2021 (9) TMI 1457 - SCH - Income Tax

Validity of the retrospective amendment to Section 143(1A) - whether the retrospective effect given to the amendment would be arbitrary and unreasonable inasmuch as the provision, being a penal provision, would operate harshly on assessees who have made a loss instead of a profit, the difference between the loss showed in the return filed by the assessee and the loss assessed to income tax having to bear an additional income tax at the rate of 20%? - HELD THAT - It is common ground raised in M/S. SATI OIL UDYOG LTD. ANOTHER 2015 (3) TMI 854 - SUPREME COURT as held that the issue raised in this appeal is squarely answered by this Cour Section 143 (1A) can only be invoked where it is found on facts that the lesser amount stated in the return filed by the assessee is a result of an attempt to evade tax lawfully payable by the assessee. The burden of proving that the assessee has so attempted to evade tax is on the revenue which may be discharged by the revenue by establishing facts and circumstances from which a reasonable inference can be drawn that the assessee has, in fact, attempted to evade tax lawfully payable by it. Subject to the aforesaid construction of Section 143 (1A), we uphold the retrospective clarificatory amendment of the said Section and allow the appeals. As the fact situation is similar, it is urged that this appeal may be disposed of on the same terms. Consequently, we hold that the additional tax levied on the appellant cannot be lawfully recovered. Hence, the demand raised by the Department is set aside. Accordingly, this appeal is allowed.

Summary

The Supreme Court allowed the appeal, holding that the additional tax levied on the appellant cannot be lawfully recovered, based on a previous judgment. The demand raised by the Department was set aside.