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 19th day of May, 2010 JUDGMENT The petitioner has approached this Court with the following reliefs. (i) To declare that income from centrifuged latex is assessable under the Agricultural Income Tax Act and to quash all proceedings including Ext.P3 notice issued by the 1st respondent proposing to assess the same income under Income Tax Act, 1961; by the issuance of a writ of certiorari or such other writ, order or direction. (ii) Alternatively if this Court declares that income from Cetrifuged Latex or any part thereof is assessable under the Income Tax Act, 1961, then to direct the 1st respondent to make the assessment without liability for interest or penalty on the petitioner and to simultaneously direct the 4th respondent to refund the amount of Agricultural Income Tax collected from the petitioner under the Income Tax Act for so much of the income assessed under the Central Act by the 1st respondent; (iii) To grant such other reliefs which this Hon'ble Court may deem fit on the facts and circumstances of the case and to allow the accompanying CMP and OP. 2. The petitioner is a manufacturer of centrifuged latex and has been 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 and requiring the petitioner to file a reply so as to facilitate sufficient assessment referring to mandate under section 147. 3. Smt.Preetha Nair, the learned counsel appearing for the petitioner submits that the CBDT has issued 'Circular' bearing No. 5/03 dated 2 OP No. 3723/2002 22.05.2003, whereby it has been categorically stated that the course and proceedings under Section 147 or under Section 263 of the Income Tax Act, 1961 cannot be initiated for the assessment years prior to the assessment year 2002-03 to determine the income liable to income tax, even if the assessee had already paid the agricultural income tax on such income. The learned counsel further submits that the Circular is applicable to the case in hand and that the proceedings pursued by the respondents are per se wrong and illegal in all respects. Reliance is placed on the decisions rendered by this Court on 09.11.2004 in OP 935/1999 and 4207/2000 and also on another judgment dated 15.07.2004 in OP 6870/1998. 3. The learned standing counsel appearing for the respondents fairly conceded the factual and legal position as above and also as to the finality to the issue by virtue of the judgments passed by this Court. In the above circumstance, Ext.P3 notice in the Writ Petition is set aside as not correct or sustainable. The Writ Petition is allowed. No cost. P.R.RAMACHANDRA MENON JUDGE dnc