Shanti Prime Publication Pvt. Ltd.
Sections 143 of Income Tax Act, 1961—Assessment— The assessee is a Government Company as defined under Section 617 of the Companies Act, 1956. The assessee filed return on 30.12.1991 for the assessment year 1991-92 showing a loss. Due to a bonafide mistake the assessee claimed 100% depreciation on written down value of assets instead of 75% depreciation. Under the unamended Section 32(2) of the Income Tax Act, 1961 the assessee was entitled to claim 100% depreciation. However, after the amendment the depreciation could only be 75%. An intimation under Section 143(1)(a) of the Income Tax Act, 1961 dated 12.02.1992 was issued by the Assessing Officer disallowing 25% of the depreciation, restricting the depreciation to 75%. Additional tax under Section 143(1-A) of the Income Tax Act, 1961 was demanded. The assessee filed an application under Section 154 of the Income Tax Act, 1961 dated 18.02.1992 praying for rectification of the demand. The assessee also filed a petition under Section 264 of the Income Tax Act, 1961 against the demand of additional tax. In the petition it was stated that even after allowing only 75% of depreciation the income of the assessee remained to be in loss.The assessee prayed for quashing the demand of additional tax. The application filed under Section 154 of the Income Tax Act, 1961 was rejected by the Assessing Officer on 28.02.1992. The revision petition under Section 264 of the Income Tax Act, 1961 came to be dismissed by the Commissioner of Income Tax by order dated 31.03.1992 by giving the reasoning that the provision of section 143(1-A) shows that whenever adjustment is made, additional tax has to be charged @ 20% of tax payable on such excess amount. The assessee filed writ petition in the high court, the learned single judge allowed the writ petition quashing the levy of additional tax under section 143(1-A).The Revenue aggrieved by the judgment of the learned Single Judge filed a Special Appeal which has been allowed by the Division Bench of the High Court vide its judgment dated 13.11.2007 upholding the demand of additional tax. The assessee aggrieved by the judgment of division Bench and filed an appeal. In view of the facts, the Supreme court held that mechanical application of Section 143(1-A) in the facts of the present case was uncalled for. Court allowed the appeal and set aside the judgement of the division Bench of High Court as well as demand of additional tax dated 12.02.1992 as amended on 28. 02. 1992.--- RAJASTHAN STATE ELECTRICITY BOARD JAIPUR vs. Deputy CIT. 23 ITCD Online 21 (SC)