Income Tax Appellate Tribunal - Mumbai
Assistant Commissioner Of Income-Tax vs Motichand Construction Co. (P.) Ltd. on 29 July, 1997
Equivalent citations: [1998]65ITD260(MUM)
ORDER
M.V.R. Prasad, A.M.
1. This appeal is directed against the order of the CIT (Appeals) dated 29-6-1993 for the assessment year 1989-90. The ground taken reads as follows :-
"On the facts and in the circumstances of the case and in law, the learned CIT (Appeals) erred in holding that the additional tax under section 143(1A) of the Income-tax Act is not attracted when the same has to be levied mandatorily pursuant to action under section 154 of the Income-tax Act for an erroneous processing of the total income under section 143(1)(a) of the Income-tax Act and, therefore, erred in deleting the additional tax of Rs. 6,653 levied on this count."
2. The Assessing Officer processed the return filed by the assessee on 7-12-1989 under the provisions of section 143(1)(a). At this stage, there was no liability for the payment of additional tax under section 143(1)(a) and as such, it was not charged. Subsequently, by virtue of an order under section 154 dated 30-12-1991, the Assessing Officer made certain addition, the correctness of which is not in dispute. Because of these additions; which are not disputed, the assessee became liable for levy of additional tax and it was charged. The additional tax, however, was deleted by the CIT (Appeals) with the following remarks :-
"2. The contention of the learned Counsel is that additional Tax can be charged only when total income is determined under section 143(1) (a) of the Income-tax Act, 1961. It cannot be levied under section 154 of the Income-tax Act, 1961. Under this section, the Additional Tax levied under section 143(1)(a) can neither be increased or decreased suitably if the same is not levied under section 143(1)(a) stage, it cannot be levied subsequently. There is force in the arguments of the learned Counsel. Section 143(1A) clearly lays down that Additional Tax is leviable only when the total income as a result of the adjustments made under the first proviso to section 143(1)(a) exceeds the total income declared in the Return. The stage to levy such Additional Tax is when the intimation under section 143(1)(a) is issued. Clause (b) of section 143(1) lays down that where as a result of an order the specified sections, like section 154, the amount on which Additional Tax is payable has increased or reduced, the Additional Tax would also be accordingly increased or reduced. It is clear from this that while passing an order under section 154, increasing or reducing the income determined under section 143(1)(a) the additional tax would be suitably increased or reduced. No Additional Tax can however be levied at this stage as the Act does not so provide.
3. Under the above facts and circumstances. I hold that Additional Tax cannot be levied for the first time by an order passed under section 154 of the Income-tax Act, 1961. The Assessing Officer is not justified in levying the Additional Tax under section 143(1A) by passing the present rectification order. He is directed to cancel the Additional Tax levied."
3. The learned D.R., invited our attention to the provisions of section 143(1A)(b) which reads as follows :-
"143(1A)(a) ** ** **
(b) Where as a result of an order under sub-section (3) of this section or section 154 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264, the amount on which additional income-tax is payable under clause (a) has been increased or reduced, as the case may be, the additional income-tax shall be increased or reduced accordingly; and -
(i) in a case where the additional income-tax is increased, the Assessing Officer shall serve on the assessee a notice of demand under section 156;
(ii) in a case where the additional income-tax is reduced the excess amount paid, if any, shall be refunded."
It is contended that on a plain reading of the above provision, when the total income gets altered because of an order under section 154, additional income-tax liable shall also be suitably increased or reduced. If 'nil' additional tax was charged initially, the 'nil' additional tax shall be increased suitably. There is no basis for holding that simply because no additional tax was charged in the first order, it cannot be increased later even if the total income gets altered because of an order under section 154 or other specified orders. No authority has been cited before us by the learned counsel for the assessee to counter the interpretation sought to be placed by the learned D.R. on the above provision.
4. We find ourselves in agreement with the learned D.R. To our mind, the import of the provision is self-evident and there is no ambiguity. If no additional tax was charged, it only means that the additional tax charged was 'nil' figure and can be increased subsequently in the specified circumstances. In this view of the matter, we set aside the order of the CIT (Appeals) and restore the additional tax levied at Rs. 6,653.
5. The appeal is allowed.