COMMR.OF INCOME TAX,BARODA vs RAMAN LAL C.HATHI — C.A. No. 5066/2008

Case Summary: Commissioner of Income Tax, Baroda v. Raman Lal C. Hathi On 07/04/2008, the Supreme Court heard the Income Tax Department's Special Leave Petition concerning Assessment Year 1996-97. The core issue was whether penalty under Section 271(1)(c) of the Income Tax Act could be levied when returned income is a loss, specifically regarding the retrospective applicability of the Finance Act 2002 amendment (effective from 01/04/2003). The Court found that the Virtual Soft Systems Ltd. precedent—which rejected the Department's argument that Notes on Clauses could establish retrospective application—requires reconsideration. The Court directed the matter to the Chief Justice for appropriate directions before a larger bench. The Department stated it would not demand penalty from the assessee regardless of outcome, seeking only authoritative interpretation of the statutory provision. This case analysis is maintained by casestatus.in based on publicly available court records.