M/S THE BUDHEWAL COOP SUGAR MILLS vs. COMMISSIONER OF INCOME TAX
What were the facts?
The assessee, M/s The Budhewal Cooperative Sugar Mills Ltd., Ludhiana, filed its return for assessment year 1991-92 declaring a loss of Rs. 26,58,582/-. During processing under Section 143(1)(a) of the Income Tax Act, 1961, an adjustment of Rs. 20,66,107/- was made due to disallowance of a deduction under Section 80-P. This reduced the loss to Rs. 5,92,475/- and resulted in an additional tax levy of Rs. 1,61,086/- under Section 143(1A). The CIT(A) deleted this demand, but the ITAT, in appeal by the revenue, set aside the CIT(A)'s order and upheld the additional tax levy. The assessee is now in appeal before the High Court.
What did the High Court hold?
The High Court held that the question raised by the assessee has already been decided by this Court in CIT, Patiala v. M/s Swaraj Mazda Limited, Chandigarh (ITR No. 321 of 1995, decided on 27.11.2006). In that case, it was held that even if the processing under Section 143(1)(a) results in a mere reduction of loss, the assessee is still liable to pay additional tax under Section 143(1A). Therefore, the question is answered against the assessee and in favour of the revenue. Regarding the contention that subsequent regular assessment deleted the disallowances, the Court referred to the Swaraj Mazda's case judgment, which, referencing a Board circular, held that if the assessee is entitled to relief as per the circular, it would be granted. The appeal was disposed of in the manner indicated.
What were the issues?
1. Whether, in the facts and circumstances, the order of the Appellate Tribunal upholding the imposition of additional tax of Rs. 1,61,086/- is legally sustainable, especially when the return showed a loss and no tax was payable as per the assessment order? (Question of law, concerning Section 143(1A) of the Income Tax Act, 1961). Assessee's contention: The additional tax is not legally sustainable as the assessee had declared a loss and no tax was payable. Furthermore, subsequent regular assessment under Section 143(3) deleted the disallowances made during processing, which should affect the additional tax levy. Revenue's contention: Not recorded in the judgment.
Which sections of the Income-tax Act were involved?
Section 143(1)(a),Section 143(1A),Section 80-P,Section 143(3)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORDER: This appeal has been preferred by the assessee against the order dated 27.4.2000 of Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh in I.T.A.No.1935 of 1992 in respect of the assessment year 1991-92.
The assessee filed its return of income tax for the assessment year in question declaring loss of Rs.26,58,582/-. While processing the return under Section 143(I)(a) of the Income Tax Act,1961(for short 'the Act'), an adjustment of Rs. 20,66,107/- was made as the assessee was found to be not entitled to deduction under Section 80-P of the Act. As a result of the adjustment, the loss was reduced to Rs.5,92,475/-, resultantly, additional t
The order continues below.
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