tax Appeal No.1069 of 2000 2 dated 25 th July, 2005]. The view taken by the Tribunal is not in consonance with the law laid down by the Supreme Court in Commissioner of Income Tax V/s. Gold Coin Health Food (P) Ltd. (2008) 304 ITR 308 (SC)]. In the circumstances, the impugned order of the Tribunal dated 11th July, 2006 is set aside and the proceedings are remanded back to the Tribunal for reconsideration on merits. The appeal is disposed of accordingly. There shall be no order as to costs. (J.P.DEVADHAR, J.) (DR. D.Y.CHANDRACHUD, J.)