IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMAN MONDAY, THE 17TH MARCH 2008 / 27TH PHALGUNA 1929 OP.No. 1687 of 2002(A) PETITIONER: M/S. HARRISONS MALAYALAM LIMITED, WILLINGDON ISLAND, KOCHII - 682 003, REP. BY ITS COMPANY SECRETARY, MR.P.A.KRISHNAMOORTHY. BY ADV. 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-II, I.S. PRESS ROAD, ERNAKULAM. 2. COMMISSIONER OF INCOME TAX (ASSMT), SPECIAL RANGE-I, I.S. PRESS ROAD, ERNAKULAM. 3. UNION OF INDIA, REP. BY ITS SECRETARY TO GOVERNMENT, DEPARTMENT OF FINANCE, 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. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL,GOI(TAXES) SRI.GEORGE K. GEORGE, SC FOR IT GOVERNMENT PLEADER SRI. TCR CHAND THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 17/03/2008, ALONG WITH O.P. NOS. 1712 & 1713/2002, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: O.P. NO. 1687/2002 ORDER ON CMP NO. 2887/2002 IN O.P. 1687/2002 // DISMISSED // 17.3.2008. SD/-, P.R. RAMAN, JUDGE. APPENDIX PETITIONER'S EXHIBITS: EXT.P1 TRUE COPY OF THE ASSESSMENT ORDER ISSUED BY THE INSPECTING ASST. COMMISSIONER (SPL) FOR 1991-92 DATED 25.4.1997 TO THE PETITITONER. EXT.P1(a) TRUE COPY OF THE ORDER ISSUED BY THE INSPECTING ASST. COMMISSIONER DATED 29.10.1993 TO THE PETITIONER. EXT.P1(b) TRUE COPY OF THE ORDER ISSUED BY THE INSPECTING ASST. COMMISSIONER DATED 323.12.1993. EXT.P2 TRUE COPY OF THE CENTRAL INCOME TAX ASSESSMENT ORDER ISSUED BY THE INCOME TAX DEPARTMENT TO THE PETITIONER DATED 31.3.1994. EXT.P2(a) TRUE COPY OF THE ORDER OF THE DEPUTY COMMISSIONER OF INCOME TAX (ASSMT) TO THE PETITITONER DATED 19.9.1994. EXT. P3 TRUE COPY OF THE NOTICE RECEIVED FOR THE ASSESSMENT YEAR 1991-92 FROM THE 1ST RESPONDENT TO THE PETITIONER DATED 9.11.2000. // TRUE COPY // P.S. TO JUDGE. knc/- P.R. RAMAN, J. = = = = = = = = = O.P. NOS. 1687, 1712 & 1713/2002 NO. = = = = = = = = = = = = = = = = = = = = = = DATED THIS, THE 17TH DAY OF MARCH, 2008. J U D G M E N T M/s. Harrisons Malayalam Limited is the petitioner in all these original petitions. The issue that arises for consideration in all these writ petitions is the same. 2. Petitioner was assessed under the Agricultural Income Tax Act by the State, returning the entire income from rubber including the income from Centrifuged latex, Pale Latex Crepe, Estate Brown Latex etc. as agricultural income. Though the petitioner is also assessed under the Income tax Act, the income derived from the items referred to above were not included for the purpose of income tax under the Central Income Tax Act. In other words, petitioner was assessed to agricultural income alone under the Agricultural Income tax Act by the State. Subsequently, based on the decision of this Court in Kanam Latex Industries Pvt. Ltd. (221 ITR 1) the Income Tax Authorities proposed to assess the income from sale of Canex, PLC and EBC as "Business Income". If this happens, the immediate result will be that the petitioner will be mulcted with the liability O.P. 1687, 1712 & 1713/02 :2: to pay tax on the same income both under the Agricultural Income Tax Act by the State as also by the Income Tax Authorities under the Income Tax Act. To over-ride the hardship that may be caused in this regard, the Central Board of Direct Taxes issued Circular No.5 of 2003 dated 22nd May, 2003 which contained in 261 ITR 159 clarifying that no proceedings under Section 147 or under Section 263 of the Income-tax Act, 1961, should be initiated for the assessment year(s) prior to the assessment year 2002-03 in the cases of assessees earning income from manufacture of rubber and/or coffee, for determining the income liable to income-tax, if the assessees had already paid agricultural income-tax on the whole of such income. As such, the C.B.D.T. Circular No.5/2003 dated 22.5.2003 is squarely attracted in the case of the petitioner in these cases. 3. Admittedly, the assessment orders produced by the petitioners would show that he was assessed for agricultural income and the income from rubber was also included. It was while so, notices were issued by the Joint Commissioner of Income-tax proposing to revise the assessment based on the decision in Kanam Latex Industries' case as stated supra and it was subsequently, that the clarification has been issued. As a result, the Joint Commissioner had no occasion to apply the circular before issuing notice. O.P. 1687, 1712 & 1713/02 :3: In view of the position as explained above, petitioner has to be given relief based on the circular. In similar matters, this court had earlier ordered that the proceedings will stand closed in view of the circular issued. Accordingly, these writ petitions are allowed and in view of the circular as referred to above, the matter will stand closed. P.R. RAMAN, (JUDGE) knc/- O.P. 1687, 1712 & 1713/02 :4: P.R. RAMAN, J. = = = = = = = = O.P. NOS:- 1687, 1712 & 1713/2002 J U D G M E N T DATED: 17.3.2008.