TMI Blog2004 (4) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 143(1) in respect of assessment years 1998-99,1999-2000 and 2000-2001 while such deductions were disallowed in respect of assessment years 1995-96 and 1997-98 which were deleted in the appeal proceedings. Subsequently, it appears from the assessment order for assessment year 1998-99 that Office of the Accountant General, UP, pointed out that such deduction was not allowable in view of the CBDT instruction No. 1774 dated14-10-1997. Accordingly, directions were issued from the Office of the Additional Commissioner of Income-tax, Dehradun vide letter dated1-2-2001to the Assessing Officer for taking necessary action for re-opening the assessment. Accordingly, the notices under section 148 were issued to the assessee in respect of all these assessment years. Thereafter, after giving opportunity to the assessee, the deduction claimed by the assessee against incentive bonus was disallowed for all these years under consideration. All the orders of the Assessing Officer were upheld by the CIT(A). Aggrieved by the same, the assessee is in appeal before the Tribunal. 3. The learned counsel for the assessee has assailed the orders of the CIT(A) by raising two contentions. The first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion. The judgment of apex court in the case of Indian and Eastern Newspaper Society, 119 ITR 996 was based on the interpretation of the word "information" as appearing in section 147(b) prior to amendment. The apex court held that audit objection on interpretation of a provision did not amount to information within the ambit of section 147(b) and, therefore, the assessment could not be re-opened on such audit objection. This judgment was followed by their Lordships in the case of Lucas TVS Ltd. The Gujarat High Court judgment in Kaira District Cooperative Milk Producers Union Ltd.'s case is not on the point before us. However, it is mentioned that the said judgment also considered the old provisions of section 147(a). The judgment of the Supreme Court in the case of P.V.S. Beedis (P.) Ltd. relied upon by the learned DR is also not on the point before us since it was also delivered in the light of old provisions under section 147(b) wherein it was held that audit note regarding factual error constitute 'information' under section 147(b). Therefore, neither of the judgments relied by the parties before us is on the issue before us. We are concerned about the provisions of section 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue whether deduction can be allowed against the incentive bonus received by the Development Officer employed with an insurance company. Majority of the High Courts i.e. High Courts of Punjab Haryana, Rajasthan, Orissa, Andhra Pradesh,MadrasandBombayhave taken the view that such incentive is part of salary and therefore, no deduction can be allowed against such incentive except standard deduction. On the other hand, Gujarat High Court has dissented from such view by holding that profits in lieu of salary under section 17 would include net profits and not the gross receipts and, therefore, assessee is entitled to deduction on account of expenditure in earning of such incentive. Various benches of the Tribunal in the past had also accepted such stand of the assessee and the High Court had refused to interfere with the finding given by the Tribunal. The issue is still pending before the Supreme Court and there is no judgment of Allahabad High Court which is the jurisdictional High Court in the case of the assessee. Hence, there was no finality of the issue as far as the present assessee is concerned. 8. So the question arises whether income can be said to be escaped assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the above observations clearly shows that there must be an error in the order of assessment for the purpose of re-opening under section 147(b). If the order of the Assessing Officer is in accordance with one of the two methods available to the Assessing Officer then it cannot be said that the order of Assessing Officer was erroneous and accordingly, such assessment could not be re-opened merely on the ground that the other method was advantageous to the revenue. 9. The other judgment of the Hon'ble Supreme Court is in the case of CIT v. G.M. Mittal Stainless Steel (P.) Ltd. [2003] 263 ITR 255 wherein it was held that where the Assessing Officer passed an order in accordance with decision of High Court, then such order could not be considered as erroneous for the purpose of assumption of jurisdiction under section 263 even though such decision of the High Court has been reversed subsequently by the Supreme Court. Similarly, in the case of Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83, their Lordships of Supreme Court held that CIT could not assume jurisdiction under section 263 where the order of assessment passed by the Assessing Officer was in accordance with one of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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