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Section 143(1A) of the Income-tax Act, 1961 - Assessment - Additional tax - Assessment year 1991-91 - Whether where return filed was showing loss and even after making adjustments income had not further increased, additional tax could not be levied - Held, yes FACTS The petitioners submitted its return of income showing loss. The Assessing Officer levied additional tax under section 143(1A). The petitioner filed objections and thereafter the said order was revised and the additional tax was reduced. On writ: HELD An analysis of the sub-sections(1) and (1A) of section 143 will show that before the amount of tax payable under sub-section (1) is further increased by an additional income-tax calculated at the rate of twenty per cent of the tax payable on the excess amount, if any, as a result of adjustments, it is necessary that a return should have been filed either under section 139 or in response to a notice under sub-section (1) of section 142. Further, the adjustments must have been made under the first proviso to clause (a ) of sub-section (1) and, as a result of such adjustments, the total income should exceed the total income declared in the return filed as aforesaid. A bare reading of section 143(1A)(a ) will show that not only in the return of income filed either under section 139 or in response to a notice under section 142(1), an income and not loss should be shown, but further, as a result of adjustments under the first proviso to clause (a ) of sub-section (1) of section 143, the income should further exceed and only to the extent of the income so further increased, the amount of tax payable under sub-section (1) is to be increased, by an additional amount of income-tax calculated at the rate of 20 per cent, of the tax payable on such excess amount. Sub-section (1A) of section 143 admits of no ambiguity. In the instant case, there was no dispute that not only the return showing loss was filed, but as a result of adjustments also the income had not further increased and there was no question of any additional tax being levied or charged. The petition was, therefore, allowed. Note : The case was decided in favour of the assessee. CASE REFERRED TO Modi…

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