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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 ..... tion 154 passed by the Assessing Officer. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustment while processing the return. Intimation 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss was reduced as a result of the prima 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 ..... the contention of the ld. D.R. that if the adjustment was made by rectifying the intimation then, by the order of rectification also additional tax could be levied under section 143(1A). In the case of Sukra Diamond Tolls P. Ltd. v. Dy. CIT [1998] 229 ITR 682 relied on by the Ld. D.R. the Madras High Court held that a plain reading of section 143(1A)(a) of the Act showed that where even a loss was 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vy of additional tax under section 143(1A) was not automatic as it had the imprint of penalty. In that case the Apex Court observed: "When additional tax has the imprint of penalty, the Revenue cannot be heard to say that the levy of additional tax is automatic under section 143(1A) of the Act. If additional tax could be levied in such circumstances, it will be punishing the assessee for no fault of 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 administrati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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