COMMISSIONER OF INCOME TAX, GAUHATI & ORS. versus M/S. SATI OIL UDYOG LTD. & ANR.

Citation: [2015] 2 S.C.R. 1099 · Decided: 24-03-2015 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[2015] 2 S.C.R. 1099 
COMMISSIONER OF INCOME TAX, 
GAUHATI & ORS. 
v. 
M/S. SATI OIL UDYOG LTD. & ANR. 
(Civil Appeal Nos.9133-9134 of 2003) 
MARCH 24, 2015 
A 
B 
[A.K. SIKRI AND ROHINTON FALl NARIMAN, JJ.] 
c 
Income Tax Act, 1961: s.143(1A) (as amended in 
1993)- Levy of 20% additional tax where total income as 
a result of adjustments made under first proviso to 
s.143(1)(a) exceeds the total income declared in the return 0 
-Retrospective effecf.Jto s.143(1A)- Constitutional validity 
of- Held: The amended s.14J(1A) has the deterrent effect 
of preventing tax evasion and, therefore, is applicable only 
to tax evaders and not honest assessee- s.143(1A) can 
be invoked only where it is found that lesser amount stated E 
in the return filed by assessee was the result of tax evasion 
-
The retrospective clarificatory amendment is 
constitutionally valid. 
Allowing the appeals, the Court 
HELD: The object of Section 143(1A) is prevention 
F 
of evasion of tax. By the introduction of this provision, 
persons who have filed returns in which they have 
sought to evade the tax properly payable by them is 
meant to have a deterrent effect and a hefty amount of G 
20% as additional income tax is payable on the 
difference between what is declared in the return and 
what is assessed to tax. The expression "income" 
1099 
H 
1100 
SUPREME COURT REPORTS 
[2015] 2 S.C.R. 
A contained in Section 143 (1A) is wide enough to 
include losses also. 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 
B 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, 
C attempted to evade tax lawfully payable by it. Subject 
to the said construction of Section 143 (1A), the 
retrospective clarificatory amendment of the said 
Section is upheld. [Paras 8, 17, 22] [1107-G-H; 1115-B, 
1021-G-H; 1122-A] 
D 
Commissioner of Income Tax Central, Delhi v. 
Harprasad & Company Pvt. Ltd. (1975) 3 SCC 868; CIT 
Joint Commissioner of Income Tax, Surat v. Saheli Leasing 
& Industries Ltd. 2010 (6) SCR 747 = (2010) 6 SCC 384 
E - relied on. 
Kerala State Coir Corpn Ltd. v. Union of India (1994) 
210 ITR 121 (Ker); Sanctus Drugs Pharmaceuticals Pvt. 
Ltd. v. Union of India (1997) 225 ITR 252 (MP); DCIT v. 
F Rajasthan State Electricity Board (2008) 299 ITR 253 (Raj); 
Bidar Sahakari Sakkare Karkhane Niyamat v Union of India 
(1999) 237 ITR 445 (Kar); Aluminium Industries Ltd. v. 
DCIT (Asst) (1998) 234 ITR 165 (Ker); Sukra Diamond 
Tools Pvt. Ltd. v. DCIT (1998) 229 ITR 682 (Mad); Modi 
Cement Limited v. Union of India (1992) 193 ITR 91; JK 
G Synthetics Limited v. Asstt. Commissioner of Income-Tax 
(1993) 2000 ITR 594; Indo Gulf Fertilizers & Chemicals 
Corpn. Ltd. v. Union of India (1992) 1951TR 485; Shiv Dutt 
Rai Fateh Chand v. Union of India 1983 (3) SCR 198 : 
H (1983) 3 SCC 529; Commissioner of Income Tax, Bhopal 
COMMISSIONER OF INCOME TAX, GAUHATI v. SATI1101 
OIL UDYOG LTD. 
v. Hindustan Electro Graphites, Indore 2000 (2) SCR 506 A 
: (2000) 3 SCC 595; K.P. Varghese v. ITO (1982) 1 SCR 
629 - referred to. 
Case Law Reference 
(1994) 210 ITR 121 (Ker) 
Referred to. 
Para 2 
B 
(1997) 225 ITR 252 (MP) 
Referred to. 
Para 2 
(2008) 299 ITR 253 (Raj) 
Referred to. 
Para 2 
(1999) 237 ITR 445 (Kar) 
Referred to. 
Para 2 
c 
(1998) 234 ITR 165 (Ker) Referred to. 
Para 2 
(1998) 229 ITR 682 (Mad) Referred to. 
Para 2 
(1975) 3 sec 868 
Relied on. 
Para 10 
D 
2010 (6) SCR 747 
Relied on. 
Para 11 
(1992) 193 ITR 91 
Referred to. 
Para 14 
(1993) 2000 ITR 594 
Referred to. 
Para 14 
E 
(1992) 195 ITR 485 
Referred to. 
Para 14 
1983 (3) SCR 198 · 
Referred to. 
Para 16 
2000 (2) SCR 506 
Referred to. 
Para 18 
F 
(1982) 1 SCR 629 
Referred to. 
Para 20 
CIVIL APPELLATE JURISDICTION: Civil Appeal No . 
. 9133-9134 of 2003 
From the Judgment and Order dated 12.4.2002 of the G 
Division Bench of the Gauhati High Court in W.A. No. 345 
and 365 of 1998. 
With 
H 
1102 
SUPREME COURT REPORTS 
[2015) 2 S.C.R. 
A 
C.A. No. 9135 of 2003 
B 
N.K. Kaul, ASG, Arijit Prasad, Parvesh Thakur, 
Akansha Kaul, Anil Katiyar for the Appellants. 
Abhijit Sengupta for the Respondents. 
The Judgment of the Court was delivered by 
R.F.NAR
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