TMI Blog2002 (4) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... uashed the orders/intimations issued by the Revenue imposing additional income-tax under the aforesaid sub-section. We have heard Mr. K.P. Sharma, learned counsel for the Revenue, and Dr. A.K. Saraf, learned senior counsel for the respondents. The Revenue has preferred the appeals challenging the decision of the learned single judge to the effect that an additional income-tax could not be levied/imposed with retrospective effect, i.e., from April 1, 1989. There being no challenge to the decision of the learned single judge about the constitutional validity of the provisions of sub-section (1A)(a) of section 143, this court is only required to deal with the second limb of the order related to the retrospectivity of the provisions of the aforesaid sub-section substituted by the Finance Act, 1993. In order to appreciate this question, it is necessary to place hereinafter the facts which eventually culminated in the above two writ petitions. In C.R. No. 2072 of 1993, the writ petitioner as assessee filed a return on December 27, 1989, indicating a total loss of Rs. 1,94,13,440 inclusive of the loss sustained in the current year to the tune of Rs. 79,36,126 and unabsorbed loss of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made under the first proviso to clause (a) of sub-section (1) exceeds the total income declared in the return. The provision of this new sub-section did not contemplate any tax on loss. The said provision was amended by the Finance Act of 1993 substituting sub-clause (ii) of clause (a) of sub-section (1A) of section 143 whereby additional tax has been levied even on loss worked out by the Assessing Officer after adjustment. Sub-section (1A) after the amendment of 1993 reads as follows: "(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; or (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ensatory support was made taxable. The Assessing Officer treated the assessee's income from compensatory support as additional income under sub-section (1A) of section 143 of the Income-tax Act and levied tax at higher rate on the additional income and also charged interest under section 234. The Revenue contended before the Supreme Court that once the Assessing Officer found that the assessee has not shown the cash compensatory support in his return, the levy of higher rate on additional income is justified. The Supreme Court rejected the contention of the Revenue holding as follows: "We have to consider if the stand of the Revenue is valid or will it not lead to unjust results for the assessee. The Revenue says under section 143(1A), the Assessing Officer has no choice and he has to levy additional tax once he finds that the assessee has not shown the amount of the cash compensatory support in his return, whatever the reason be. The assessee contends it is something which is most improper and against the settled principles... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Synthetics Ltd. [2001] 251 ITR 200; AIR 2001 SC 1531, delivered by a larger Bench. The Supreme Court in this judgment held as follows: "The substituted sub-section (1A), therefore, made it clear that even where the loss declared by an assessee had been reduced by reason of adjustments made under sub-section (1)(a), the provisions of sub-section (1A) would apply. This being a retrospective amendment, it covers the controversy in this appeal and, therefore, the appeal would have to be decided in favour of the Revenue. Learned counsel for the assessee, however, relied upon the judgment of a Bench of two learned judges of this court in CIT v. Hindustan Electro Graphites Ltd. [2000] 243 ITR 48. This was a case in which the return that the assessee had filed was correct by reason of the law as it stood when the return was filed. A retrospective amendment of section 28 of the Act rendered that return incorrect. An adjustment in the return was made under sub-section (1) of section 143 and, therefore, the provisions of sub-section (1A) were sought to be invoked. This was challenged and the High Court upheld the challenge, as did this court. It took the view that the additional penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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