Delhi High Court
M/S. Ultra Marine Air Aids (P) Ltd vs Inspecting Assistant Commissioner on 7 January, 2011
Author: Sanjiv Khanna
Bench: Chief Justice, Sanjiv Khanna
R-17
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 1232/1987
M/S ULTRA MARINE AIR AIDS (P) LIMITED ..... Petitioner
Through Mr. Prem Nath Monga & Mr. Manu
Monga, Advocates.
versus
INSPECTING ASSISTANT COMMISSIONER ..... Respondent
Through Ms. Rashmi Chopra, Advocate.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE SANJIV KHANNA
ORDER
% 07.01.2011 Invoking the jurisdiction of this Court under Article 226 of the Constitution of India, the petitioner M/s Ultra Marine Air Aids (P) Limited has prayed for issue of a writ of certiorari for setting aside the notice under Section 148 of the Income-Tax Act, 1961 dated 28th January, 1987 on many a ground.
2. Pursuant to reassessment notice the petitioner filed his return of income and by his letter dated 11th April, 1987 had asked for reasons for reopening of assessment. The reasons were communicated by the Assessing Officer in his letter dated 29th April, 1987, which reads as under:-
"2. You had been allowed deduction of WRIT PETITION (CIVIL) NO. 1232/1987 Page 1 Rs.5 lakhs on account of donation made by you to M/s K.M. Scientific Research Centre, Bombay. The Central Board of Direct Taxes vide notification No. 6551 (F.No.203/23/85-IT (Inv.) dated 2.1.86 had withdrawn the approval to M/s K.M. Scientific Research Centre, for the purpose of Section 35(1)(11) w.e.f. 17.1.1980.
3. In view of the above information, I had reason to believe that income chargeable to tax had escaped assessment and hence proceedings for reassessment had been initiated.
4. Notice u/s 143(2) has already been issued to you in response to which you had attended my office on 20th April, 1987 and 28th April, 1987. Now the case is fixed for hearing on 5.5.87."
3. Mr. Prem Nath Monga, learned counsel for the petitioner has drawn our attention to Annexure-M, a notification dated 20th August, 1981 by which K.M. Scientific Centre was accorded permission/approval under Clause (2) of sub-section 1 of Section 35 of the Income-Tax Act, 1961. The said notification reads as under:-
" NOTIFICATION New Delhi 20.8.1981 INCOME TAX No. 4185 (F.No. 203/134/79-ITA.II): In continuation of this office Notification No. 2739 (F.No. 203/134/79-ITA II) dated 1.3.1979 it is hereby notified for general information that the Institution mentioned below has been approved by the Indian Council of Agricultural Research, the prescribed authority for the purpose of clause
(ii) of sub-section (1) of the Section 35 of the WRIT PETITION (CIVIL) NO. 1232/1987 Page 2 Income-Tax Act, 1961.
INSTITUTION K.M. Scientific Research Centre, Masoda, Motinagar, Faizabad (U.P.) This notification is effective for a period of 3 (Three) year from 17.1.1980 to 16.1.1983.
(M.K. PANDEY) DEPUTY SECRETARY TO THE GOVERNMENT OF INDIA"
4. Mr. Prem Nath Monga, learned counsel appearing for the petitioner-assessee has submitted that the initial notification contained in Annexure-M dated 20th August, 1981 has been withdrawn by subsequent notification dated 2nd January, 1986 with retrospective effect from 17 th January, 1980. The factual position is not disputed by Ms. Rashmi Chopra, learned counsel for the Revenue Department.
5. Mr. Prem Nath Monga, learned counsel appearing for the petitioner-assessee has submitted that the notification dated 2 nd January, 1986 was challenged before the Allahabad High Court and a Division Bench of the Allahabad High Court in K.M. Scientific Research Centre versus Lakshman Prasad and Others, 1998 (228) ITR 23(All.) has quashed the said notification. Learned counsel for the petitioner- assessee has also commended the decision of the Bombay High Court in Ramdas Maneklal Gandhi versus Union of India and Another, 241 ITR 437 (BOMBAY) wherein the High Court of Bombay has held that WRIT PETITION (CIVIL) NO. 1232/1987 Page 3 the notification granting benefit cannot be retrospectively withdrawn.
6. As advised, at present, we are not referring to this decision of the Bombay High Court because the notification dated 2nd January, 1986 in the case at hand specifically related to K.M. Scientific Research Centre, which has been quashed by the Allahabad High Court. As the notification has been quashed and the same has not been assailed by the Revenue Department, the reasons for reopening the assessment under Section 147/148 of the Income-Tax Act, 1961, do not survive. The very basis and foundation for issue of reassessment notice has ceased to exist. Consequently, the writ petition is allowed and the notice issued vide Annexure-E dated 28th January, 1987 is quashed. There shall be no order as to costs.
CHIEF JUSTICE SANJIV KHANNA, J.
JANUARY 07, 2011 VKR WRIT PETITION (CIVIL) NO. 1232/1987 Page 4