TMI Blog1997 (5) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee, Mr. Mehta has drawn our attention to the CBDT Circular No. 669, dated 25th October, 1993, whereby revenue authorities are directed to consider all evidences, placed in support of the deductions claimed, by the assessee during the course of rectification proceedings initiated under section 154 of the Income-tax Act, though these evidences were not filed along with the return and the deductions, claimed, were disallowed as prima facie inadmissible for want of evidence. 4. We have heard submissions of both the parties and have carefully perused the Board's Circular and we find that the evidence in support of the claim of the assessee was filed during the course of rectification proceedings. As per Board's Circular, the evidence in support of the claim should have been considered and accepted by the Assessing Officer. In the light of Board's Circular, we find ourselves in agreement with the observation of the CIT (Appeals) and, accordingly, we uphold the same. 5. In ground No. 2, the revenue has assailed the order of the CIT (Appeals) on the ground that he has erred in deleting additional tax charged, holding that the additional tax cannot be levied where loss continues after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agricultural labourers, artisans and small entrepreneurs. But the claim of the assessee was rejected on the ground that the assessee has for the first time raised this issue, may be because of imposition of additional tax, which is debatable and cannot be decided in the proceedings under section 154 of the IT Act. 8. The ld. counsel for the assessee has further submitted that since the assessee is exempted from payment of income-tax as per section 80P of the Act, the additional tax cannot be levied on it. While bringing this amendment, the Legislature was intended to make law more deterrent so that assessee may not furnish incorrect particulars in the original return of income. But in the instant case, when the assessee is not at all liable to pay the income-tax, this amendment is not at all applicable to him as his liability to pay income-tax is not going to be affected at any time to come, by making the incorrect particulars in the original return of income. The ld. counsel further argued that since the issue is debatable one as per observation of the Assessing Officer how a prima facie adjustment can be made under section 143(1)(a) of the Act, whereby the loss declared by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to as additional income-tax) equal to twenty per cent of the tax that would have been chargeable on the amount of the adjustments as if it had been the total income of such person and specify the additional income-tax so calculated in the intimation to be sent under sub-clause (i) of clause (a) of sub-section (1); (C) where any refund is due under sub-section (1) reduce the amount of such refund by any amount equivalent to the additional income-tax calculated under sub-clause (A) or, sub-clause (B), as the case may be'. From bare reading of the section, it appears to us that the additional tax is leviable only in case if the declared income is increased or loss declared in the return is reduced or converted into income. If the loss is not reduced by making adjustment under section 143(1A) of the Act, no additional tax is leviable. In the instant case, it is not disputed by the revenue that the assessee is a co-operative society and is entitled for the protection given under section 80P of the Income-tax Act. It is obvious from the order of the Assessing officer that the assessee is a co-operative credit agricultural bank and are exempted from payment of income-tax unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use (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)." These provisions, however, authorised the charge of additional tax only in those cases where a positive income is returned and it is increased as a result of adjustments or a loss is returned but it is converted into a positive income as a result of adjustment. Hence, in a number of cases it was held that 'where the assessee files a return declaring loss and after the adjustments under section 143(1) are carried out, the resultant figure is still a loss, the question of application of section 143(1A) does not arise. As a result of adjustments carried out, no tax is payable if the resultant figure is a loss'. This observation was made by various High Courts in the following cases : (i) Saiko Matek Engg. (P.) Ltd. v. D.C. Pant, Dy. CIT [1993] 204 ITR 839 (Bom.); (ii) J.K. Synthetics Ltd. v. Asstt. CIT [1993] 200 ITR 584 (Delhi); (iii) Rajasthan Stale Electricity Board v. Dy. CIT [1993] 200 ITR 434 (Raj.); and (iv) Indo-Gulf Fertilizers Chemicals Corpn. Ltd. v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax. By declaring the loss in the original return, the assessee may get benefit in the payment of the income-tax in the years to come. To meet this situation the Legislature brought this amendment in section 143(1A) so that the assessee, who are the income-tax payee, should not furnish the inaccurate particulars in the original return, though he has declared the loss in it. Under these circumstances, we are of the view that this amendment was brought by the Legislature to cover up those assessees who are genuine income-tax payee but declared the loss in the return and the loss declared was reduced or converted into income as a result of the prima facie adjustments done under section 143(1)(a) of the Act. In the instant case, the assessee is exempted from payment of income-tax by virtue of section 80P of the Income-tax Act. Since the assessee is not going to take any benefit in the payment of income-tax from revenue authorities by declaring the loss in, its return in the years to come, he should not to be chargeable to additional tax, though his declared loss is reduced as a result of adjustments made under section 143(1)(a) of the Act. 11. The other argument of the assessee is t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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