( 1 ) BY this petition under Articles 226 and 227 of the Constitution of India, the petitioner, a private limited investment company, impugnes the legality and validity of the notice dated 7th April, 1999 issued by the Commissioner of Income-tax, Delhi-1 V. respondent No. 2 herein, in exercise of the powers conferred on him by Section 263 of the Income-tax Act, 1961 (for short the Act) to show cause as to why the assessments made by the joint Commissioner of Income-tax (Assessments ). Special Range-VIII, on 24th February 1998 for the assessment years 1987-88,1989-90,1991-92,1992-93,1993-94 and 1994-95 be not set aside and suitable directions for re-doing the same as per law be not issued to the Assessing Officer as in his opinion the said assessment orders are erroneous insofar as they are prejudicial to the interests of the Revenue.

( 2 ) SHORN of unncessary details, the facts material for the purposes of this petition are: The petitioner deals in shares, stocks and securities. In its returns of income for the relevant assessment years the petitioner computed income on sale of certain shares under the head income from capital gains on the plea that these shares were not acquired for the purposes of business of the company but as an investment by the company. The Assessing officer did not agree with the petitioner;treated the receipts from sale of such shares as profits from business and accordingly taxed the same under the head profits and gains of business . The petitioner challenged the said orders. It appears that in the first instance the Income-tax Appellate Tribunal set aside the assessments in respect of some of the years and restored back the same to the Assessing Officer for fresh assessments in accordance with its directions. Subsequently assessments in respect of other years were also set aside by the Commissioner of Income-tax (Appeals with a direction to the Assessing Officer to re-do the same as per the directions of the Tribunal. While re-assessment proceedings were pending, in the year 1997, the Government of India, respondent No. 1 herein, announced a Voluntary Disclosure if Income Scheme, 1997 (herein after referred to as the VDIS ). It. was clarified by the Central Board of Direct Taxes that where an assessment order had been set aside, an assesseecould make a declaration under the VDIS. It is averred that in order to be absolutely certain about its status, the petitioner, through its Chartered Accountants, sought certain clarifications from the Commissioner if income-tax-I, Convener of the VDIS. The Commissioner, vide his letter dated 30th December, 1997, issued the following clarifications:

"the Committe understands that the assesses wants clarifications of the following points: i) Whether in case the assessments pending before the CIT (A)are set aside, the refund could be raised and whether the said refunds would be paid by the Department on behalf of the assessee to VDIS account with regard to the taxes payable under VDIS. In nut-shell the set aside assessments are likely to give rise to refunds and the assessee for these set aside assessments only wants to VDIS declaration and use refunds for the part payment of the VDIS. Whether it is possible? (ii)The balance amount of VDIS could be paid by the assessee i. e. the. amount not covered by the refunds shall be paid by the assessee? The Committee has considered the above two questions and agrees that the refunds can be paid by the department on behalf of the assessee to RB1 account VDIS, account assessee. However, before this, the assesses shall have to file an affidavit that the refunds arising out of set aside assessments shall go towards VDIS. In case, the department is not able to determine the expected amount of refund and is not able to pay the expected amount of refund to RBI towards VDIS, the assessee shall have to pay balance within the stipulated period with interest, -failing which the amount paid shall stand forfeited and declaratio