JT. COMMISSIONER OF INCOME TAX, SURATversusSAHELI LEASING & INDUSTRIES LTD.

                    [2010] 6 S.C.R. 747

      JT. COMMISSIONER OF INCOME TAX, SURAT                      A
                            v.
          SAHELI LEASING & INDUSTRIES LTD.
             (Civil Appeal No. 4278 of 2010)
                        MAY 7, 2010
                                                                 B
[K.G. BALAKRISHNAN CJI, DEEPAK VERMA AND DR.
               B.S. CHAUHAN, JJ.]

     Income Tax Act, 1961 - s.271 (1)(c) - Levy of penalty
under - Where assessed income is nil or loss - Permissibility    c
of - Held: Penalty is leviable, even if no tax was payable.
    Judgment:
    Cryptic judgment - Held: Brevity without clarity is likely
to enter the realm of absurdity, which is impermissible -        D
Guidelines regarding writing of judgment - Reiterated.
   . Writing of judgment - Guidelines issued by Supreme
Court regarding manner of writing judgments - Non-
adherence of - Deprecated.
                                                                 E
     The question for consideration in the present
appeals was whether penalty can be levied u/s.271(1)(c)
of Income tax Act, where assessed income is loss, despite
the fact that Explanation 4(a) was added to the Act and
subsequently, further clause (a) was replaced by another         F
clause (a) which is clarificatory in nature.
           Allowing the appeals, the Court
     HELD: 1.1. The Division Bench of High Court has
decided the question Of law as projected before it in the
appeal preferred u/s.260(A) of the Income Tax Act, 1961,         G-
in a most casual manner. The order is not only cryptic but
does not even remotely deal with the arguments which
were sought to be projected by the Revenue before it. It
is true that brevity is an art but brevity without clarity is
                            747                                  H
                         1\
    748    SUPREME COURT REPORTS                [2010] 6 S.C.R.


A likely to enter into the realm of absurdity, which is
  impermissible. This is what has been reflected in the
  impugned order. This Court, time and again, reminded
  the courts performing judicial functions, the manner in
  which judgments/orders are to be written but, those
B guidelines issued from time to time are not being adhered
  to. Therefore, the Court once again would like to reiterate
  few guidelines for the Courts, while writing orders and
  judgments to follow the same. [Paras 3, 4, 5 and 6) [751-
  E-H; 752-A]
c        1.2. The guidelines are only illustrative in nature, not
    exhaustive and can further be elaborated looking to the
    need and requirement of a given case: (i) Nothing should
    be written in the judgment/order, which may not be
    germane to the facts of the case. It should have a co-
o   relation with the applicable law and facts. The ratio
    decidendi should be clearly spelt out from the judgment/
    order. (ii) After preparing the draft, it is necessary to .go
    through the same to find out, if anything, essential to be
    mentioned, has escaped discussion. (iii) The ultimate
E   finished judgment/order should have flow and perfect
    sequence of events, which would continue to generate
    interest in the reader. (iv) Appropriate care should be
    taken not to load it with all legal knowledge on the
    subject as citation of too many judgments creates more
F   confusion rather than clarity. The foremost requirement
    is that leading judgments should be mentioned and the
    evolution that has taken place ever since the same were
    pronounced and thereafter, latest judgment in which all
    previous judgments have been considered, should be
G   mentioned. While writing judgment, psychology of the
    reader has also to be borne in mind, for the perception
    on that score is imperative. (v) Language should not be
    rhetoric and should not reflect a contrived effort on the
    part of the author. (vi) After arguments are concluded, an
H   endeavour should be made to pronounce the judgment
JT. COMMISSIONER OF INCOME TAX, SURAT v. SAHEL! 749
           LEASING & INDUSTRIES LTD.

