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2016 (10) TMI 99 - HC - Income TaxRevision u/s 263 - whether industrial undertakings of the assessee were eligible for deduction under Sections 80HH and 80I ? - Held that:- For multiple reasons the notice for revision cannot be sustained. As noted, the issue in the past had traveled through various stages and ultimately, before the High Court also the question in case of this assessee came to be settled. Such issue was examined by the High Court concerning earlier assessment year. The question considered by the High Court was whether the Tribunal was right in holding that the assessee which was engaged in the business of bidi was entitled to deduction under Section 80HH and 80I of the Act. By dismissing Revenue's appeal and confirming the decision of the Tribunal by a judgement dated 28.11.2005, Division Bench of the High Court rejected such a question on the ground that in case of this very assessee for the earlier assessment year 1989- 90, the Revenue has accepted the Tribunal's decision on this point. Tribunal discarded assessee's contention that having been registered as small scale industrial unit, the assessee fulfilled the requirement of being an industrial undertaking. Having done that, we find it somewhat incongruent whether the Tribunal directed the Assessing Officer to examine whether the unit was an industrial undertaking and also to examine whether it was registered. In plain terms, therefore, the second requirement imposed by the Tribunal was not germane. The third condition of the unit satisfying other requirements has been duly recorded by the Assessing Officer in the order of assessment. Even the Commissioner in the impugned notice has not objected to non-fulfillment of this requirement. This leaves us with the first requirement cast by the Tribunal viz. of the unit being an industrial undertaking. We have proceeded on the basis that in the process, the Tribunal desired that the Assessing Officer should verify whether the assessee itself is carrying on manufacturing activity. In this context, the Assessing Officer referred to the materials on record including the decision of the High Court in case of Prabhudas Kishordas Tobacco Products P. Ltd. (2006 (1) TMI 68 - GUJARAT High Court ) in which, under similar circumstances, the Revenue's contention that the assessee did not carry on itself the activity came-up for consideration.It can thus be seen that the decision of the Assessing Officer upon remand by the Tribunal was based on materials on record and the law laid down by the High Court in similar cases. Under the circumstances, the Commissioner's both the objections to the exercise of assessment carried out by the Assessing Office must fail. The Assessing Officer had not relied merely on the certificate of registration of the industry to come to the conclusion that the assessee was an industrial undertaking. The Commissioner's objection that the Assessing Officer did not verify the registration of the industrial unit was equally erroneous. We have already noted that the Tribunal's insistence on such verification itself was contrary to the documents on record and, in any case, it is not even the case of the Revenue that the units were not registered. Before concluding, we may deal with the Revenue's preliminary objection to the High Court entertaining a writ petition at show cause notice stage. Firstly, the petition was admitted long back. We would not therefore, summarily dismiss the same without examination of merits of the case. Secondly, we find that the Commissioner had recorded completely impermissible and erroneous reasons to assume jurisdiction for taking the order of assessment in revision. Under the circumstances, the fact that the petitioner had approached at the stage of show-cause notice would not preclude us from striking down the same. -Decided in favour of assessee.
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