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TMI Blog1998 (4) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... O charged additional interest under s. 143(1A) of the Act for Rs. 7,290. The assessee came in appeal against this action of the AO and it was pleaded that no tax was payable as per the returned or assessed income which was in negative figure. The case of the assessee was that he has filed return of loss and even after adjustment under s. 143(1)(a) of the Act, the assessed income is still in loss and thus no tax under s. 143(1A) was leviable. This plea of the assessee was considered by the learned CIT(A) and he confirmed the action of the AO after observing that additional tax under s. 143(1A) was leviable even though the income returned and income assessed was made at a negative figure. The appeal was dismissed and the assessee is in appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explanatory sheet annexed to the said intimation sent under s. 143(1)(a) of the Act. As the AO reduced the amount of loss, he proceeded to invoke and apply the provisions of s. 143(1A) and came to the conclusion that additional tax of Rs. 38,60,075 was payable by the petitioner. Their Lordships while deciding the issue in favour of the assessee took into consideration the provisions of s. 143(1A) which came on the statute book w.e.f. 1st April, 1989, and reproduced the same as under: "143(1A)(a).—where, in the case of any person the total income, as a result of the adjustments made under the first proviso to cl. (a) of sub-s. (1), exceeds the total income declared in the return by any amount, the AO shall: (i) Further increase the amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncreases the amount of tax payable". This clearly indicates that as a result of the adjustments made there should be demand of the tax and it is in addition to this tax that 20 per cent of the tax payable on the excess amount is also chargeable. The said provision clearly stipulates that after an adjustment under sub-s. (1) is made, the tax payable under s. 143(1) is determined and to the tax so determined a further amount calculated @ 20 per cent of the tax payable on the amount adjusted is also leviable and payable by the assessee. What is important is that as a result of the adjustments carried out under sub-s. (1) of s. 143, the assessee became liable to pay same tax. Whereas, in the present case, after the adjustments under s. 143(1) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned about the word "total income" used in s. 143(1A)(a) of the Act and took help from Expln. (6) to s. 271 of the Act, which was also provision for penalty in the case of income or loss declared in the return under s. 143(1A). But it is also a fact that on account of this interpretation of law, the legislature in its wisdom must have come to the conclusion that their purpose of inserting the provisions of s. 143(1A) was not being served that is why whole of the provision of s. 143(1A) was substituted by the Finance Act, 1993, and that too with retrospective effect from 1st April, 1989, and now the provisions of this s. 143(1A) are as under: "(1A)(a). Where as a result of the adjustments made under the first proviso to cl. (a) of sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was also the year under consideration before the Hon'ble High Court of Allahabad but the fact remains that their Lordships applied the provisions of s. 143(1A) as were available on the statute book on the date of decision but we have to apply the provisions of s. 143(1A) which are existing at present and admittedly the above provisions were made applicable with retrospective effect i.e. 1st April, 1989, and applicable to the present case of the assessee. The provision of s. 143(1A)(a) is quite clear and if the loss declared by the assessee stands reduced under sub-cl. (ii) of sub-s. (1A) of s. 143 then the AO shall calculate the sum equal to 20 per cent of the tax that would have been chargeable on the amount of adjustment as if it ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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