Additional tax on loss returns upheld where amended section 143(1A) applied from the relevant assessment year.

Additional income-tax under section 143(1A) was examined in relation to a loss return for assessment year 1989-90, with the court noting that the provision, as amended by the Finance Act, 1993, applied from 1 April 1989 and therefore governed that assessment year. The assessment had to be tested against the law in force for the relevant year unless a contrary saving or exception applied. Because the later amendment was operative from the relevant date, the levy on the loss return was held valid, and the challenge to that additional tax failed.

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Issues: Whether additional income-tax under section 143(1A) of the Income-tax Act, 1961 could be levied on a loss return for assessment year 1989-90.

Analysis: Section 143(1A) was introduced with effect from 1 April 1989 and, as amended by the Finance Act, 1993, it applied from that date. The law in force in the relevant assessment year governs the assessment unless otherwise provided. Since the amendment operated from 1 April 1989, it governed assessment year 1989-90. The prior decision relied upon did not consider the later amendment.

Conclusion: The levy of additional tax on the loss return was valid and the challenge failed.

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