In above appeals, same/similar question of law is involved which reads as under: "Whether Tribunal was justified in holding that no case for penalty under s. 271(1)(c) is made out, without appreciating in its right perspective impact of its Expln. 4 appended to said section". For purpose of this decision, facts are being taken from ITA No. 17/2006. In respect of asst. yr. 1994-95, respondent filed return of income on 30th Nov., 1995 declaring total income as Nil. On completion of assessment under s. 143(3) of IT Act, 1961 at loss after addition made by AO, penalty proceedings under s. 271(1)(c) were initiated. Accordingly, show cause notice was issued to respondent assessee as to why penalty be not levied. respondent assessee filed reply but AO, after considering all facts and circumstances of case, levied penalty under s. 271(1)(c) amounting to Rs. 9,00,000. On appeal, CIT, however, set aside penalty and Tribunal on further appeal, has upheld order passed by CIT(A) and dismissed Departmental appeal. In context of above facts, Department contends that after amendment of Expln. 4 to s. 271(1)(c) of Act, penalty was leviable even in cases where after making addition of income concealed, return was nil or loss. Learned counsel for appellant-revenue submits that after amendment, Expln. 4 to s. 271(1)(c) of Act is only clarificatory and, therefore, in view of provision made by said Explanation, levy of penalty should have been sustained by CIT and Tribunal. Learned counsel, however, does not dispute that in case of Virtual Soft Systems Ltd. vs. CIT (2007) 207 CTR (SC) 733: (2007) 289 ITR 83 (SC), Supreme Court has interpreted impact of said Explanation and observed that Explanation amended in year 2002 by Finance Act, 2002 w.e.f. 1st April, 2003 is not retrospective and penalty levied for earlier years in case of "loss return" or Nil income, cannot be sustained on ground that said Explanation is retrospective. Learned counsel, however, still urges that Expln. 4, after its amendment in year 2002 is only clarificatory and, therefore, would apply to all cases considered and disposed of after date of amendment. Sec. 271(1)(c) refers to satisfaction of AO or CIT(A) or CIT in course of proceedings that assessee has concealed particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty sums as mentioned in cls. (ii) and (iii). Explanation 4 after its amendment by Finance Act, 2002 w.e.f. 1st April, 2003, also provides for levy of penalty on tax that would have been chargeable on income in respect of which particulars have been concealed o r inaccurate particulars have been furnished had such income been total income. Explanation 4 reads as under: "Explanation 4. For purposes of cl. (iii) of this sub-section, expression amount of tax sought to be evaded, (a) in any case where amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished has effect of reducing loss declared in return or converting that loss into income, means tax that would have been chargeable on income in respect of which particulars have been concealed or inaccurate particulars have been furnished had such income been total income; (b) in any case to which Expln. 3 applies, means tax on total income assessed; (c) in any other case, means difference between tax on total income assessed and tax that would have been chargeable had such total income been reduced by amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished." From perusal of above Explanation, it is luculent that it does not provide for application of Explanation retrospectively. Since provision is not retrospective, it cannot be said that it is clarificatory. In view of fact that Supreme Court in Virtual Soft Systems Ltd. s case (supra) has already considered effect of Expln. 4 (supra), and fact that it has been made effective prospectively from 1st April, 2003, there can be no doubt that Explanation is prospective in its application and is not explanatory, as contended by learned counsel. In view of above decision of Supreme Court, in Virtual Soft Systems Ltd. s case (supra) all these appeals raising question with regard to retrospectivity of Explanation and that Explanation is clarificatory, are dismissed with no order as to costs. *** COMMISSIONER OF INCOME TAX, INDORE v. CHIRAG METAL ROLLING MILLS (P.) LTD.