Honble SINHA, J.–Leave granted.

(2). Interpretation of sub-section (3) of Section 226 of the Income Tax Act, 1961 (Act) is involved in these appeals which arises out of a judgment and order dated 27-8-2004 passed by the High Court of Judicature of Andhra Pradesh at Hyderabad in Writ Petition No.2305 of 2002 whereby and whereunder the writ petition filed by B.M. Malani (hereafter referred to as the respondent) was allowed in part.

(3). Respondent is an assessee of income tax. He was admittedly a defaulter in payment of income-tax. He had invested an amount of 65 lacs in the Monthly Income Plan (III) offered by the Unit Trust of India under Capital Gains Scheme, the predecessor in interest of the petitioner in the year 1998 with an object to seek exemption under Section 84-E of the Act. The `Highlights projected for such an offer were as under :

"A five year close ended income plan

The plan offers three options 1) Monthly Income Option, 2) Annual Income Option & 3) Cumulative Option

The face value of a unit is Rs.10/- and units will be sold at par.

The Trust shall pay an assured income @ 12.50% p.a. payable monthly under monthly income option and @ 13.25% p.a. payable annually under annual

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