TMI Blog2010 (1) TMI 934X X X X Extracts X X X X X X X X Extracts X X X X ..... Panda, V. Durga Rao, JJ. Keshav Saxena for the Appellant Vijay Mehta for the Respondent ORDER V Durga Rao: 1. All these appeals filed by the revenue and the cross objections by the assessee are directed against the consolidated order of the CIT(Appeals) dated 6-2-2007 for assessment years 2000-01, 2001-02 and 2003-04. As common points are involved, all these cases were heard together and a consolidated order is being passed for the sake of convenience. 2. ITA No.3009(Mum)/2007 (assessment year 2003-04): The revenue has raised the following ground of appeal: "On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in directing the AO to allow deduction u/s 80HHC without reducing the deduction u/s 80IB of the IT Act." 2(i) Brief facts of the case are that the assessee is engaged in manufacturing bulk drugs and chemicals at its factory in MIDC Tarapure. The assessee claimed deduction u/ss.80IA and 80HHC(1) of the Income-tax Act, 1961 [hereinafter referred to as "the Act"] as a supporting manufacturer on the basis of Disclaimer Certificate issued by M/s.Aarti Drugs Ltd. The AO was of the opinion that deduction u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09,263/- to its sister concern M/s.Aarti Drugs Ltd. The AO was of the opinion that the assessee is not following any consistent or uniform pattern for making commission payment which ranges from 2 to 5% and some times the commission has been paid at a flat rate on the total amount of sale irrespective of quantum of goods sold. So, the AO disallowed Rs.1 lakh out of Rs.23,09,263/-on an estimate basis treating the same as excessive and unreasonable payment of commission to a sister concern u/s 40A(2) of the IT Act. On appeal, the CIT(Appeals) confirmed the addition. Being aggrieved, assessee is in cross objections. 3(ii) The learned counsel for assessee submitted that all the details with regard to payment of commission have been filed before the AO and the AO, without considering the material filed by the assessee, disallowed Rs.1 lakh on estimate basis. On the other hand, learned Departmental Representative supported the orders of the authorities below. 3(iii) We have heard both sides and perused material on record. We are of the opinion that in the interests of justice, the matter should go back to the AO for fresh adjudication. Therefore, we remit the matter to the AO and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,948/- and resulting in short levy of tax of Rs.6.5 lakhs. In response to notice issued by the AO, the assessee explained that the claim made by it is bona fide and invoking of the provisions of section 147 is not warranted. The AO did not agree with the contentions of the assessee. He reopened the assessment and passed re-assessment order. Similarly, for assessment year 2001-02, assessment which was completed u/s 143(3) of the Act, was reopened and re-assessment order passed. 4(ii) The assessee carried the matter in appeal before the CIT(Appeals) before whom it was submitted that the AO has already taken a stand and he cannot invoke re-assessment proceedings to modify his stand which would amount to change of opinion. This is not permissible under the Act. However, the CIT(Appeals) upheld the reopening of assessment by observing that the AO has not considered the issue of allowance of deduction u/s 80HHC and 80IA in the original assessment. 4(iii) Being aggrieved, assessee is in cross objections for assessment years 2000-01 and 2001-02. Learned counsel for assessee submitted that the original assessment was made u/s 143(3) of the Act. The assessee had submitted all the det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a regular order of assessment is passed in terms of the said sub-s. (3) of s. 143, a presumption can be raised that such an order has been passed on application of mind. It is well known that a presumption can also be raised to the effect that in terms of cl. (e) of s. 114 of the Indian Evidence Act, judicial and official acts have been regularly performed. If it be held that an order which has been passed purportedly without application of mind 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 benefit of its own wrong." 9. It is clear from the observations made above that the Full Bench of the Delhi High Court has taken a view that in a situation where according to the AO he failed to apply his mind to the relevant material in making the assessment order, he cannot take advantage of his own wrong and reopen the assessment by taking recourse to the provisions of s. 147. We find ourself in respectful agreement with the view taken by the Full Bench of the Delhi High Court. 10. It is further to be seen that the legislature has not c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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