Assessed tax for penalty computation excludes self-assessment tax, and a retrospective amendment applies to the calculation.

For penalty computation under section 271(1)(a)(i), "assessed tax" is reduced only by tax deducted at source and advance tax paid, not by self-assessment tax under section 140A. The retrospective Explanation inserted into section 271(1)(a) governed the computation even though it was introduced after the Tribunal's decision, and the contrary view was rejected. On that construction, self-assessment tax does not lower assessed tax for penalty purposes, and the assessee's contention failed.

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Issues: Whether, for computing penalty under section 271(1)(a)(i) of the Income-tax Act, 1961, the expression "assessed tax" excludes self-assessment tax paid under section 140A.

Analysis: The Explanation to section 271(1)(a) defines "assessed tax" as tax reduced only by tax deducted at source and advance tax paid. The amendment inserting the Explanation was made with retrospective effect, and therefore governed the computation even though it was introduced after the Tribunal's decision. On that construction, no deduction was allowable for tax paid on self-assessment under section 140A. The contrary view that the retrospective amendment should be ignored was rejected.

Conclusion: The assessed tax for penalty purposes does not include any reduction for self-assessment tax under section 140A, and the question was answered in the negative, against the assessee.

Ratio Decidendi: A retrospective statutory amendment defining the basis of penalty computation must be applied to the reference before the court, and "assessed tax" for section 271(1)(a)(i) is reduced only by tax deducted at source and advance tax, not by self-assessment tax.

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