at the earliest and in any case not beyond a period of           A
three months. Keeping it pending for long time sends a
wrong signal to the litigants and the society. (vii) It should
be avoided to give instances, which are likely to cause
public agitation or to a particular society. Nothing should
be reflected in the same which may hurt the feelings or          B
emotions of any individual or society. [Para 71 [752-B-H;
753-A-C]
    1.3. In the instant case, considering the important
question of law and its wide repercussions, it was least
expected from the Division Bench of the High Court to            C
have dealt with the issue more seriously, keeping in mind
the question of law that was being answered by it. At the
High Court level, when a matter is considered on merits
by a Division Bench, not only factual but even legal
aspect of the matters is required to be considered at some       D
length. [Paras 11 and 21] [754-C; 756-F]
     2.1. The purpose behind Section 271(1)(c) of the
Income Tax Act, 1961 is to penalise ttie assessee for -
(a)concealing particulars of income and I or (b) furnishing
                                                                 E
inadequate particulars of such income. Whether income
returned was a profit or loss, was really of no
consequence. Therefore, even if no tax was payable, the
penalty was still leviable. It is in that context, to be noted
that even prior to the amendment it could not be read to
                                                                 F
mean that if no tax was payable by the assessee, due to
filing of return, disclosing loss, the assessee was not
liable to pay penalty even if the assessee had concealed
and/or furnished inadequate particulars. [Para 24] [757-
B-C]
                                                                 G
    2.2. Some of the High Courts had taken a contrary
view, thus, Parliament in its wisdom thought it fit to clarify
the position by changing the expression "any" by "if
any". Thus, this was not a substantive amendment which
created imposition of penalty for the first time. The            H
    750      SUPREME COURT REPORTS                  [201 OJ 6 S.C.R.


A amendment by the Finance Act of the relevant year as
  specifically noted in the notes on clauses shows that
  proposed amendment was clarificatory in nature and
  would apply to all assessments even prior to the
  assessment year 2003-2004. [Para 25) (757-D-E]
B      2.3. Even if Assessee has disclosed NIL income and
  on verification of the record, it is found that certain
  income has been concealed or has wrongly been shown,
  in that case, penalty can still be levied. (Para 30) [759-D]

c         CIT vs. Gold Coin Health (P) Ltd. (2008) 304 ITR 308
    (SC), relied on.
          CIT vs. Elphinstone Spinning and Weaving Mills Co. Ltd.
    XL ITR 142, distinguished.

D        Vi:tual Soft Systems Ltd. vs. CIT (2007) 289 ITR 83 SC;
    CIT Vs. Harprasad and Co. P. Ltd (1975) 99 ITR 118;
    Reliance Jute and Industries Ltd. vs. CIT (1979) 120 ITR 921,
    referred to.
                          Case Law Reference:
E
     304 ITR 308 (SC)                Relied on.            Para 19
     CIT (2007) 289 ITR 83 SC        Referred to.          Para 20
     (1975) 99 ITR 118               Referred to.          Para 27
F    CIT (1979) 120 ITR 921          Referred to.          Para 27
     XL ITR 142                      Distinguished.        Para 31
          CIVIL APPELLATE JURISDICTION : Civil Appeal No(s).
    4278 of 2010.
G
        From the Judgment & Order dated 08.08.2006 of the High
    Court Gujarat at Ahmedabad in Tax Appeal No. 1905 of 2005.

                                   WITH
H C.A. No. 4279 of 2010
JT. COMMISSIONER OF INCOME TAX, SURAT v. SAHELI 751
           LEASING & INDUSTRIES LTD.

    Mohan Parasaran, ASG, V. Shekhar, H.R. Rao, D.L.                      A
Chidanand (for B.V. Balaram Das) for the Appellant.

    D.N. Sawhney, Bhargava V. Desai, Rahul Gupta, Nikhil
Sharma for the Respondent

     The Judgment of the Cort was delivered by                            .B
                                        \~
     DEEPAK VERMA, J. 1. Leave granted.
     2. The facts of both the appeals being identical, the facts
of civil appeal arising out of S.L.P.(C) No.5241 of 2007 are              C
being referred to in this judgment.

      3. On a first flush, after bare perusal of the impugned order
passed in Revenue Tax Appeal No. 1904 of 2005, decided on
a.a.2006 by Division Bench of the High Court of Gujarat at
Ahmadabad, we thought of remanding the matter for a fresh                 D
decision on merits, in accordance with law but, on a deeper
and studied scrutiny, we thought it apt instead of directing to
remit, it would be just and proper to consider the matter on
merits ourselves and to set at rest the legal controversy involved
in the appeal. It is further so that Division Bench in the impugned       E
order has decided the question of law as projected before it in
the appeal preferred under Section 260 (A) of the Income Tax
Act, 1961, (hereinafter referred to as 'the Act') in a most casual
manner. The order is not only cryptic but does not even
remotely deal with the arguments which were sought to be                  F
projected by the Revenue before it.

