2009 (12) TMI 7 - HC - Income Tax

Adjustment under section 143(1)(a) effect of retrospective amendment - provisions of Section 143(1A)(B) of the Income Tax Act, 1961 substituted by the Finance Act, 1993 with retrospective effect from 01.04.1989 AO made the addition but CIT(A) deleted the addition made u/s 143(1)(a) ITAT confirmed the order of CIT(A) as valid held that - Tribunal was not justified in deleting the additional tax levied upon the respondent/assessee. However, it was pointed out by the learned counsel for assessee that an application for rectification under Section 154 of the Act was filed. The said application is still pending consideration. Filing of the said application also finds place in the statement of the case. The authority concerned is therefore, to pass an appropriate order on the said application if the said application is pending consideration. ACIT Vs. J.K. Synthetics Ltd. 2008 -TMI - 6033 - SUPREME Court

Summary

Issues:
1. Appeal against order of Income Tax Appellate Tribunal regarding additional tax under Section 143(1A) of the Income Tax Act.
2. Validity of the additional tax levied by the Assessing Officer.
3. Contention over the deletion of additional income-tax under Section 143(1A) by the Commissioner of Income Tax (Appeals).
4. Interpretation of provisions of Section 143(1A)(B) of the Income Tax Act.

Analysis:
The High Court heard the appeal under Section 260-A of the Income Tax Act against the order of the Income Tax Appellate Tribunal. The assessee, a company, filed its return for the assessment year 1991-92 showing a loss of Rs. 21,23,335. The Assessing Officer made adjustments under Section 143(1)(a) of the Act and levied additional tax of Rs. 62,815 under Section 143(1A). The assessee filed an application under Section 154, which was pending without a decision. The assessee appealed before the Commissioner of Income Tax (Appeals), who allowed the appeal, a decision upheld by the Tribunal.

The substantial questions of law raised in the appeal concerned the correctness of the Tribunal's decision in quashing the additional tax levied under Section 143(1A) and the deletion of additional income-tax without considering the provisions of Section 143(1A)(B) of the Act. The High Court noted that the controversy regarding the levy of additional tax under Section 143(1A) had been settled in previous case law in favor of the Revenue. The Court found that the Tribunal erred in deleting the additional tax levied on the assessee.

However, the Court acknowledged that an application for rectification under Section 154 was pending. The Court directed the authority concerned to pass an appropriate order on the pending application. Consequently, the Court allowed the appeal, set aside the Tribunal's order confirming the Commissioner of Income Tax (Appeals) decision, and restored the assessment order, subject to the decision on the rectification application. No costs were awarded in the matter.