COMMR.OF INCOME TAX-I,AHMEDABAD vs GOLD COIN HEALTH FOOD PVT.LTD.

The Supreme Court expressed doubt regarding the correctness of the judgment in Virtual Soft Systems Ltd. v. Commissioner of Income Tax, Delhi (2007 (9) SCC 665), particularly concerning the applicability of penalties under Section 271(1)(c) of the Income Tax Act, 1961 when the returned income is a loss. The Court noted that the amendment made by the Finance Act, 2002, clarifies that penalties can be imposed regardless of whether tax is payable, emphasizing that the amendment is clarificatory and applicable retrospectively. A reference to a larger bench was made to resolve the conflicting interpretations of the amendment's effect.