     4. This Court, time and again, reminded the courts
performing judicial functions, the manner in which judgments/
orders are to be written but, it is, indeed, unfortunate that those       G
guidelines issued from time to time are not being adhered to.

     5. No doubt, it is true that brevity is an art but brevity without
clarity likely to enter into the realm of absurdity, which is
impermissible. This is what has been reflected in the impugned
order which WE'. would reproduce hereinafter.                             H
      752      SUPREME COURT REPORTS                   [2010] 6 S.C.R.


 A        6. We, therefore, before proceeding to decide the matter
      on merits, once again would like to reiterate few guidelines for
      the Courts, while writing orders and judgments to follow the
      same.

          7. These guidelines are only illustrative in nature, not
 8
      exhau5tive and can further be elaborated looking to the need
      and requirement of a given case:-

            (a) It should always be kept in mind that nothing should be
            written in the judgment/order, which may not be germane
 c          to the facts of the case; It should have a co-relation with
            the applicable law and facts. The ratio decidendi should
            be clearly spelt out from the judgment I order.

            (b) After preparing the draft, it is necessary to go through
 D          the same to find out, if anything, essential to be mentioned,
            has escaped discussion.

            (c) The ultimate finished judgment/order should have
            sustained chronology, regard being had to the concept that
            it has readable, continued interest and one does not feel
 E          like parting or leaving it in the midway. To elaborate, it
            should have flow and perfect sequence of events, which
            would continue to generate interest in the reader.

            (d) Appropriate care should be taken not to load it with all
. F         legal knowledge on the subject as citation of too many
            judgments creates more confusion rather than clarity. The
            foremost requirement is that leading judgments should be
            mentioned and the evolution that has taken place ever
            since the same were pronounced and thereafter, latest
            judgment, in which all previous judgments have been
 G
            considered, should be mentioned. While writing judgment,
            psychology of the reader has also to be borne in mind, for
            the perception on that score is imperative.


 H
JT. COMMISSIONER OF INCOME TAX, SURAT v. SAHELI 753
   LEASING & INDUSTRIES LTD. [DEEPAK VERMA, J.]

    (e) Language should not be rhetoric and should not reflect      A
    a contrived effort on the part of the author. .

    (f) After arguments are concluded, an endeavour should
    be made to pronounce the judgment at the earliest and in
    any case not beyond a period of three months. Keeping it        B
    pending for long time, sends a wrong signal to the litigants
    and the society.

    (g) It should be avoided to give instances.which are likely
    to cause public agitation or to a particular society. Nothing
    should be reflected in the same which may hurt the feelings     C
    or emotions of any individual or society.

    8. Aforesaid are some of the guidelines which are required
to be kept in mind while writing judgments. In fact, we are only
reiterating what has already been said in several judgments of      D
this Court.
                                                       .
    9. Aforesaid background has been given after going
through the impugned judgment of Division Bench of the High
Court. Following substantial question of law, as contemplated
under Section 260 A of the Act, was formulated to be answered       E
by it:

           "Whether, on the facts and in the circumstances of
    the case, and in law, the Income Tax Appellate Tribunal is
    right in coming to the conclusion that where assessed           F
    income is loss, penalty cannot be levied under section 271
    (1) (c) of the Income Tax Act in spite of the fact that
    Explanation 4 (a) was added in the Income Tax Act with
    effect from 1.4.1976 and subsequently, further clause (a)
    was replaced by another clause (a) which is in clarificatory    G
    nature, with effect from 1.4.2003?"

      10. However, the Division Bench in its wisdom thought it
fit to dispose of the appeal as under:-
    "Admitted facts are that the appellant has filed .return        H
    754       SUPREME COURT REPORTS                [2010) 6 S.C.R.


A         showing loss and the income is also assessed as "NIL
          income". When the return was shown as loss as well as
          assessment of income is also NIL, no' penalty under
          Section 271 (1) (c) of the Income Tax Act is attracted. No
          case is made out for admission of the appeal. The appeal
B         stands dismissed at admission stage.
                                                        Sd/- Judge
                                                        Sd/- Judge"

          11. Considering the important question of law and its wide
c repercussions, it was least expected from the Division Bench
    of the High Court to have dealt with the issue more seriously,
    keeping in mind the question of law that was being answered
    byit.

