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TMI Blog1997 (9) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of sections 143(1)(a), 143(1A) and 234 ?" The brief facts giving rise to this reference are that the assessee is a public limited company which filed its return of income for the assessment year 1989-90 on December 20, 1989. The Assessing Officer passed an order under section 143(1)(a) of the Act on July 5, 1990, and added a sum of Rs. 1,31,41,030 representing cash compensatory support received by the assessee but not offered to tax as an adjustment. Accordingly, additional income-tax under section 143(1A) of the Act and consequential interest was levied. On appeal, the Commissioner of Income-tax (Appeals) confirmed the order passed by the Assessing Officer. The Tribunal deleted the addition. Hence, the Revenue approached the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 143(1A) of the Act. Section 143(1A)(a) reads as under : " (1A)(a) Where, in the case of any person, the total income, as a result of the adjustments made under the first proviso to clause (a) of sub-section (1), exceeds the total income declared in the return by any amount, the Assessing Officer shall,-- (i) further increase the amount of tax payable under sub-section (1) by an additional income-tax calculated at the rate of twenty per cent. of the tax payable on such excess amount and specify the additional income-tax in the intimation to be sent under sub-clause (i) of clause (a) of sub-section (1) ; (ii) where any refund is due under sub-section (1), reduce the amount of such refund by an amount equivalent to the additional in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ep the assessee under check not to file the return in a thoughtless manner so that the Revenue may not be cheated inadvertently or advertently. This was only with a view to keep the assessee under check and not to take liberty of filing rash and irresponsible return. In the present peculiar case before us, in fact the assessee could not have thought of adding the compensation received from the Government of India which would be taxed with retrospective effect. Hence, at the time when the return was filed under section 139 of the Act on December 29, 1989, the aforesaid provision of section 28(iiib) was not in existence. It was only when the Assessing Officer was finalising the return filed by the assessee that the law came into force with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee on his voluntary return makes certain statements for purposes of claiming certain deductions and allowances and if they are found to be inadmissible prima facie, in that case additional tax can be charged. But where an assessee has filed a return and the Assessing Officer has not found it wanting in any way and meanwhile law is amended retrospectively attracting levy of tax, in that case holding the assessee guilty and levy him with additional dose of tax will be unfair and unjust. So far as levy of penalty and criminal liability is concerned it has been laid down in a catena of decisions of the Supreme Court that an act which was committed was not an offence but if it has become an offence because of retrospective operation of law, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause of justice. In this connection, our attention was invited to a decision of the Supreme Court in the case of Reliance Jute and Industries Ltd. v. CIT [1979] 120 ITR 921, wherein it has been laid down thus : "It is a cardinal principle of the tax law that the law to be applied is that in force in the assessment year unless otherwise provided expressly or by necessary implication..." In the case of Sulemanji Ganibhai v. CIT [1980] 121 ITR 373 ; [1979] MPLJ 416, which is a case of penalty, their Lordships of this court held that the quantum of penalty is to be determined by the law applicable in 1966 and the revised return not being under section 139(5) had to be ignored and that the amendment of 1968 not being retrospective was not ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax authorities to the basis upon which the cash compensatory support had not been included as income and had clearly offered to include the same in any assessment if the basis is shown to exist. " A similar view was taken by the Gujarat High Court following the Calcutta High Court judgment in the case of Gujarat Poly-Avx Electronics Ltd. v. Deputy CIT (Assessment) [1996] 222 ITR 140. Our attention was also invited to a decision of this court given in the case of Sanctus Drugs Pharmaceuticals Private Ltd. v. Union of India [1997] 225 ITR 252 wherein this court has taken the view that section 143(1A)(a)(B) is valid and is not penal in character. The question of validity of section 143(1A)(a)(B) is not involved here. It has been held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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