I know mathematical induction works for negative numbers. But, why it is giving me inappropriate results here?
Consider $1+2+3+\dots+n=\frac{n(n+1)}{2}$. I could prove base case by taking $n=0$. Then, after I suppose it holds for $K$, some integer, I could easily prove that it holds for $(K-1)$. So, by the principle of mathematical induction, it should hold for any integer $n$, but the actual verification fails as it isn't satisfied for $n=-1,-2$, or any other negative number.
There's nothing wrong with "backwards" induction over the negative integers. Regular old induction over the natural numbers involves a predicate $P(n)$ over the natural numbers (i.e. a sequence of true/false statements depending on a variable $n \in \Bbb{N}$). If you show $P(0)$ to be true, and prove for all $n$, $P(n) \implies P(n + 1)$, then you've proven $P(n)$ for all $n$; this is the principle of induction.
On the other hand, if you have a predicate $Q(m)$ for integers $m \le 0$, then we can simply define a predicate $P(n)$ over $n \in \Bbb{N}$ so that $P(n)$ is $Q(-n)$. So, if we prove $Q(0)$, then we have shown $P(0)$. If we prove $Q(m) \implies Q(m - 1)$ for all $m \le 0$, then we have shown $P(n) \implies P(n + 1)$ for all $n \ge 0$. By regular old induction, $P(n)$ is true for all $n \ge 0$, and hence $Q(m)$ must be true for all $m \le 0$.
Sorry if that was a bit technical; the short version is, backwards induction over negative integers works perfectly well, as it is a slightly obfuscated version of the normal forward induction.
Now, the other question: why is backwards induction not working in this case? Well, let's look at the forward induction proof first. In particular, the inductive step looks like this:
Now, let's consider the backwards induction inductive step in the same way. Start by assuming $$-k + (-k + 1) + \ldots + (-1) = (-k)(-k + 1) / 2$$ for some $-k \le 0$. If we add $(-k - 1)$ to both sides, we get the correct left hand side, but the right hand side is more iffy. $$(-k - 1) + (-k) + (-k + 1) + \ldots + (-1) = (-k)(-k + 1) / 2 + (-k - 1)$$ In order for the induction to work, we would have to have $$(-k)(-k + 1) / 2 + (-k - 1) = (-k - 1)(-k) / 2$$ for all integers $-k \le 0$. This doesn't hold! Try subbing in some specific values of $k$, and you'll see that these polynomials are not the same.
This is the real reason why this particular proof is failing: the algebra simply doesn't add up.