      12. Feeling aggrieved, this appeal has been preferred by
D Revenue before us.

           Factual matrix is as under:-

       13. On return being filed by the Respondent/Assessee, an
E order under Section 143 (3) of the Act was passed on
  27.2.1998, showing total income of Rs. NIL for assessment
  year 1995-1996.

       14. During the course of assessment proceedings, it was
  noticed that Assessee had claimed depreciation, which was
F viewed to be incorrect. Thus, an amount of Rs. 24,22,531/- was
  disallowed out of depreciation. Penalty proceedings under
  Section 271 (1) (c) of the Act were initiated. In response to the
  show cause notice issued by the Revenue, Assessee filed its
  reply denying the allegations and contending that no penalty can
G be imposed on it, when returned income was NIL.

       15. Penalty was sought to be imposed in respect of an item
  having an effect in reducing the loss. No appeal was filed
  against the item, added to the income on account of which the
H loss was reduced. Admittedly, Assessee, a leasing company
JT. COMMISSIONER OF INCOME TAX, SURAT v. SAHEL! 7,55
   LEASING & INDUSTRIES LTD. [DEEPAK VERMA, J.]

had claimed depreciation on plant and machinery @ 100% on ·A
various items. The statement of depreciation filed along with
the computation of income showed the claim at Rs.1,05,08,824/
-. On enquiries being made it was revealed that 100%
depreciation was claimed along with Lease Agreements
entered into with different parties. Even though, terms and B
conditions of the Lease Agreements entered into with different
parties were the same, except the names of the parties had
been changed. Even after dis-allowance of the said
depreciation, the taxable income of th,e Assessee was NIL and
hence, there was no tax liability. According to Assessee, in        c
such a case no penalty under Section 271 (1) (c) could have
been levied.

     16. Deputy Commissioner of Income tax, Special Rang~-
2, Surat, on the basis of the discussion in the order held that
Assessee was liable to pay penalty, with reference to such          D
additions to income to be treated as its total income, with
reference to explanation 4 (a) to Section 271 (1) (c) of the Act.
Accordingly, the penalty was levied on concealed income of Rs.
24,22,531/- at minimum rate of 100% of tax sought to be
evaded. Thus, a penalty of Rs. 11, 14,364/- was imposed on          E
the Assessee.

    17. Feeling aggrieved thereof, Assessee preferred an
appeal before the Commissioner of Income Tax (Appeals-II).
Considering various judgments of the Tribunal and the High          F
Courts, the appeal of the Assessee came to be dismissed and
penalty levied on it stood confirmed.

     18. Assessee preferred further appeal before the Income-
Tax Appellate Tribunal, Ahmedabad. Tribunal, on the strength
of an earlier order passed by Special Bench of Ahmedabad            G
Tribunal in the case of Apsara Processors (P) Ltd. and Ors. in
ITA No. 284/Ahd./2004 dated 17.12.2004 came to the
conclusion that no penalty can be levied, if the returned income
and the assessed income is loss. Accordingly, the orders
passed by the Assessing Officer as well as Commissioner             H
    756     SUPREME COURT REPORTS                 [2010] 6 S.C.R.


A (Appeals) were set aside and quashed and the penalty
  imposed on the Assessee was deleted. It was this order of the
  Tribunal which was carried further by filing Appeal under Section
  260A of the Act in the High Court, which met the fate of
  dismissal by the Division Bench.
B
        19. Shri V. Shekhar, learned senior counsel appearing for
  the appellant at the outset contended that the point projected
  in this appeal stands answered in favour of the Revenue by a
  judgment of Bench of three learned Judges of this Court
C reported in (2008) 304 ITR 308 (SC) titled CIT Vs. Gold Coin
  Health (P} Ltd.

         20. In Gold Coin (supra) an earlier judgment of this Court,
    reported in (2007) 289 ITR 83 SC titled Virtual Soft Systems
    Ltd. Vs. CIT, pronounced by two learned Judges has been over-
D /ruled.

