THE ALUMINIUM INDUSTRIES LTD. vs DEPUTY COMMISSIONER OF INCOME TAX and Another

G. SIVARAJAN, J. :

The petitioner in both the writ petitions is The Aluminium Industries Ltd, Kundara, an assessee on the files of the Dy. CIT (Assessment), Special Range, Trivandrum. For the asst. yrs. 1989-90 and 1990-91 the petitioner filed return in respect of its income under the IT Act, 1961 declaring total losses of Rs. 11,92,81,260 and Rs. 11,39,10,709 respectively as worked out in the statements marked as Ext. P-1 in both the cases. The petitioner also claimed a carry forward of the losses. The first respondent assessing authority issued intimation under s. 143(1)(a) of the Act whereby he determined the net losses for the aforesaid two years at Rs. 10,73,86,330 and Rs. 11,27,80,428. The difference in the losses returned by the petitioner and the losses assessed by the assessing authority is due to the disallowances made under s. 43B of the Act in the purported exercise of its power to make prima facie adjustments under s. 143(1)(a) of the Act. The assessing authority by Ext. P-3 proceedings rectified the mistake in the earlier order for 1989-90 and determined the net loss at Rs. 11,70,57,358 under s. 143(1)(a) of the Act. In the said order, the assessing authority also levied an additional tax amounting to Rs. 2,33,509. Similarly for the asst. yr. 1990-91 the assessing authority in Ext. P-2 intimation also levied an additional tax amounting to Rs. 1,26,428 under s. 143(1)(a) of the Act.

Aggrieved by the order levying additional tax for the asst. yrs. 1989-90 and 1990-91, the petitioner preferred revision petitions before the CIT under s. 264 of the Act. In these original petitions the petitioner has prayed for issuance of a writ of certiorari quashing Exts. P-2 and P-3 insofar as it relates to the levy of additional tax and also prayed for a writ of mandamus directing the respondents not to levy additional tax under s. 143(1)(a) of the Act. In both these cases, the petitioner had filed petitions to raise additional grounds. This is for the reason that cl. (a) of sub-s. (1A) has been substituted w.e.f. 1st April, 1989 to make the provision for levy of additional tax to cases of loss also. The petitioner has challenged the retrospective amendment of s. 143(1)(a) especially sub-cl. (B) of cl. (a) as void, inoperative and unconstitutional insofar as it levies additional tax on assessed losses after adjustments. The petitioner has, by way of amendment, sought additional relief for quashing s. 143(1)(a) and in particular sub-cl. (B) of cl. (a) to the extent it levies additional Income Tax on the loss declared by the assessee and also for a declaration that s. 143(1A)(a)(B) is ultra vires the provisions of Arts. 14, 19 and 265 of the Constitution of India.

According to the petitioner, in a case where a loss return is filed and even after the prima facie adjustments as contemplated under s. 143(1)(a) of the Act where the resultant figure in again a loss there is no question of levy of additional tax at all. This contention of the learned counsel for the petitioner has no force in view of the amendment made to s. 143(1)(a) of the Act which specifically provides for levy of additional tax even in a case of loss also. The correctness or otherwise of the prima facie adjustments made by the assessing authority is not in issue in these writ petitions. It is conceded by the learned counsel for the petitioner and the learned senior standing counsel for taxes that the question canvassed herein is covered by a decision of this Court in Kerala State Coir Corporation Ltd. Vs. Union of India (UOI) and Others, This Court in the said decision has held that the provision for levy of additional tax even where net result is loss after carrying out adjustments is intended to prevent evasion of tax and that the amendment of s. 143(1)(a) by the Finance Act, 1993, levying additional tax with retrospective effect from 1st April, 1989 does not violate Arts. 14 and 265 of the Constitution.

In view of the said decision of this Court, I do not find any merit in the contentions taken in these original petitions. The original petitions are dismissed. But, in the circumstances, there will be no orders as to costs.