Op/3723/2002 Of M/S.rajagiri Rubber & Produce Co.ltd v. Jt.commr Of Income Tax,Ktm

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON WEDNESDAY, THE 19TH MAY 2010 / 29TH VAISAKHA 1932 OP.No. 3723 of 2002(R) ---------------------- PETITIONER: --------------- M/S. RAJAGIRI RUBBER AND PRODUCE CO.LTD. PANAMPILLY NAGAR, KOCHI-682 036, REP. BY ITS VICE PRESIDENT (FINANCE), MR.R.VENUGOPALAN. BY ADV. SRI.E.K.NANDAKUMAR SRI.E.K.NANDAKUMAR SRI.A.K.JAYASANKAR NAMBIAR SMT.PRIYA MAHESH SMT.PRIYA MANJOORAN RESPONDENTS: --------------- 1. JOINT COMMISSIONER OF INCOME TAX(ASSMT), SPECIAL RANGE, KOTTAYAM. 2. COMMISSIONER OF INCOME TAX, KAWDIAR, THIRUVANANTHAPURAM. 3. UNION OF INDIA, REP. BY ITS SECRETARY TO GOVERNMENT, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, NEW DELHI. 4. INSPECTING ASSISTANT COMMISSIONER OF AGRICULTURAL INCOME TAX AND SALES TAX (SPECIAL) COMMERCIAL TAXES COMPLEX, PERUMANOOR, ERNAKULAM. 5. COMMISSIONER OF AGRICULTURAL INCOME TAX, PUBLIC OFFICE BUILDING, THIRUVANANTHAPURAM. 6. STATE OF KERALA, CHIEF SECRETARY TO GOVERNMENT, SECRETARIAT, THIRUVANANTHAPURAM. ADV. SRI.P.K.R.MENON,SR.COUNSEL,GOI(TAXES) SRI.GEORGE K. GEORGE, SC FOR IT THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 17/05/2010, THE COURT ON 19/05/2010 DELIVERED THE FOLLOWING: P.R.RAMACHANDRA MENON, J -------------------------------------------- OP NO. 3723 OF 2002 -------------------------------------------- Dated this the 19[th] day of May, 2010 JUDGMENT The petitioner has approached this Court with the following reliefs. (i)To declare that income from centrifuged latex isassessable under the Agricultural Income Tax Act and to quash allproceedings including Ext.P3 notice issued by the 1[st] respondentproposing to assess the same income under Income Tax Act, 1961;by the issuance of a writ of certiorari or such other writ, order ordirection. (ii)Alternatively if this Court declares that income fromCetrifuged Latex or any part thereof is assessable under theIncome Tax Act, 1961, then to direct the 1[st] respondent to make theassessment without liability for interest or penalty on the petitionerand to simultaneously direct the 4[th] respondent to refund theamount of Agricultural Income Tax collected from the petitionerunder the Income Tax Act for so much of the income assessedunder the Central Act by the 1[st] respondent; (iii)To grant such other reliefs which this Hon'ble Courtmay deem fit on the facts and circumstances of the case and toallow the accompanying CMP and OP. 2.The petitioner is a manufacturer of centrifuged latex and hasbeen paying agricultural income tax. In respect of the assessment year 1990-91, the petitioner was served with Ext.P3 notice under Section 148 of the Income Tax Act referring to some income as escaped from assessement andrequiring the petitioner to file a reply so as to facilitate sufficient assessmentreferring to mandate under section 147. 3.Smt.Preetha Nair, the learned counsel appearing for thepetitioner submits that the CBDT has issued 'Circular' bearing No. 5/03 dated OP No. 3723/2002 22.05.2003, whereby it has been categorically stated that the course andproceedings under Section 147 or under Section 263 of the Income Tax Act,1961 cannot be initiated for the assessment years prior to the assessmentyear 2002-03 to determine the income liable to income tax, even if theassessee had already paid the agricultural income tax on such income. Thelearned counsel further submits that the Circular is applicable to the case inhand and that the proceedings pursued by the respondents are per se wrongand illegal in all respects. Reliance is placed on the decisions rendered bythis Court on 09.11.2004 in OP 935/1999 and 4207/2000 and also onanother judgment dated 15.07.2004 in OP 6870/1998. OP No. 3723/2002 22.05.2003, whereby it has been categorically stated that the course andproceedings under Section 147 or under Section 263 of the Income Tax Act,1961 cannot be initiated for the assessment years prior to the assessmentyear 2002-03 to determine the income liable to income tax, even if theassessee had already paid the agricultural income tax on such income. Thelearned counsel further submits that the Circular is applicable to the case inhand and that the proceedings pursued by the respondents are per se wrongand illegal in all respects. Reliance is placed on the decisions rendered bythis Court on 09.11.2004 in OP 935/1999 and 4207/2000 and also onanother judgment dated 15.07.2004 in OP 6870/1998. 3.The learned standing counsel appearing for the respondentsfairly conceded the factual and legal position as above and also as to thefinality to the issue by virtue of the judgments passed by this Court. In theabove circumstance, Ext.P3 notice in the Writ Petition is set aside as notcorrect or sustainable. The Writ Petition is allowed. No cost. dnc P.R.RAMACHANDRA MENONJUDGE