       21. It is pertinent to point out here that in Gold Coin
  (supra), what was being challenged by the Revenue, was the
  order passed by same Bench of the High Court of Gujarat at
E Ahmedabad, which finds place at page 309, wherein before
  proceeding to decide the matter, the three learned judges of
  this Court thought it fit to reproduce the same. The question of
  law as projected in Gold Coin (supra) before the High Court
  and the question of law as projected in this appeal is identical
  but what is being deciphered by us is the manner in which the
F impugned judgment has been written and pronounced. After all,
  at the High Court level, when a matter is considered on merits
  by a Division Bench, not only factual but even legal aspect of
  the matters is required to be considered at some length.

G      22. The matter of Gold Coin (supra) was placed before
  three learned judges of this Court, as correctness and propriety
  of the order passed by two learned judges of this Court in
  Virtual Soft Systems (supra) was doubted. Thus, to clear the
  doubts, on the correct exposition of law, a three Judge Bench
H was constituted which decided the matter in Gold Coin (supra).
JT. COMMISSIONER OF INCOME TAX, SURAT v. SAHELI 757
   LEASING & INDUSTRIES LTD. [DEEPAK VERMA, J.]

     23. It is to be seen that purpose behind Section 271 (1)(c)        A
of the Act is to penalise the Assessee for -

     (a) concealing particulars of income and I or

     (b) furnishing inadequate particulars of such income.
                                                                        8
     24. Whether income returned was a profit or loss, was really
of no consequence. Therefore, even if no tax was payable, the
penalty was still leviable. It is in that context, to be noted that
even prior to the amendment it could not be read to mean that
if no tax was payable by the Assessee, due to filing of return,         C
disclosing loss, the Assessee was not liable to pay penalty
even if the Assessee had concealed and/or furnished
inadequate particulars.

     25. Some of the High Courts had taken a contrary view,             D
thus, Parliament in its wisdom thought it fit to clarify the position
by changing the expression "any" by "if any". Thus, this was not
a substantive amendment which created imposition of penalty
for the first time. The amendment by the Finance Act of the
relevant year as specifically noted in the notes on clauses shows
that proposed amendment was clarificatory in nature and would           E
apply to all assessments even prior to the assessment year
2003-2004.

      26. Thus, in Gold Coin (supra), after combined reading of
the recommendations of Wanchoo Committee, and Circular No.              F
204 dated 24.7.1976, it was clarified that points had been
made clear with regard to Explanation 4 (a) to Section 271 (1)
(c) (iii) to intend to levy penalty not only in a case where after
addition of concealed income, a loss returned, after
assessment becomes positive income, but also in a case                  G
where addition of concealed income reduces the returned loss
and finally the assessed income is also a loss or minus figure.
Therefore, even during the period between 1.4.1976 and
1.4.2003, the position was that penalty was still leviable in a
                                                                        H
    758       SUPREME COURT REPORTS                   [2010] 6 S.C.R.


A   case where addition of concealed income reduces the returned
    loss.

       27. In the aforesaid case, the expression "income" in the
  statute appearing in Section 2 (24) of the Act has been clarified
  to mean that it is an inclusive definition and includes' losses,
8
  that is, negative profit. This has been held so on the strength
  of earlier judgments of this Court in CIT Vs. Harprasad and Co.
  P. Ltd (1975) 99 ITR 118 and followed in Reliance Jute and
  Industries Ltd. Vs. CIT (1979) 120 ITR 921. After elaborate and
  detailed discussion, this Court held with reference to the
C charging provisions of statute that the expression "income"
  should be understood to include losses. The expression "profits
  and gains" refers to positive income whereas "losses" represent
  negative profit or in other words minus income.

D       28. Considering this aspect of the matter in greater details,
    Gold Coin (supra) over-ruled the view expressed by two learned
    judges in Virtual Soft Systems (supra).

       29. Relevant paras 11 and 12 of Gold Coin (supra) dealing
E with income and losses are reproduced herein below:-

          "11. When the word "income" is read to include losses as
          held in Harprasad's case it becomes crystal clear that
          even in a case where on account of addition of concealed
          income the returned loss stands reduced and even if th final
F         assessed income is a loss, still penalty was leviable
          thereon even during the period April 1, 1976 to April1,
          2003. Even in the Circular dated July 24, 1976, referred
          to above, the position was clarified by the Central Board
          of direct Taxes (in short "the CBDT"). It is stated that in a
G         case where on setting off the concealed income against
          any loss incurred by the Assessee under any other head
          of income or brought forward from earlier years, the total
          income is reduced to a figure lower than the concealed
          income or even to a minus figure the penalty would be
H         imposable because in such a case 'the tax sought to be
JT. COMMISSIONER OF INCOME TAX, SURAT v. SAHELI 759
   LEASING & INDUSTRIES LTD. [DEEPAK VERMA, J.]

     evaded" will be tax chargeable on concealed income as               A
     if it is "total income".

