Retrospective penalty base amendment under income tax law excludes provisional tax payment from deduction in penalty computation.

The amendment in section 271(1)(a) substituting "tax payable" with "tax assessed" was treated as retrospective and operating as if always in force. On that construction, amounts earlier paid under section 141 could not be deducted from the tax determined under section 143(3) while computing the penalty base. The result was that the deduction claimed against the penalty computation was rejected, and the question was answered in favour of the Revenue and against the assessee.

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Issues: Whether, for computing penalty under section 271(1)(a) of the Income-tax Act, 1961, the amount paid under section 141 of the Income-tax Act, 1961 was deductible from the tax determined under section 143(3) of the Income-tax Act, 1961.

Analysis: The statutory amendment replacing the words "tax payable" with "tax assessed" in section 271(1)(a) was treated as retrospective and applicable as if always in force. On that basis, the amount earlier paid under provisional assessment was not allowable as a deduction while determining the tax base for penalty.

Conclusion: The amount paid under section 141 could not be deducted in computing the penalty base under section 271(1)(a); the question was answered in favour of the Revenue and against the assessee.

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