BHARAT VIJAY MILLS LIMITED Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) : Since a common question arises in both these petitions as to what is the true construction and effect of benevolent circulars issued by the CBDT under s. 119 of the IT Act, 1961, in the matter of development rebate so as to overcome the difficulties experienced by the assessees pursuant to the decision of this Court in Surat Textile Mills Ltd. vs. CIT (1971) 80 ITR 1 (Guj), we think it fit to dispose of both these petitions by this common judgment.

(2.) WE may briefly state the relevant facts in these two petitions so as to appreciate the reliefs claimed by the respective petitioners.

(3.) IT should be recalled at this stage that the aforesaid appeal of the Department reached for final hearing before the Tribunal somewhere in May, 1975, and by its order of May 31, 1975, the appeal of the Department was allowed in view of the decision of this Court in Surat Textile Mills' case (supra). IT appears that the Board issued yet another circular bearing reference No. 228/8/72, dated January 30, 1976, reiterating the position as clarified in December, 1975 circular. IT further appears that the petitioner company represented to the CBDT by their letter of October 6, 1977, claiming development rebate. Unfortunately, however, the Board rejected this representation by its letter of December 29, 1977. The petitioner, therefore, again by their letter of February 9, 1978, wrote to the ITO claiming necessary reliefs in the matter of development rebate under s. 154 of the IT Act in view of the circulars of December, 1975, and January, 1976. The ITO, however, by his order of August 5, 1978, rejected this application for rectification. The assessee company, therefore, carried the matter again in appeal to the CIT (A) which is still pending before the CIT. The petitioner company, however, has moved this Court for appropriate writs, orders and directions for quashing and setting aside the order of the ITO refusing rectification of the order dated July 25, 1975, by his order dated August, 5, 1978, and for directions enjoining the respondents to allow the full development rebate of Rs. 2,75,410.