COMMISSIONER OF INCOME TAX Vs. HINDUSTAN ELECTROGRAPHITE LIMITED

JUDGEMENT

(1.) THIS is a reference under Section 256(1) of the Income-tax Act, 1961, at the instance of the Revenue and the following question of law has been referred by the Tribunal for answer by this court:

(2.) THE brief facts giving rise to this reference are that the assessee is a public limited company which filed its return of income for the assessment year 1989-90 on December 20, 1989. THE Assessing Officer passed an order under Section 143(1)(a) of the Act on July 5, 1990, and added a sum of Rs. 1,31,41,030 representing cash compensatory support received by the assessee but not offered to tax as an adjustment. Accordingly, additional income-tax under Section 143(1A) of the Act and consequential interest was levied. On appeal, the Commissioner of Income-tax (Appeals) confirmed the order passed by the Assessing Officer. THE Tribunal deleted the addition. Hence, the Revenue approached the Tribunal for making a reference and, accordingly, the aforementioned question of law has been referred by the Tribunal for answer by this court.

(3.) AT the time the assessee filed the return, the aforesaid provision in Section 28(iiib) was not there but by enactment of the Finance Act, 1990, Clause (iiib) in Section 28 of the Act was inserted with retrospective effect from April 1, 1967. Accordingly, treating it to have fictionally come into force from April 1, 1967, the Assessing Officer imposed additional tax under Section 143(1A) of the Act. Section 143(1A)(a) reads as under :