2006 (3) TMI 210 - ITAT CHANDIGARH-A

Deductions u/s 80-IB - whether the breaking of boulders into stones i.e., 'gitty' is a industrial undertaking manufacturing and producing article or thing or not - Prayer to quash the assessment order passed u/s 143(3)/147 - change of opinion - HELD THAT:- In our considered view, the Assessing Officer while processing the return, is not supposed to express any opinion, but only an intimation is to be sent to the assessee specifying if any tax or interest is due on the basis of such return after adjustment of any tax deducted at source/advance tax paid/tax paid on self-assessment and any amount paid otherwise by way of tax or interest. In other words, the Assessing Officer initially process the return u/s 143(1)(a) and determine the amount payable or refundable on that basis and it is not necessary for him to frame an assessment in each and every case.

In the present case, the Assessing Officer was of the opinion that the deduction claimed by the assessee u/s 80-IB was excessive. The Assessing Officer, on the basis of judgment in the case of Gem India Mfg. Co.[2000 (12) TMI 7 - SUPREME COURT] recorded his satisfaction that the activity of the assessee in breaking the boulders into small stones was not manufacturing activity. Therefore, he has reasons to believe that the deduction claimed by the assessee was not correct. As such, a part of his income chargeable to income-tax has escaped assessment. In our opinion, in view of the ratio laid down by the Hon'ble jurisdictional High Court in the aforesaid referred to case i.e., the case of Swaraj Engine Ltd.[2002 (8) TMI 27 - PUNJAB AND HARYANA HIGH COURT], the Assessing Officer rightly started the reassessment proceedings. Thus, we set aside the order of the learned CIT (Appeals) and accordingly, this ground of the departmental appeal is allowed.

In the result, appeals of the department are allowed.