Dismissing the petition the Court held that unless specific provision is made in in Double Taxation Avoidance Agreement inasmuch as penalty is concerned , provision of S.271(1) (c ) shall continue to apply . Accordingly S.271(1)(c) cannot be regarded as ultra vires of Constitution in so far as imposing of penalty on amounts determined pursuant to Convention for Avoidance of Double Taxation between Union of India and other Sovereign Countries which is enforced in Indian territory by S.90 and Rules made there under . (AY. 2006-07)
Toyota Kirloskar Motor (P) Ltd v UOI ( 2019) 266 Taxman 328/ 311 CTR 770 / 184 DTR 65/(2020)422 ITR 138 ( Karn) (HC)/Toyota Kirloskar Auto Parts P. Ltd. v. UOI ( 2019) 184 DTR 65 /311 CTR 770 / (2020)422 ITR 138 (Karn) (HC )
S. 271(1)(c) : Penalty – Concealment – Constitutional validity -Provision cannot be regarded as ultra vires of Constitution – Convention for Avoidance of Double Taxation between Union of India and other Sovereign Countries – DTAA -India – Japan .[S.90 , Art. 23, Art .226 ]