TaxTMI 
TaxTMI 
2005 (2) TMI 68
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....n the facts and circumstances of the case, the confirmation of the amount of additional tax imposed on the assessee-appellant is legally sustainable especially when the retrospective operation of the provision has been held to be invalid by the Guwahati High Court and the Income-tax Act being the Central Act is binding on the income-tax authority?" For the assessment year 1989-90, the appellant filed a return declaring losses. Subsequently, it filed a revised return declaring loss of Rs. 1,07,35,100. The Assessing Officer issued notice to the appellant proposing to levy additional tax under section 143(A) of the Act on account of reduction in the net loss declared by it. The latter challenged the same by filing an application under section 154 of the Act which was dismissed by the Deputy Commissioner of Income-tax, Special Range, Rohtak, vide his order dated March 18, 1992. On appeal, the Commissioner of Income-tax (Appeals), Rohtak (for short, "the CIT(A)") granted relief to the appellant by relying on the judgment of the Delhi High Court in Modi Cement Ltd. v. Union of India [1992] 193 ITR 91. He held that section 143 (1A) is applicable only where the declared income is increase....
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....it for the assessment year 1989-90 relates to the financial year 1988-89 and the amendment made by the Finance Act, 1993, was given retrospective effect from April 1, 1989. Learned counsel submitted that the express retrospectivity given to the amendment made in section 143(1A) cannot be further extended by judicial interpretation. Shri Rajesh Bindal, learned counsel for the Revenue relied on the judgment of the Supreme Court in Asst. CIT v. J.K. Synthetics Ltd. [2001] 251 ITR 200 and argued that in view of the latest judgment of the three-judge Bench, the appellant cannot seek invalidation of the order passed by the Tribunal. He further argued that the Tribunal did not commit any illegality by applying section 143(1A) to the appellant's case in relation to the assessment year 1989-90 because the amendment carried out in that section was made effective with effect from April 1, 1989, Shri Bindal pointed out that the appellant could file return for the assessment year 1989-90 on any day after April 1,1989 and therefore, the amended section 143(1A) was rightly applied to its case. We have given serious thought to the arguments of learned counsel. Section 143(1)(a) and section 143(1....
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.... be sent under sub-clause (i) of clause (a) of sub-section (1); (ii) Where any refund is due under sub-section (1), reduce the amount of such refund by an amount equivalent to the additional income-tax calculated under sub-clause (i)." Sub-section (1A) of section 143 was amended by the Finance Act, 1993, with effect from April 1, 1989. The amended section reads as under: (1A)(a) Where, as a result of the adjustments made under the first proviso to clause (a) of sub-section (1),- (i) the income declared by any person in the return is increased; (ii) the loss declared by such person in the return is reduced or is converted into income, the Assessing Officer shall,- (A) in a case where the increase in income under sub-clause (i) of this clause has increased the total income of such person, further increase the amount of tax payable under sub-section (1) by an additional income-tax calculated at the rate of twenty per cent, on the difference between the tax on the total income so increased and the tax that would have been chargeable had such total income been reduced by the amount of adjustments and specify the additional income-tax in the intimation to be sent under sub-clause ....
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....ub-section (1)(a) falls within the ambit of sub-section (1A). We should add that we have reservations about the correctness of the judgment in Hindustan Electro Graphite Ltd.'s case [2000] 243 ITR 48 (SC) principally because the assessee in that case had not challenged the provisions of sub-section (1A). The appeal is allowed. The order under appeal is set aside." In view of the law laid down by the Supreme Court in the case of Asst. CIT v. J.K. Synthetics Ltd. [2001] 251 ITR 200 it must be held that additional tax can be levied even if the assessee files a return showing net loss in the particular assessment year. The question which remains to be considered is whether the amended section 143(1A) of the Act could be applied to the appellant's case in relation to the assessment year 1989-90. According to Shri Akshay Bhan, learned counsel for the appellant, the amended section 143(1A) which was made effective from April 1, 1989, could not be applied to his client's case because the return filed for the year 1989-90 relates to the financial year 1988-89, i.e., April 1, 1988, to March 31, 1989, and till that date, the amended section 143(1A) was not in existence. The counter argumen....