- (1.) The question which arises for consideration in the present appeals is the constitutional validity of the retrospective amendment to Section 143(1A) of the Income Tax Act, 1961. 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.) It may be mentioned at the outset that the same provision in its retrospective operation has been upheld by the Kerala, Madhya Pradesh, Rajasthan, Karnataka and Madras High Courts. (Kerala State Coir Corpn Ltd. v. Union of India, 1994 210 ITR 121; Sanctus Drugs Pharmaceuticals Pvt. Ltd. v. Union of India, 1997 225 ITR 252;DCIT v. Rajasthan State Electricity Board, 2008 299 ITR 253(Raj); Bidar Sahakari Sakkare Karkhane Niyamat v Union of India, 1999 237 ITR 445; Aluminium Industries Ltd. v. DCIT (Asst), 1998 234 ITR 165(Ker); Sukra Diamond Tools Pvt. Ltd. v. DCIT, 1998 229 ITR 682(Mad)).
(3.) The facts necessary to decide these appeals are as follows. The respondent-herein in its annual return for assessment years 1989-1990 and 1991-1992 showed a loss of Rs.1,94,13,440/- and Rs.1,80,22,480/- respectively. By an assessment order dated 14.12.1992, the Assessing Officer levied an additional tax under Section 143 (1A) of Rs.5,62,490/- and Rs.8,09,290/- respectively for the two assessment years in question calculated in the manner provided in the Section. ;