TMI Blog1993 (7) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... 5(1)(ii) for the assessment year in question. It has further been stated that the approval allowed to the research centre had been withdrawn with retrospective effect from January 17, 1980, by the Government of India by a notification dated January 2, 1986, and that the benefit had been allowed wrongly to the petitioner-company in the assessment for the assessment year by the Inspecting Assistant Commissioner. The petitioner has contended that the basis of the notices is invalid as there could be no retrospective cancellation of approval. Reliance has been placed on the decision of a learned single judge of the Bombay High Court in Seksaria Biswan Sugar Factory Ltd. v. IAC [1990] 184 ITR 123 in this connection, ITO v. M. C. Ponnoose [1970 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner to the benefit of deduction under section 35 of the Act. Section 35(1)(ii) reads as follows: "35. (1) In respect of expenditure on scientific research, the following deductions shall be allowed,-. . . (ii) any sum paid to a scientific research association which has as its object the undertaking of scientific research or to a university, college or other institution to be used for scientific research : Provided that such association, university, college or institution is for the time being approved for the purposes of this clause by the prescribed authority." The notification dated August 20, 1981, reads as follows : "No. 4185 (F. No. 203/134/79-ITA.II) : In continuation of this office Notification No. 2739 (F. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here any rule or regulation is made by any person or authority to whom such powers have been delegated by the Legislature, it may or may not be possible to make the same so as to give retrospective operation. It will depend on the language employed in the statutory provision which may, in express terms or by necessary implication, empower the authority concerned to make a rule or regulation with retrospective effect. But where no such language is to be found, it has been held by the courts that the person or authority exercising subordinate legislative functions cannot make a rule, regulation or bye-law which can operate with retrospective effect. " It may be mentioned that the courts are even wary to interpret a statute as conferring pow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remedy by appearing before the Commissioner does not appear to be sound. The Commissioner would not be able to determine the legality and validity of the notification dated January 2, 1986, by which the approval granted to the research centre was withdrawn. In any event, the matter has been pending before this court for close on six years. The court entertained the writ petition and issued a rule and passed an interim order. At this stage, after the affidavits had been completed, this court should not, in my view, direct the petitioner to avail of the statutory remedy, if any. There could be no quarrel with the proposition that the court exercising jurisdiction under article 226 will interfere with the issuance of a notice under section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to the very same research centre. The deduction was allowed as the research centre was enjoying the approval of the prescribed authority at that time. The approval was subsequently rescinded. A notice was issued by the Income-tax Officer under sections 147(b) and 148 seeking to reassess the assessee on the ground that the deduction had been wrongly allowed. The Bombay High Court held that : "It has to be held that the information in the form of retrospective cancellation of the approval of the concerned institution as an agricultural institute within the meaning of section 35(1)(ii) by notification dated January 2, 1986, was apparently invalid and unreliable. The formation of belief that income chargeable to tax had escaped assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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