Restrospective Operation of Sec.143(1A) of Income Tax Act ,1961 upheld.

The Supreme Court today upheld the retrospective operation of Sec.143(1A) of the Income Tax Act,1961 and thereby avoided the conflicting judgments of various high court.

COMMISSIONER OF INCOME TAX, GAUHATI & ORS. v. M/S. SATI OIL UDYOG LTD. & ANR
CIVIL APPEAL NOS.9133-9134 OF 2003

Judgment Dated : 24/03/2015

CORAM : A.K. Sikri .J , R.F. Nariman .J

ISSUE INVOLVED :
Constitutional validity of the retrospective amendment to Section 143(1A) of the Income Tax Act, 1961.

CATCHPHRASE:

1. Both the Single Judge and the Division Bench of the Gauhati High Court have held that the retrospective effect given to the amendment would be arbitrary and unreasonable inasmuch as the provision, being a penal provision, would operate harshly on assessees who have made a loss instead of a profit, the difference between the loss showed in the return filed by the assessee and the loss assessed to income tax having to bear
an additional income tax at the rate of 20%.

2. The same provision in its retrospective operation has been upheld by the Kerala, Madhya Pradesh, Rajasthan, Karnataka and Madras High Courts.

3. Section 143 (1A) can only be invoked where it is found on facts that the lesser amount stated in the return filed by the assessee is a result of an attempt to evade tax lawfully payable by the assessee. The burden of proving that the assessee has so attempted to evade tax is on the revenue which may be discharged by the revenue by establishing facts and circumstances from which a reasonable inference can be drawn that the assessee has, in fact, attempted to evade tax lawfully payable by it.