9911796707
TMI Blog2004 (11) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be sustained - reassessment notices are totally without jurisdiction hence quashed. - - - - - Dated:- 23-11-2004 - Judge(s) : R. K. AGARWAL., PRAKASH KRISHNA. JUDGMENT The judgment of the court was delivered by Prakash Krishna J. - Challenging the validity of three notices issued under section 148 of the Income-tax Act, 1961, for the assessment years 1995-96, 1996-97 and 1997-98 the present writ petition has been filed. The petitioner is a regional rural bank and is an incorporated body established on March 29, 1976, under the provisions of section 3(1) of the Regional Rural Banks Act, 1976. The shareholding in the petitioner is as follows: (1) Government of India 50% (2) Bank of India 35% (3) Government of Uttar P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formed reasons to believe that the investment income has escaped assessment for all these three years by reason of excess allowance of deduction under section 80P of the Act. Challenging the validity of all these notices in the light of the reasons to believe, as recorded by the assessing authority, the present writ petition has been filed. Heard Sri Shakeel Ahmad, learned counsel for the petitioner and Sri A.N. Mahajan, learned standing counsel for the Revenue. The petitioner submitted that the reassessment notices in question are wholly arbitrary and without jurisdiction. The reasons recorded by the assessing authority to reopen the assessment legally do not give jurisdiction to him to issue reassessment notice as the apex court in it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es not set down the correct law and the law is as it has been put by it in the case of CIT v. Karnataka State Cooperative Apex Bank [2001] 251 ITR 194 (SC). This legal position was not disputed by learned standing counsel for the Revenue. If that is so the position which emerges from the above discussion is that the very foundation of the notices under section 148 of the Act has totally disappeared. It is not open to the Department to contend that only banking business is exempt under section 80P of the Act and the investment income is not exempt. Faced with this situation learned counsel for the respondent submitted that the day on which notices under section 148 of the Act were issued, the assessing authority validly assumed jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot go. We are in respectful agreement with the view taken by this court, which is otherwise binding on us. Even otherwise, this argument overlooks the well established principles of law that the interpretation put by a court on an enactment is operative from the date of the commencement of the Act. To put it differently, the interpretation of law operatives retrospectively, the interpretation given by a court, holds the field not from the date of pronouncement of the judgment but with effect from the date of enforcement of the concerned provision. Explaining the law, the Supreme Court in the famous case of L.C. Golak Nath v. State of Punjab, AIR 1967 SC 1643, para. (44A) has observed as follows: "(44A) There are two doctrines famil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeding. The writ petition was dismissed as premature. The Supreme Court, in appeal, confirmed the order of the High Court with the observation that when notices under section 148 of the Act have been issued, the proper course of action for the noticee is to file the return and if he so desires, to ask reasons for issuing notices. On receipt of reasons the noticee is entitled to file objection to the issuance of notice and the assessing authority is bound to dispose of the same by passing a speaking order. In that view of the matter the apex court dismissed the appeal. In the case in hand the assessing authority has furnished reasons and the petitioner has also filed the return. The reasons furnished by the assessing authority do not on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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