Merely because an addition is made to the income declared by the assessee, penalty u/s. 271(1)(c) cannot be imposed

RELEVANT PARAGRAPH 44. In Dharmendra Textile Processors’ case (supra), Their Lordships have held that that penalty under section 271(1)(c) provides remedy for loss of revenue. A penalty under section 271 (1)(c) involves payment of an additional amount, which is a civil liability to provide for remedy for loss of revenue, while a sentence of imprisonment under section 276 C means loss of individual liberty which does not help revenue in anyway except as serving as a deterrent for the potential defaulters. Therefore, as held by the Hon’ble Supreme Court, a penalty under section 271(1...