2004 (11) TMI 32

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.... as follows: (1) Government of India  50% (2) Bank of India   35% (3) Government of Uttar Pradesh  15% It was established mainly with a view to provide basic banking facility in the remote rural areas and to mobilise savings from the rural masses. In the course of banking business the petitioner made investment with the nationalised bank and financial institutions, etc., to earn income. The petitioner for the assessment years 1995-96 to 1997-98 filed its income-tax returns. The assessments were completed and the disclosed income in the returns was accepted by the Income-tax Department. The assessing authority while passing the assessment order under section 143(1) of the Income-tax Act, 1961 (hereinafter referred to ....

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....en the assessment legally do not give jurisdiction to him to issue reassessment notice as the apex court in its subsequent judgment has reversed its earlier judgment, on which notices were issued. He placed reliance upon CIT v. Karnataka State Co-operative Apex Bank [2001] 251 ITR 194 (SC). In contra learned counsel for the Department submitted that the day on which reassessment notices were issued the assessing authority had validly exercised his jurisdiction to reopen the assessment, as the judgment of the Supreme Court delivered in the case of M.P. Co-operative Bank Ltd. v. Addl. CIT [1996] 218 ITR 438 was holding the field. Subsequent overruling of the said judgment will not, in any way, affect the validity of the reassessment notices.....

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.... which notices under section 148 of the Act were issued, the assessing authority validly assumed jurisdiction to initiate reassessment proceedings in view of the then prevailing law, as interpreted by the Supreme Court in the case of M.P. Co-operative Bank Ltd. [1996] 218 ITR 438 and the initiation of proceeding was valid. Elaborating the argument it was submitted that no case for interference under article 226 of the Constitution of India by this court, has been made out, notwithstanding the fact that the earlier judgment of the Supreme Court has been overruled by it. He has relied upon the following decisions: (1) Poonjabhai Vanmalidas and Sons (HUF) v. CIT [1974] 95 ITR 251 (Guj) [FB]; (2) CIT v. Maneklal Harilal Spinning and Manufactu....

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....unjab, AIR 1967 SC 1643, para. (44A) has observed as follows: "(44A) There are two doctrines familiar to American jurisprudence, one is described as the Blackstonian theory and the other as 'prospective overruling', which may have some relevance to the present enquiry. Blackstone in his commentaries, 69 (15th edn. 1809) stated the common law rule that the duty of the court was 'not to pronounce a new rule but to maintain and expound the old one'. It means the judge does not make law but only discovers or finds the true law. The law has always been the same. If a subsequent decision changes the earlier one, the latter decision does not make law but only discovers the correct principle of law. The result of this view is that it is necessaril....