TaxTMI 
TaxTMI 
2000 (3) TMI 2
X X X X Extracts X X X X
X X X X Extracts X X X X
....143(1A) and 234 ?" The respondent, the assessee, filed its return of income for the assessment year 1989-90. The return was filed on December 29, 1989. It was filed under section 139 of the Income-tax Act, 1961 (for short, the "Act"). Under section 28 of the Act, income mentioned therein is chargeable to income-tax under the head "Profits and gains of business or profession". Clause (iiib) in section 28 was inserted by the Finance Bill of 1990. The Finance Bill which ultimately became the Finance Act received assent of the President of India on May 31, 1990. Clause (iiib) was given retrospective operation with effect from April 1, 1967. Clause (iiib) is as under : "(iiib) cash assistance (by whatever name called) received or receivable b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....opal, who partly allowed the appeal on that part with which we are not concerned. The assessee then took the matter in appeal to the Income-tax Appellate Tribunal (Indore Bench), Indore (for short, the "Tribunal"). The Tribunal by its order dated August 11, 1992, allowed the appeal holding that no additional tax could be levied in respect of the amount of cash compensatory support and no interest under section 234 could be charged on the said amount. Now, it was the Revenue which was aggrieved. At the instance of the Revenue, the Tribunal referred the question to the High Court of Madhya Pradesh under section 256(1) of the Act for its opinion. The High court by its impugned judgment dated September 11, 1997 (see [1998] 229 ITR 16), answered....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Assessing Officer levying additional tax. The High Court speaking through one of us (Ruma Pal J.) noticed that section 28 of the Act was amended with retrospective effect from April 1, 1967. It said : "An assessee cannot be imputed with clairvoyance. When the return was filed, the assessee could not possibly have known that the decision on the basis of which cash compensatory support had been claimed as not amounting to the assessee's income ceased to be operative by reason of retrospective legislation." The High Court was further of the view that there was limitation on the power under section 143(1)(a) and that the Assessing Officer must determine the question of assessment thereunder by applying the law prevailing when the return ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essment if the basis is shown to exist. Additionally, the change in the law by amendment of section 28 took place several months after the return was filed by the assessee. This court is not determining the validity of the amendment of section 28, but is merely determining the scope of the power under section 143(1)(a). The assessee's return could have been taken up by the Assessing Officer under section 143 prior to the amendment. In that event, no adjustment would have been made and no intimation would have been sent. An assessee's liability cannot be made to depend upon such a fortuitous circumstance." The High Court allowed the writ petition to the extent that the impugned intimation and adjustment under section 143(1)(a) were set asi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....not liable so to include it, it would not be right to condemn the return as a "false" return inviting imposition of penalty. This court said that section 43 of the Madhya Pradesh General Sales Tax Act, 1958, providing for imposition of penalty was penal in character and unless the filing of an inaccurate return is accompanied by a guilty mind, the section cannot be invoked for imposing penalty. This court further said that if the view canvassed on behalf of the Revenue were accepted, the result would be that even if the assessee raises a bona fide contention that a particular item is not liable to be included in the taxable turnover, he would have to show it as forming part of the taxable turnover in his return and pay tax upon it on pain o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1995] 212 ITR 496, squarely covers the issue involved in the present appeal. Then we have to see the law on the date of filing of the return. To attract penal provisions there has to be some element of lack of bona fides unless the law specifically provides otherwise. The case before us does not represent even a bona fide mistake. In fact it is not a case where under some mistaken belief the assessee did not disclose the cash compensatory support received by it which he could offer to tax. It is true that income by way of cash compensatory support became taxable retrospectively with effect from April 1, 1967, but that was by amendment of section 28 by the Finance Act of 1990 which amendment could not have been known before the Finance Act ....