JUDGMENT

D.P. Wadhwa, J.-The question of law which falls for consideration is :

whether on the facts and in the circumstances of the case, Tribunal was justified in deleting the addition made by the Assessing Officer under Section 143(1)(a) in view of the clear cut provisions of Section 143(1)(a), 143(1A) and 234?

2. Respondent, the assessee, filed its return of income for the assessment year 1989-90. The return was filed on December 29, 1989. It was filed under Section 139 of the Income Tax Act, 1961 (for short, the Act ).

3. Under Section 28 of the Act, income mentioned therein is chargeable to income tax under the head "profits and gains of business or profession". Clause (iii)(b) in Section 28 was inserted by the Finance Act of 1990. Finance Bill which ultimately became the Finance Act received assent of the President of India on May 31, 1990. Clause (iii)(b) was given retrospective operation w.e.f. April 1, 1967. Clause (iii)(b) is as under :

"(iii)(b)-Cash assistance (by whatever named called) received or receivable by any person against exports under any scheme of the Government of India."

4. Before the insertion of clause (iii)(b), cash assistance received by any person against exports under any scheme of the Government could not be chargeable to income tax under the head "profits and gains of business or profession". The assessee had received in the previous year relevant to the assessment year 1988-89 a sum of Rs. 1,31,41,030/- by way of cash assistance. Since clause (iii)(b) was inserted in Section 28, though having retrospective operation by the Finance Act, 1990, the assessee did not include this income in its return which, as noted above, was filed on December 29, 1989. The assessee is a public limited company and for the assessment year 1989-90 last date of filing of return of income was December 31, 1989.

5. Deputy Commissioner Income Tax (Assessment) Special Range, Bhopal was the Assessing Officer. He by his order dated May 5, 1990 passed under Section 143(1)(a)* of the Act added the aforesaid amount of Rs. 1,31,41,030/- representing the cash compensatory support and received by the assessee. The assessee had not offered this amount to tax. The Assessing Officer treated this as additional income under Section 143(1A)** of the Act and levied the amount of tax at higher rate on this additional income and also charged interest under Section 234*** of the Act.

6. The assessee filed an appeal against the order of the Assessing Officer before the Commissioner of Income-Tax (Appeal), Bhopal who partly allowed the appeal on that part with which we are not concerned. The assessee then took the matter in appeal to the Income Tax Appellate Tribunal (Indore Bench), Indore (for short, the Tribunal ). The Tribunal by its order dated August 11, 1992 allowed the appeal holding that no additional tax could be levied in respect of the amount of cash compensatory support and no interest under Section 234 could be charged on the said amount. Now, it was the Revenue which was aggrieved. At the instance of the Revenue, the Tribunal referred the question to the High Court of Madhya Pradesh under Section 256(1) of the Act for its opinion. High Court by its impugned judgment dated September 11, 1997 answered the question in affirmative, i.e., in favour of the assessee and against the Revenue. Against the judgment of the High Court, Revenue sought leave to appeal to this Court which was granted and that is how the matter is now before us.

7. We have to consider if the stand of the Revenue is valid or will it not lead to unjust results for the assessee. Revenue says under Section 143(1A), the Assessing Officer has no choice and he has to levy additional tax once he finds that the assessee has not shown the amount of the cash compensatory support in his return, whatever the reason be. Assessee contends it is something which is most improper and against the settled principles.

8. In Modern Fibotex India Ltd. and another v. Deputy Commissioner of