2004 (1) TMI 27

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ad claimed allowable deduction in respect of the contingency reserve fund in the respective returns. Up to the assessment year 1994-95, the returns were accepted, allowing deduction in respect of the appropriation to contingency reserve fund and intimation under section 143(1)(a) was issued. Subsequently, notice under section 143(2) was issued. Regular assessment under section 143(3) was completed disallowing the appropriation to contingency reserve for the assessment years 1990-91 and 1992-93. Whereas regular assessment in respect of the assessment years 1993-94 and 1994-95 pursuant, to the notice under section 143(2) was pending. In respect of each of these four assessment years, notices under section 154 of the Act were also issued. So f....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....195 (SC). The main contention of Dr. Debiprosad Pal, senior counsel, appearing on behalf of the appellants, was that the assessment is to be made on the basis of the law applicable on the date of filing the return. In the assessment intimated under section 143(1)(a) while disallowing the appropriation to contingency reserve, the Assessing Officer had made an addition under section 143(1)(a), which is penal in nature and cannot be imposed when the return at the time of filing was not false or incorrect. According to him, though the decision in the case of Associated Power Co. Ltd. [1996] 218 ITR 195 (SC) was rendered on November 28,1995, it was not available or known to the appellant until this decision was published in Taxman on January 27,....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... gone into by the learned single judge. The learned single judge was pleased to observe that the writ was maintainable since the notices involved the question of jurisdiction. The maintainability was considered in respect of the other four assessment years where notices under section 154 were issued and the jurisdiction to issue such notices was involved. No such notice, however, was issued in respect of the assessment year 1995-96. However, the question of maintainability of the writ petition in respect of this particular assessment year can very well be examined. Admittedly, the remedy by way of appeal is available against the assessment intimated under section 143(1)(a). Admittedly, the Assessing Officer has jurisdiction to allow or disa....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... report or on the knowledge or information of any individual assessee. Therefore, the disallowance of deduction of appropriation to contingency reserve in respect of the return submitted after the decision in Associated Power Co. Ltd. [1996] 218 ITR 195 (SC) cannot be said to be without jurisdiction to maintain the writ petition. At the same time, it was not a question of addition under section 143(1)(a) of a tax in the nature of penalty. In fact, this appropriation to contingency reserve was disclosed in the return but claimed as an allowable deduction which was disallowed and adjusted without imposing any penal interest or otherwise. Therefore, it would not attract the mischief of the decision in Hindustan Electro Graphites Ltd. [2000]....