MADURA COATS Vs. DEPUTY COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE petitioner seeks for a writ of declaration declaring Circular No. F. No. 200/79/2000-ITA. 1, dated 23. 1. 2001 issued by the second respondent as invalid.

(2.) PETITIONER is a Public Limited Company mainly engaged in the manufacture and sale of sewing threads and industrial fabrics. For the previous year ended 31st March 1996, the petitioner filed return of income on 29. 11. 1996 admitting a loss of Rs. 26,47,02,780/ -. The return was processed under section 143 (1) (a)of the Income Tax Act on 13. 5. 1997. Notice under section 143 (2) of the Act was issued on 27. 11. 1997 calling upon on the petitioner to furnish various details for the purpose of completing the assessment. After the details were furnished, assessment was completed under section 143 (3) of the Act on 31. 3. 1999.

(3.) SUBSEQUENTLY, the first respondent had issued a notice on 22. 3. 2003 for reopening the completed assessment under section 148 of the Act. One of the grounds for reopening is the allowability of the amounts paid by the petitioner to its employees under Voluntary Retirement Scheme (VRS) by relying on the Circular dated 23. 01. 2001 issued by the Central Board of Direct Taxes.