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.
Being aggrieved by the order dated 14.12.1992, the respondent filed two separate writ petitions to declare the provisions of Section 143 1A as ultra vires and companysequentially prayed for the quashing of the order dated 14.12.1992.
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.
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.
F.Nariman, J. The question which arises for companysideration in the present appeals is the companystitutional validity of the retrospective amendment to Section 143 1A of the Income Tax Act, 1961.
