TMI Blog2004 (11) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... ment and export of computer software. The AO noticed that upto the asst. yr. 1999-2000, the company was claiming the deduction under s. 80HHE. For the asst. yr. 2000-01 the return of income was filed declaring nil income on the ground that income computed at Rs. 1,52,65,475 was exempt under s. 10A of the Act. The return was processed under s. 143(1)(a) of the Act. The AO after having recorded the reasons issued the notice under s. 148 on13th Sept., 2002. The AO recorded the reasons that the income of the assessee from computer software under s. 10A of the Act was allowed without examining the same and, therefore, deduction under that section was wrongly allowed. 3. The assessee challenged the validity of notice issued under s. 148 of the Act before the first appellate authority. The assessee contended that it had declared the income correctly and, therefore, there was no question of escapement of income in that particular case. This was only a case of change of opinion on the part of the AO and despite requests the AO did not furnish the reason for reopening the assessment. The learned CIT(A) observed that on perusal of the assessment record it would appear that the reasons for i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e) of s. 114 of Indian Evidence Act, 1872, judicial and official acts have been regularly performed. If it be held that an order which has been passed purportedly without application of mind that would itself confer jurisdiction upon the AO to reopen the proceeding without anything further; the same would amount to giving a premium to an authority exercising quasi-judicial function to take benefits of its own wrong. Hence, it is clear that s. 147 of the Act does not postulate conferment of power upon the AO to initiate the reassessment proceedings upon a mere change of opinion. 6. Thus, it would appear that according to the Hon ble jurisdictional High Court an order of assessment would be passed either in terms of sub-s. (1) of s. 143 or sub-s. (3) of s. 143 of the Act. Hence, it is only when an order under s. 143(3) has been passed, the presumption could be raised that order has been passed on an application of mind. An opinion can be said to be formed only when there is application of mind with reference to material on record and relevant provisions of statute and, therefore, if in earlier proceeding, no such opinion is formed and there is escapement of income, then it cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved that for the benefit envisaged under s. 10A, he has to file declaration to this effect along with the return of income before due date of filing the return for first assessment year. In this connection he has referred to s. 10A(8) of the Act. He further mentioned that the intention of the legislature is to enable the assessee to choose one mode for claiming the exemption/reduction out of profits on export of computer software. Thus, he has held that the assessee is not entitled to exemption under s. 10A of the Act, in respect of profit (on) export of computer software amounting to Rs. 1,52,65,474. He has further held that exemption under s. 80HHE is also denied to the assessee as there is no claim under s. 80HHE and the assessee had also not complied with the relevant provisions of s. 80HHE of the Act. 9. On appeal, the learned CIT(A) while referring to the provisions contained in sub-s. (5) of s. 80HHE has observed that the expression such profits in sub-s. (5) can only refer to profits of the nature specified in sub-s. (1). Otherwise, reading the provisions with the definition of "previous year" in s. 3 and assessment year in cl. (9) of s. 2, no other interpretation wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the said provisions would not disentitle the assessee in claiming deduction under s. 10A of the Act, since the assessee had not filed any such declaration under s. 10A(8). He has further submitted that s. 80HHE(5) prohibits double deduction. In other words, deduction which has been claimed in respect of a given profit, cannot be a subject-matter of another deduction in the previous year or any other year. In the instant case, the deduction has been claimed in respect of profits of different assessment years and, therefore, same profit has not been the subject-matter of more than one deduction for the same or any other assessment year. 12. As regards the alternative claim of deduction under s. 80HHE, he has submitted that the assessee made the claim under s. 80HHE vide letter dt.18th March, 2003. However, the said plea was ignored inasmuch as the impugned assessment order was passed back-dated on14th March, 2003, without considering the plea of the assessee. 13. On the other hand, the learned Departmental Representative made reliance upon the orders passed by tax authorities. 14. We have heard the parties with reference to material on record and precedents referred. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uccessive years. The principle of estoppel is not applicable in tax proceedings to the successive assessment as has also been laid down by the Hon ble High Court of Delhi in CWT vs. Meatless (P) Ltd. (1984) 43 CTR (Del) 281 : (1985) 156 ITR 569 (Del) and also by Gujarat High Court in Anant Mills Ltd. vs. CIT (1993) 109 CTR (Guj) 231 : (1994) 206 ITR 582 (Guj) and Bombay High Court in Kantilal Chimanlal Shah vs. CIT (1954) 26 ITR 303 (Bom). 16. Since the appellant in the past claimed deduction under s. 80HHE of the Act, we consider it imperative to examine the provisions contained under that section also. Sub-s. (5) of s. 80HHE is relevant to examine this aspect. This sub-section reads as under: "Where a deduction under this section is claimed and allowed in respect of profits of the business referred to in sub-s. (1) for any assessment year, no deduction shall be allowed in relation to such profits under any other provision of this Act for the same or any other assessment year." The expression "such profits" used in this sub-section refers to those profits for a particular assessment year, for which a deduction under s. 80HHE is claimed and allowed. Sub-s. (5) of s. 80HHE was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear in respect of profits which have already been a subject-matter of deduction computed under s. 80HHE of the Act. 19. Upon a harmonious reading of the entire provision, our considered view, therefore, is that the expression "such profits" as appearing in sub-s. (5) refers to the profits of a particular assessment year and the section does not place restriction to shift for the claim of deduction or exemption under any other provision in respect of profits for which no deduction has been claimed and allowed in the previous year. Since both the sections, i.e., s. 80HHE and s. 10A entitle the benefit, the assessee would legitimately be entitled to the benefit of that provision of law which enables a larger benefit being earned by him. This finds support from the decision of the Supreme Court in Collector of Central Excise vs. Indian Petro Chemicals (1997) 11 SCC 318 and also by the Hon ble High Court of judicature atDelhiin the case of C.S. Mathur vs. CBDT. We, therefore, do not find any justification in the action of the learned CIT(A) to uphold that the assessee being an old unit and once having claimed deduction under s. 80HHE was not entitled to claim exemption under s. 10A fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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