D.K.Seth, J. - (1.) The appellants filed Writ Petn. No. 714 of 1996 challenging the notices issued under Section 154 of the IT Act, 1961 (the Act), seeking to rectify summary assessment made under Section 143(1)(a) of the Act for the asst. yrs. 1990-91, 1992-93, 1993-94 and 1994-95. In the writ petition, the assessment for the year 1995-96 under Section 143(l)(a) of the Act was also challenged. The petitioner had claimed allowable deduction in respect of the contingency reserve fund in the respective returns. Upto the asst. yr. 1994-95, the returns were accepted, allowing deduction in respect of the appropriation to contingency reserve fund and intimation under Section 143(1)(a) was issued. Subsequently, notice under Section 143(2) was issued. Regular assessment under Section 143(3) was completed disallowing the appropriation to contingency reserve for the asst. yrs. 1990-91 and 1992-93. Whereas regular assessment in respect of the asst. yrs. 1993-94 and 1994-95, pursuant to the notice under Section 143(2) was pending. In respect of each of these four assessment years, notices under Section 154 of the Act were also issued. So far as the asst. yr. 1995-96 is concerned, in the assessment under Section 143(1)(a), the appropriation to contingency reserve was disallowed without the aid of Sections 143(2) and 143(3) or Section 154. In the writ petition, the appellants had prayed for the relief in respect of the asst. yr. 1995-96 as well along with the other four assessment years in relation to which the issuance of the notices under Section 154 was challenged as without jurisdiction. The learned single Judge by the decision dt. 22nd April, 2003 [reported as C.E.S.C Ltd. and Anr. v. Dy. CIT, was pleased to grant relief to the appellants in respect of the asst. yrs. 1990-91, 1992-93, 1993-94 and 1994-95 by quashing the respective notices under Section 154, seeking to rectify the intimation under Section 143(1)(a), while permitting the process of regular assessment under Section 143(3) in respect of the asst. yrs. 1993-94 and 1994-95 and the appeal in respect of the asst. yrs. 1990-91 and 1992-93. No relief, however, was allowed in respect of the asst.yr. 1995-96.
(2.) The appellants preferred this appeal against the said judgment dt. 22nd April, 2003, passed in writ petition No. 714 of 1996, so far as it omitted to decide the question of adjustment made under Section 143(1)(a) of the Act in respect of the asst. yr. 1995-96 since intimated under Section 143(1)(a) on 18th March, 1996, Admittedly, this appropriation to contingency fund was disallowed in view of the decision in Associated Power Co. Ltd. v. CIT. The main contention of Dr. Debiprosad Pal, senior counsel, appearing on behalf of the appellants, was that the assessment is to be made on the basis of the law applicable on the date of filing the return. In the assessment intimated under Section 143(1)(a) while disallowing the appropriation to contingency reserve, the AO had made an addition under Section 143(1)(a), which is penal in nature and cannot be imposed when the return at the time of filing was not false or incorrect. According to him, though the decision in the case of Associated Power Co. Ltd. (supra) was rendered on 28th Nov., 1995, it was not available or known to the appellant until this decision was published in Taxman on 27th Jan., (1996) 84 Taxman 355 (SC)], whereas the return was submitted on 30th Nov., 1995, when it was not possible for the assessee to have any information with regard to the decision. Therefore, on 30th Nov., 1995, the return was filed by the assessee in accordance with the law applicable on that date. Therefore, the intimation under Section 143(1)(a) is without jurisdiction.
(3.) This contention was sought to be resisted by Mr. S.K. Kapoor, Addl. Solicitor General, appearing for the respondents, that the law as it stood on 30th Nov., 1995, was the law laid down in Associated Power Co. Ltd. (supra). It is immaterial as to when it is published or when it came to the knowledge of a particular assessee. The law declared becomes enforceable on the day as soon as declared by the Court. It is not dependent on the knowledge or information of a particular assessee. He, secondly contends that the assessment is subject to appeal. The assessment made cannot be said to be without jurisdiction. Therefore, the writ is not maintainable.;