Additional Tax u/s 143(1) Isn’t Valid If Assessee Revised His Return and Same Was Taken Up in Scrutiny | HC

Case Details: Khandelwal Rubber Products (P.) Ltd. vs. Commissioner of Income-tax - [2024] 162 taxmann.com 897 (Allahabad)

Judiciary and Counsel Details

• • Saumitra Dayal Singh & Donadi Ramesh, JJ.
  • S.K. Garg & Ashish Bansal for the Appellant.
  • Krishna Agarawal

Facts of the Case

The present appeal has been filed by the assessee against the order passed by the Income Tax Appellate Tribunal. By that order, the Tribunal has dismissed the appeal filed by the assessee and confirmed the demand for additional tax imposed under section 143(1A) of the Income Tax Act, 1961. The appeal was admitted on the questions of law:

“Was the additional tax levied based on the loss shown in the original return valid, given that the original return became non-existent after revision and the Assessing Officer issued a notice under Section 143(2) based on the revised return?”

High Court Held

The High Court held that the provisions of section 143(1A) of the Act, would apply and remain confined to situations covered u/s 143(1)(a) of the Act. The High Court observed that the provisions of section 143(1A) could not apply to a case where an assessment may have been completed u/s 143(3) of the Act.

The High Court further noted that once the assessment proceedings concluded, neither the original intimation issued under Section 143(1)(a) remained nor was there a legal basis to invoke the provision of Section 143(1A). The High Court held that by initiating the assessment proceedings under Section 143(3) of the Act, the Assessing Officer himself eliminated the basis to invoke Section 143(1A). Consequently, the appeal was to be allowed.

List of Cases Reviewed

• • Biland Ram Hargan Dass v. Commissioner of Income-tax (1987) Taxman 423 (Allahabad) 1987 (35).[Para 22] – Distinguished.