Delhi High Court
M/S. Ultra Marine Air Aids (P) Ltd vs Inspecting Assistant ... on 7 January, 2011
Author: 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 dated 2.1.86 had withdrawn the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