     12. Law is well-settled that the applicable provision would
     be the law as it existed on the date of the filing of the return.
     It is of relevance to note that when any loss is returned in        B
     any return it need not necessarily be the loss of the
     concerned previous year. It may also incluc!e carried
     forward loss which is required to be set up against future
     income under Section 72 of the Act. Therefore, the
     applicable law on the date of filing of the return cannot be        C
     confined only to the losses of the previous accounting
     years."

      30. The necessary consequence thereof would be that
even if Assessee has disclosed NIL income and on verification
of the record, it is found that certain income has been                  D
concealed or has wrongly been shown, in that case, penalty can
still be levied. The aforesaid position is no more res integra
and according to us, it stands answered in favour of the
Revenue and against the Assessee.
                                                                         E
     31. The learned senior counsel appearing for the
respondent Assessee, Mr. D.N Sawhney, contended that the
observations made in Gold Coin (supra) can at best be treated
as obiter but not as binding precedent. According to him, the
earlier judgment of the Coordinate Bench in CIT Vs.
Elphinstone Spinning and Weaving Mills Co. Ltd. XL /TR                   F
142, would still hold the field and applies fully to the facts of the
said case.

    32. Much emphasis has been laid on the following
observations in Elphinstone (supra) reproduced hereinbelow:              G

             "There is no doubt that if the words of a taxing statute
     fail, then so much the tax. The courts cannot, except rarely
     and in clear cases, help the draftsmen by a favourable
     construction. Here, the difficulty Is not one of inaccurate         H
    760      SUPREME COURT REPORTS                   [2010] 6 S.C.R.


A         language only. It is really this that a very large number of
          taxpayers are within the words but some of them are not.
          Whether the enactment might fail in the former case on
          some other ground (as has happened in another case
          decided today) is not a matter we are dealing with at the
B         moment. It is sufficient to say there that the words do not
          take in the modifications which the learned counsel for the
          appellant suggests. The word "additional" in the expression
          "additional income-tax" must refer to a state of affairs in
          which there has been a tax before. The words "charge on
c         the total income" are not appropriate to describe a case
          in which there is no income or there is loss. The same is
          the case with the expression "profits liable to tax" The last
          expression "dividends payable out of such profits" can only
          apply when there are profits and not when there are no
          profits.
D
          It is clear that the Legislature had in mind the case of
          persons paying dividends beyond a reasonable portion of
          their income. A rebate was intended to be given to those
          who kept within the limit and an enhanced rate was to be
E         imposed on those who exceeded it. The law was
          calculated to reach those persons who did the latter even
          if they resorted to the device of keeping profits back in one
          year to earn rebate to pay out the same profits in the next.
          For this purpose, the profits of the earlier year& were
F         deemed to be profits of the succeeding years. So far so
          good. But the Legislature failed to fit in the law in the
          scheme of the Indian Income-tax Act under which and to
          effectuate which the Finance Ac.t is passed. The
          Legislature used language appropriate to income, and
G         applied the rate to the "total income". Obviously, therefore,
          the law must fail in those cases where there is no total
          income at all, and the courts cannot be invited to supply
          the omission made by the Legislature."

          33. In a first glance, after considering arguments of both
H
JT. COMMISSIONER OF INCOME TAX, SURAT v. SAHELI 761
   LEASING & INDUSTRIES LTD. [DEEPAK VERMA, J.)

sides, we thought that matter required to be referred to a larger    A
Bench for considering the issue involved in this appeal but on
deeper scanning of the judgments in Gold Coin (supra) and
Elphinstone (supra), we came to the conclusion that the ratio
decidendi of Gold Coin (supra) fully covers the issue and the
case of Elphinstone (supra) has no application to the facts of       B
the said case.

