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TMI Blog2000 (8) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... er. 2. For the assessment year 1991-92 the assessee filed the return admitting a loss of Rs. 3,14,053. The Assessing Officer processed the return under section 143(1)(a) and issued the intimation on 23-3-1992. Later a notice under section 154 was issued on the assessee proposing to rectify the intimation pointing out that the loss as computed was not correct and that there had been claim of excess loss. The Assessing Officer passed the order of rectification on 3-8-1993 reducing the loss to Rs. 1,49,543 as against the loss of Rs. 3,14,053 accepted in the intimation under section 143(1)(a). Considering the reduction of the loss, the Assessing Officer levied additional tax of Rs. 17,027 under section 143(1A). 3. The assessee took up the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntimation was issued under section 143(1)(a) on 23-3-1992 accepting the loss of Rs. 3,14,053 as admitted by the assessee. Sri Seetharaman submitted that the fact that the Assessing Officer also by mistake accepted the loss of Rs. 3,14,053 as computed by the assessee, would go to show that on both sides there was a bona fide mistake in the sense that instead of adjusting the depreciation allowance against the profit of the year both were added, with the result that there was a wrong claim of loss by way of depreciation allowance to the extent of Rs. 3,14,053. Relying on the decision of the Supreme Court in CIT v. Hindustan Electro Graphites Ltd. [2000] (243 ITR 48), Sri Seetharaman submitted that levy of additional tax under section 143(1A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rima facie adjustment, in the intimation issued under section 143(1)(a) there could be the levy of additional tax and so while rectifying the mistake subsequently the Assessing Officer could levy additional tax when the loss was reduced to Rs. 1,49,543. He also referred to various decisions in support of the plea that in a case of reduction of loss there could be levy of additional tax under section 143(1A). The ld. D.R. thus urged us to uphold the order of the CIT(A) confirming the additional tax of Rs. 17,027 levied in this case. 6. The assessee filed the return declaring a loss of Rs. 3,14,053. In the statement accompanying the return the computation of the loss was shown as under: ------------------------------------------------------ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -------------------- Loss to be carried forward: Rs.(-) 3,14,543 -------------------- ----------------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reduced penalty was incurred and the same be calculated in the manner provided in the said section. In that case the Court observed that the Notes on Clauses of the Finance Bill 1993 which amended section 143(1A) make it clear that the intention was to impose a penalty for filing an improper return. Therefore, it was not correct to say that under section 143(1A) the authorities were levying Income-tax on the loss suffered by the assessee. The High Court found that the default was committed by the assessee in showing a higher loss for the assessment year in question knowing fully well that certain amounts were not eligible for credit under section 43B of the Act. It was for that particular default, the assessee incurred penalty or punishment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his. That cannot ever be the legislative intent. It shocks the very conscience if in the circumstances section 143(1A) could be invoked to levy the additional tax. The following observations by the Constitution Bench of the Supreme Court in Pannalal Binjraj v. Union of India [1957] 31 ITR 565 (SC) are apt: "A humane and considerate administration of the relevant provisions of the Income-tax Act would go a long way in allaying the apprehensions of the assessees and if that is done in the true spirit, no assessee will be in a position to charge the Revenue with administering the provisions of the Act with 'an evil eye and unequal hand'." 9. In the light of the decision of the jurisdictional High Court and the Apex Court referred to above, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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