9911796707
TMI Blog2003 (10) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... for direct concession to the petitioner. It is further subject to strict scrutiny at the time of assessment proceedings. Taking all aspects into consideration, namely, the object of section 36(1)(viii) of the Act, the ruling of the Supreme Court in the case of CIT v. Sirpur Paper Mills, grant of approval for the subsequent years and consideration in similar circumstances and the safeguards in the assessment proceedings, the authorities are liable to grant approval to the petitioner. - - - - - Dated:- 30-10-2003 - Judge(s) : R. GURURAJAN. JUDGMENT R. GURURAJAN J.-These petitions are directed against an order of the Central Board of Direct Taxes dated May 3, 2000 (annexure K), and for a prayer to direct the Central Board of Direct Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment years 1998-99 and 1999-2000, respectively. Notifications are filed at annexures C and D. No approval is necessary for subsequent assessment years from 2000-2001 onwards. The first respondent did not accord approval for the assessment years 199596, 1996-97 and 1997-98. The petitioner aggrieved by the same filed a writ petition in this court in W.P. No. 29208 of 1999 seeking for a direction. This court passed an order on February 29, 2000, directing the first respondent to consider the petitioner's application with reference to the approval to be granted in terms of the Act. Thereafter, the petitioner submitted applications at annexures G and H. The petitioner also submitted annexure J to the first respondent. The first respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28-... (viii) in respect of any special reserve created and maintained by a financial corporation which is engaged in providing long-term finance for industrial or agricultural development or development of infrastructure facility in India or by a public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for resiential purposes, an amount not exceeding forty per cent. of the profits derived from such business of providing long-term finance (computed under the head 'Profits and gains of business or profession' befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. The same was challenged in this court and this court remitted the matter for reconsideration. After reconsideration, the matter has been remitted for consideration. After the remand, the authorities, namely, the first respondent, has chosen to reject the endorsement. The reason given by the respondent authority is that the Central Government has prescribed internal norms. The first respondent has rejected the request on the ground that the petitioner has not deployed the requisite level of capital in the housing finance for the assessment years 199697 and 1997-98. The authorities rely on internal norms for the purpose of approval. Admittedly, those norms were not made known by way of public notice. Non-application of internal norms to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be cut down under the guise of imposing a 'condition'. In fact, this is not a condition but an impermissible attempt to rewrite the section." The Supreme Court also approves the judgment of the Andhra Pradesh High Court in CIT v. Hyderabad Asbestos Cement Products Ltd. [1988] 172 ITR 762. In the case on hand, the non-published internal norms virtually curtail the scope of the section in the matter of deduction. Moreover, as rightly pointed out by Dr. Krishna, grant of approval by itself does not directly provide for direct concession to the petitioner. It is further subject to strict scrutiny at the time of assessment proceedings. Taking all aspects into consideration, namely, the object of section 36(1)(viii) of the Act, the ruling ..... X X X X Extracts X X X X X X X X Extracts X X X X
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