    34. Both cases are distinguishable on the following broad
grounds, namely:

    (i) Gold Coin Health (supra) arose under the Income Tax          C
    Act, 1961, whereas Elphinstone(supra) arose under the
    repealed Income Tax Act of 1922. (Though this is only a
    distinguishing feature noticed in 2 decisions which is not
    o; much significance).
                                                                     D
    (ii) The question that fell for consideration in Gold Coin
    (supra) was what would be the true interpretation of
    Section 271 (1) (c) in the context of amendments made
    therein whereas, the question in Elphinstone (supra) was
    in relation to chargeability of "additional tax" on "dividend
                                                                     E
    income" earned by Assessee under paragraph - B of
    First Schedule to the Income Tax Act, 1922.

    (iii) Elphinstone (supra)interpreted five words occurring
    in para-B of First ScheCl(.!le namely; "additional",
    "additional Income Tax", "charge on the total income",           F
    "profits liable to tax" and lastly, "dividends payable out of
    such profits", whereas, in Gold Coin's case, the question
    arose whether word "income" includes loss for the purpose
    of imposition of penalty u/s 271 (1) (c) and if Assessee
    incurs loss in any particular year then whether penalty u/s      G
    271 (1) (c) can stili\oe imposed on him. This has been
    categorically answere~in Gold Coin (supra) in favour of
    Revenue and against the    ""' Ass~~see.
                                   .


     (iv) The object of imposing penalty is different than that of   H
        762       SUPREME COURT REPORTS                   [2010] 6 S.C.R.


    A         determining Assessee's liability to pay tax or additional tax
              under any charging section. The interpretation applied to
              penalty provision thus, cannot be applied while interpreting
              any charging section for payment of income tax or
              additional tax. In other words, both provisions i.e. penalty
    B         and charging have different objects and consequences.
              They operate in different fields qua Assessee.

              (v) The liability to pay additional tax under First Schedule
              on the income earned out of dividend implies that
              Assessee is first required to pay "tax" and then additional
    c         tax on the specified income. It was basically this issue
              which was examined in Elphinstone (supra) wherein Their
              Lordships considered the object for enacting first para of
              schedule. This object has nothing to do with penalty
              provisions.
    D
              (vi) A particular word occurring in one Section of the Act,
              having a particular object cannot carry the same meaning
              when used in different Section of the same Act, which is
              enacted for different object. In other words, one word
    E         occurring in different Sections of the Act can have different
              meaning, if the object of the two Sections are different and
              when both operate in different fields.

              (vii) Question of law involved in this appeal is directly
              covered by the decision of Gold Coin (supra) and is to be
    F         answered accordingly.

              (viii) Elphinstone (supra), therefore, has no bearing over
              the view taken in Gold Coin (supra) case and even if it had
              been taken note of, the decision taken therein would have
    G         been the same due to aforementioned distinguishing
/             feature.

              (ix) The issue involved in Gold Coin (supra) being entirely
              different than the one involved in Elphinstone (supra), the
              view taken by this Court in both the decisions are correct
    H
JT. COMMISSIONER OF INCOME TAX, SURAT v. SAHELI 763
   LEASING & INDUSTRIES LTD. [DEEPAK VERMA, J.]

    operating in the respective fields, requiring no,                A
    reconsideration of the matter.

    (x) In order to enable the Court to refer any case to a larger
    Bench for reconsideration, it is necessary to point out that
    particular provision of law having a bearing over the issue      B
    involved was not taken note of or there is an error apparent
    on its face or that a particular earlier decision was not
    noticed, which has a direct bearing or has taken a contrary
    view. Such does not appear to be a case herein. Thus, it
    does not need to be referred to a larger Bench as in our
    considered opinion; it is squarely covered by the judgment       C
    of this Court in Gold Coin (supra).

    35. In the light of the aforesaid discussion, we have no
doubt in our mind that the ratio of Elphinstone (supra) has no
application to the facts of the case and the question of law         D
projected stands squarely answered in favour of the Revenue
and against the Assessee in Gold Coin (supra) as a result
thereof, appeal by Revenue stands hereby allowed. Impugned
order passed by Income Tax Appellate Tribunal and confirmed
by Division Bench are hereby set aside and quashed. The              E
Revenue, therefore, would be at liberty to proceed further
against the Assessee on merits in accordance with law.

     36. Appeals stand allowed as mentioned hereinabove but
with no order as to costs.

K.K.T.                                        Appeals allowed.