Circular No. 5/2003 — Tax on income from manufacture of Rubber and Coffee - Clarification regarding reassessment

What this is

Circular No. 5/2003 was issued by the Central Board of Direct Taxes on 22 May 2003. Its subject is Tax on income from manufacture of Rubber and Coffee - Clarification regarding reassessment of income for the assessment years prior to assessment year 2002-03.

This amends the Income-tax Rules. What it changes is the Rules, not the Act — and a rule can never take away what the section gives.

What it does

Directs that no proceedings under section 147 or section 263 are to be initiated for assessment years before assessment year 2002-03 in the case of assessees earning income from manufacture of rubber or coffee, to bring such income to income-tax, where the assessee had already paid agricultural income-tax on the whole of that income. It records that rules 7A and 7B, inserted by the Income-tax (Second Amendment) Rules, 2001 with effect from 1-4-2002, provide that such income is computed as if it were business income and a specified percentage of it is deemed liable to tax.

Why it was issued

Representations were received asking whether section 147 or section 263 proceedings could be taken for years before assessment year 2002-03 to bring such income to tax even though agricultural income-tax had already been paid on it.

Who it reaches

Rubber manufacturers and coffee growers and curers
Assessees who had paid State agricultural income-tax on the whole of that income
Assessing Officers considering reopening under section 147
Commissioners considering revision under section 263

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.147	s.279
s.263	s.377

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

Tax on income from manufacture of Rubber and Coffee - Clarification regarding reassessment of income for the assessment years prior to assessment year 2002-03
1. Rules 7A and 7B of the Income-tax Rules, 1962 inserted by the Income-tax (Second Amendment) Rules, 2001 w.e.f. 1-4-2002 provide that income from manufacture of rubber and coffee, as mentioned therein, shall be computed as if it were income derived from business and a specified percentage of such income shall be deemed to be income liable to tax.
2. Representations have been received in the Board seeking clarification as to whether proceedings under section 147 or under section 263 of the Income-tax Act, 1961 can be initiated for the assessment year(s) prior to the assessment year 2002-03 to determine the income liable to income-tax, even if the assessees had already paid agricultural income-tax on such income.
3. The Board have considered the matter and it is clarified that no proceedings under section 147 or under section 263 of the Income-tax Act, 1961 should be initiated for the assessment year(s) prior to the assessment year 2002-03 in the cases of assessees earning income from manufacture of rubber and/or coffee, for determining the income liable to income-tax, if the assessees had already paid agricultural income-tax on the whole of such income.
Circular : No. 5/2003, dated 22-5-2003.

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What to watch

The protection is conditional: agricultural income-tax must have been paid on the whole of the income, not part of it.
It reaches back only - years from assessment year 2002-03 onwards are governed by rules 7A and 7B on their own terms.
It bars the initiation of reopening or revision for the earlier years; the earlier years it speaks of are now long closed in any event.

Where you meet it

In a notice under section 147 or a show cause under section 263 on a plantation assessee's pre-2002-03 assessments.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Notification No. 75/2026 [F. No. 275/18/2026-IT(B)] / SO 3610(E) : TDS Exemption on Ship Lease Payments to IFSC Units — 4 the Gazette of INDIA : Extraordinary [Part Ii—sec. 3(ii)] 3 July 2026
Notification No. 74/2026 [F. No. 275/16/2026-IT(B)] / SO 3609(E) : TDS Exemption on Aircraft Lease Payments to IFSC Units — 4 the Gazette of INDIA : Extraordinary [Part Ii—sec. 3(ii)] 3 July 2026
Notification No. 18/2022 [F. No. 370142/16/2022-TPL(Part1] / SO 1466(E) — Ministry of Finance 29 March 2022
Circular No. 11 — 11 dated 23 7 2001 23 July 2001
Circular No. 432 — Clarifications on issues relating to effect of filing higher estimates of income for advance tax purposes on assessment 20 September 1985
Circular No. 423 — Clarifications on issues relating to effect of filing higher estimates of income for advance tax purposes on assessment 26 June 1985

← Circular No. 6/2003 · Circular No. 4/2003 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.