Girish Chandra Gupta, J. - (1.) The notices issued under Section 154 of the Income-tax Act, 1961, seeking to rectify summary assessments made under Section 143(1)(a) of the aforesaid Act for the assessment years 1990-91, 1992-93,1993-94 and 1994-95 are under challenge in this writ petition. The facts of the case briefly stated are as follows : The petitioner, CESC Ltd., filed income-tax returns under Section 139 of the Income-tax Act, 1961, claiming deduction on account of appropriation to contingency reserve. On this basis returns were filed for the assessment years 1990-91, 1992-93, 1993-94, 1994-95 and 1995-96. The Assessing Officer duly accepted the returns and issued intimation under Section 143(1)(a) up to' the assessment year 1994-95 issuing refund orders from time to time from out of the tax deducted at source because in each of the aforesaid years the assessee had suffered losses. Besides that there was carry forward loss. In respect of each of the aforesaid assessment years notices under Section 143(2) of the Income-tax Act were issued and regular assessment under Section 143(3) of the Income-tax Act disallowing the appropriation to contingency reserve was made for the assessment years 1990-91 and 1992-93 against which appeals preferred by the petitioner are pending. In respect of the assessment year 1993-94 notice under Section 143(2) of the Income-tax Act (hereinafter referred to as "the Act") was issued on December 20, 1994, and in respect of the assessment year 1994-95 the notice under Section 143(2) of the Act was issued on November 27, 1995. The regular assessment in respect of the aforesaid two years is however pending. In respect of the aforesaid four several assessment years notices under Section 154 of the Act were issued during the period between March 19, 1996 and March 22, 1996. Each of the aforesaid notices is issued on the same ground and is backed by a covering letter containing identical matter. It would be enough to read one of those notices and the concerned covering letter.
(2.) The notice appearing at page 146 of the petition being part of annexure O reads as follows: "The assessment order under Section 143(1)(a) for the assessment year 1994-95 made on March 2, 1995, requires to be amended as there is a mistake apparent from the record within the meaning of Section 154 of the Income-tax Act, 1961. The rectification of the mistake, as per particulars given below, will have the effect of enhancing the assessment/reducing the refund/increasing your liability. If you wish to be heard, you are requested to appear in person or through an authorised representative in my office on March 26, 1996, at 11 a.m. Alternatively, you may send a written reply so as to reach me on or before the date mentioned above. Particulars of mistake proposed to be rectified. As per letter dated March 18, 1996."
(3.) The letter dated March 18, 1996, reads as follows : "Return was filed by you on November 30, 1994, disclosing loss of Rs. 3,63,26,49,520 which was subsequently processed under Section 143(1)(a) on March 2,1995. A perusal of the computation of income, inter alia, revealed that the assessee-company has claimed deduction amounting to Rs.2,18,21,014 on account of appropriation to contingency reserve account. Such deduction has been claimed on the basis of the submission that deduction is allowable on the basis of certain appeal/reference before the appellate authorities and the High Courts. The apex court in the case of Associated Power Co. Ltd. v. CIT [1996] 218 ITR 195, has held that such deduction is not allowable business expenditure. Since the judgment passed by the apex court has laid to rest any controversy on this issue, therefore, there is no question of doubt or debate involved any more. In view of the cited decision as above, I therefore propose to rectify the intimation under Section 143(1)(a) dated March 2, 1995, under Section 154(1)(b). In this connection you are requested to show cause to the undersigned by March 26, 1996, as to why the proposed action should not be taken.";