MITTAL COAL ENTERPRISES Vs. ASSISTANT CIT

JUDGEMENT

(1.) THE petitioner was assessed to tax by an assessment order dated September 30, 1997 (block assessment), under Section 158BC of the Income-tax Act, 1961, (for short "the Act"). As a result of that assessment, a demand of Rs. 4,56,20,628 had fallen due against the petitioner. It is not disputed that the assessment order is not the subject-matter of challenge in this writ petition, against which an appeal has been preferred and is pending adjudication before the Income-tax Appellate Tribunal at Delhi.

(2.) THE challenge before this court was confined to the notice dated November 6, 1997, issued under Section 226(3) of the Act addressed to Synthetics and Chemicals Ltd., Bareilly. THE impugned notice, inter alia, recites that the block assessment under Section 158BC read with Section 158BD of the Act has been made on September 30, 1997, in the case of the petitioner and the demand of income-tax was created at Rs. 4,56,20,628. THE notice of demand has been duly served upon the petitioner on October 4, 1997. Thus the demand of income-tax was payable on November 4, 1997, after the expiry of 30 days from the service of notice of demand. Paragraphs 2 and 3 of that notice read as under :

(3.) WE have considered these submissions carefully, but no case for interference has been made out. In the application dated November 7, 1997, addressed to the Commissioner of Income-tax, Central, Kanpur (annex-ure-6 to the writ petition), it is averred, inter alia, that the notice under Section 226(3) be withdrawn because an entity, called Goodluck Coal Company in its application dated October 4, 1996, filed under Section 245D of the Act before the Settlement Commission had owned all the transactions of the petitioner with Synthetics and Chemicals Ltd., Bareilly, and that application has been admitted by an order dated April 30, 1997, of the Settlement Commission. Further, the amount of Rs. 32,16,966 outstanding in the account books of Synthetics and Chemicals Ltd., as due to the petitioner belongs to Goodluck Coal Company. Thus, the same cannot be recovered against the demand due from the petitioner, i.e., Mittal Coal Enterprises.