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TMI Blog2006 (7) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... JJ M. L. Garg for the appellant. JUDGMENT 1. This order will dispose of four appeals bearing Nos. 272 to 275 of 2005. The facts are being taken from I. T. A. No. 272 of 2005. 2. This is an appeal filed by the assessee raising the following substantial question of law, arising out of common order passed by the Income-tax Appellate Tribunal, Chandigarh Bench "A", (for short "the Tribunal") In I.T. A. Nos. 717/Chand./2000 and 718/Chand./2000, dated February 21, 2003, for the assessment years 1997-98 and 1998-99 respectively : "Whether the Income-tax Appellate Tribunal was right in law in holding that the law on the date of passing the order under section 143(1)(a) will apply and not the law on the date of filing the return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2)(a)(iii) has been amended with retrospective effect with effect from April 1, 1968, by which deduction was restricted only in respect of income earned for marketing of the agricultural produce grown by the members of the assessee-society. The learned authorised representative was also fair enough that in view of this amendment, the assessee is not entitled for the deduction but contended that the issue was debatable as the law on the date of filing of the return allowed for the deduction and retrospective amendment was challenged before the hon'ble Supreme Court. Section 143(1)(a) empowers the Assessing Officer to disallow the deduction claimed by the assessee where the assessee is entitled for the same on the face of return. The Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the hon'ble Supreme Court in the case of CIT v. Hindustan Electro Graphites Ltd. reported in [2000] 243 ITR 48 as well as the judgment of the hon'ble Punjab and Haryana High Court in the case of CIT v. Gian Talkies reported in [1982] 31 CTR 93 relied upon by the learned authorised representative and we find that these citations will not help the assessee. The issue involved in this case was only charging additional tax. There was retrospective amendment under section 28 by which clause (iiib) was inserted with retrospective effect and due to this retrospective effect, cash assistance received by the assessee become the income of the assessee. The Assessing Officer made the prima facie adjustment while processing the return i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot in dispute even on the date the return was processed, he fairly stated that in case the orders under section 143(1)(a) of the Act are set aside, the amount of tax paid by the assessee in terms of assessment would be refundable and it will become payable only when the assessment was framed under section 143(3) of the Act. Consequently, for the intervening period, the assessee would be entitled to interest on the amount. 8. We have considered the submissions made by learned counsel for the assessee and also perused the judgment of the hon'ble Supreme Court in CIT v. Hindustan Electro Graphites Ltd.'s case [2000] 243 ITR 48. Learned counsel for the assessee has not cited any judgment to support his argument to the effect that while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pport became taxable retrospectively with effect from April 1, 1967, but that was by an amendment of section 28 by the Finance Act of 1990, which amendment could not have been known before the Finance Act came into force. Levy of additional tax bears all the characteristics of penalty . Additional tax was levied as the assessee did not in his return show the income by way of cash compensatory support. After the assessee had filed its return of the income which was correct as per law on the date of filing of the return, the cash compensatory support also came within the sway of section 28. When additional tax has the imprint of penalty the revenue cannot say that levy of additional tax is automatic under section 143(1A) of the Act. If a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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