TMI Blog1992 (2) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... mount claimed under section 32A of the Act. As a result of the disallowance of the said amount, the figure of losses was brought down in the order, as "Adjusted total loss for the year . . . Rs. 58,02,60,207". The amount disallowed was to the extent of Rs. 4,67,10,306. The petitioner was thus required to pay Rs. 50,44,713 as additional tax under section 143(1A) of the Act. A sum of Rs. 37,98,100 was prepaid, hence the balance required to be deposited was Rs. 13,46,936, according to the impugned order. It has been submitted on behalf of the petitioner that no amount of income-tax or additional income-tax is chargeable on losses. By disallowance of investment allowance, only the amount of losses has been reduced. The petitioner still remains in loss to the tune of rupees fifty-eight crores odd. It has further been elaborated by saying that a decrease or reduction in losses does not amount to income. Sri S. C. Misra, learned counsel appearing on behalf of the opposite party, submits that the writ petition is not maintainable on the ground of availability of an alternative remedy. He further submits that additional income-tax charged under section 143(1A) of the Act is in the natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome" declared in the return. There is no dispute that in the return, only losses are shown even after adjustment and if there is no income, no tax or additional income-tax can be charged. Therefore, it is immaterial that the amount of losses are more or less. To elaborate further, it may be pointed out that if no tax was chargeable on the losses to the tune of rupees sixty-two crores odd, as shown in the return submitted by the petitioner, there would be no question of charging any additional income-tax under section 143(1A)(a) of the Act, on the amount of reduced losses, i.e., rupees fifty-eight crores odd. To put it plainly, if there is no income, there would be no income-tax of any kind, whether additional or by way of surcharge. Learned counsel for the petitioner has rightly placed reliance upon a case, Modi Cement Ltd. v. Union of India [1992] 193 ITR 91 (Delhi). In the said case, the order passed under section 143(1A)(a) of the Act was quashed under similar circumstances where, after adjustment, the assessee was still found to be in losses. Learned counsel for the opposite parties submits that the amount which is levied under section 143(1A)(a) of the Act is by way of penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of clause (i) of the Explanation apply in the case of loss returns only. These provisions are on the same lines as the provisions for the levy of penalty under section 271(1)(c) for concealment of income in the case of loss returns, as contained in clause (a) of Explanation 4 to section 271(1)." On the basis of the above paragraphs, it is submitted that the purpose of levy of additional income-tax is to deter the assessees from filing incorrect returns "to show lesser tax liabilities". It is further submitted that the cases of returns showing losses are also covered by clause (i) of the Explanation which applies in the cases of loss returns only. Para 5.9 further says that these provisions are on the same lines as the provisions for the levy of penalty under section 271(1)(c) for concealment of income in the case of loss returns. Sri S. C. Misra, learned counsel for the opposite party, submits that the judgment of the Delhi High Court in the case of Modi Cement Ltd. [1992] 193 ITR 91, would not be applicable as it appears that the circular mentioned above and the provisions contained in clause (a) of Explanation 4 to section 271(1) and the Explanation to section 143(1A) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal tax on the loss figure, after adjustment, has been rightly levied, learned counsel for the opposite parties has placed reliance upon the directions issued by the Board under the title "Kar Niriharan ke Naye Pravidhan Aur Unki Prakriya". It contains certain examples on the working of section 143 of the Act. In one of the examples, it is provided that additional tax is chargeable even if, after adjustment, it results in loss return. The submission is that the authorities are bound by the directions issued by the Board, hence they have committed no mistake in passing the impugned order in accordance with the directions indicated above. He refers to section 119 of the Act under which the authorities of the Department are bound to carry out the directions issued by the Board. In this connection, it may be observed that so far as the direction given by the Board is concerned, it may no doubt be binding upon the departmental authorities, but such directions do not bind the courts, and it is needless to cite cases on the point. So far as courts are concerned, they would only examine whether the orders passed by the departmental authorities are in accordance with the provisions of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the aforesaid Explanation applies in the cases of loss returns only. It may be true that it may apply in a case where a loss return has been filed but on adjustment, the losses have disappeared and there is positive income which can be taxed. But to apply it in cases where after adjustment, the return showing losses still shows losses, would not be correct. Since it is the case of the opposite parties that additional incometax is charged by way of penalty and further for the reason that Explanation 6 to section 271 of the Act provides that, where an order for payment of additional income-tax is passed tinder section 143(1A), provisions of clause (c) of section 271(1) would not be attracted, it may be seen, under what circumstances penalty can be imposed under section 271(1)(c) of the Act. In this connection, learned counsel for the petitioner has placed reliance upon the case, CIT v. Prithipal Singh and Co. [1990] 183 ITR 69 (P H), and it is submitted that in case of levy of additional incometax by way of penalty, the same principle would be applicable. It appears that the amount of losses as shown in the return submitted by the assessee was reduced considerably by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rectification application has been rejected and it is against that order that the petitioner went up in appeal which is pending before the Deputy Commissioner, Income-tax. The fact that no appeal lies against the order passed under section 143(1A) of the Act has not been refuted on behalf of the opposite parties. Learned counsel for the petitioner submits that the question for consideration before the Deputy Commissioner, Income-tax, is confined to whether the petitioner was entitled to the investment allowance or not. It has then been submitted that the petitioner could move the Commissioner of Income-tax under section 264 of the Act in revision. In this connection, it has been rightly pointed out by learned counsel for the petitioner that, in view of the stand taken by the opposite parties that the circulars and directions issued by the Board bind the departmental authorities, it will be of no use to approach the Commissioner of Income-tax. We also feel that the petitioner is right when it pointed out that no statutory appeal is provided against an order passed for payment of additional tax under section 143(1A) of the Act, and the matter under consideration before the Deputy ..... X X X X Extracts X X X X X X X X Extracts X X X X
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