TMI Blog2009 (1) TMI 871X X X X Extracts X X X X X X X X Extracts X X X X ..... , the learned CIT(A) has failed to appreciate that in the instant case, in the course of the proceedings, (before reopening assessment) the claim relating to the deduction under s. 80HHC was examined and duly allowed as no prima facie adjustment was made and as such, the assessment could not have been reopened on the mere change of opinion. (3) That in any case and without prejudice, the deduction claimed under s. 80HHC had rightly been allowed since there was no dispute that the assessee had earned an income and had made exports. (4) That the learned CIT(A) has failed to appreciate that the assessment had been reopened on the basis of an audit objection, which was insufficient and was not valid and proper for the purpose of initiation of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act on 18th Sept., 1996 at the returned income. The AO noticed that the assessee company had claimed bad debt amounting to ₹ 49,03,035 during the asst. yr. 1997-98. This amount included the unrealized export sales of ₹ 47,29,255, which pertained to the assessment year under appeal. On the basis of this information, the AO concluded that claim of deduction under s. 80HHC of the Act for the year under appeal has wrongly been claimed and allowed to the assessee. Accordingly, the case was reopened under s. 147 of the Act. On appeal, the assessee challenged this initiation of proceedings against it under s. 148 of the Act and passing of the order in pursuance of this notice by the AO. He contended before the CIT(A) that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant that there was no new material with the AO to come to the conclusion that income has escaped assessment for asst. yr. 1995-96 cannot be accepted in view of the fact that the appellant had itself written off the amount and claimed the same as bad debt during the asst. yr. 1997-98. This information was sufficient to come to the conclusion that excess claim under s. 80HHC has been made for asst. yr. 1995-96 and, therefore, income of that year has escaped assessment. Therefore, keeping in view the above discussion, it is held that the AO was justified in issuing the notice under s. 148. Thus, ground Nos. 2 and 3 are rejected. Before us, the main thrust of arguments of the learned Authorised Representative for the assessee in chall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the proposition that proceedings under s. 154 are proceedings of assessment. A reference is then made to the judgment of Hon ble Madras High Court in the case of CIT vs. E.I.D. Parry Ltd. (1995) 216 ITR 489 (Mad) in support of the contention that if the AO takes recourse to one of the sections, i.e., s. 147 or s. 154, and gives up later, the recourse to another is inappropriate. Learned counsel then refers to the judgment of Hon ble Gujarat High Court in the case of Damodar H. Shah vs. Asstt. CIT (2000) 163 CTR (Guj) 1 : (2000) 245 ITR 774 (Guj) to suggest that if no mistakes are found and proceedings under s. 154 are dropped, issue of notice under s. 147 on the basis of the same material is not valid. Learned counsel submits that income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration to the rival contentions as also the applicable legal position, we find that the plea of the learned counsel is indeed sustainable in law and merits acceptance. In the case of Trustees of H.E.H. The Nizam s Supplemental Family Trust vs. CIT (supra), Hon ble Supreme Court has held that unless the assessment proceedings are completed, there cannot be any question of income escaping assessment. In the case of CIT vs. Anderson Marine Sons (P) Ltd. (2004) 189 CTR (Bom) 118 : (2004) 266 ITR 694 (Bom), Hon ble Bombay High Court has held that the intimation under s. 143(1)(a) is also an assessment. The fact that the intimation so issued by the AO is subject to the rectification proceedings initiated by the AO himself only indicates t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e us, learned Departmental Representative for the Revenue could not cite any case law wherein a view contrary to the view taken in the case (supra) by the Tribunal has been taken. Learned Departmental Representative also could not controvert the factual submissions of the learned Authorised Representative for the assessee i.e., that in the case under consideration, the rectification proceedings under s. 154 of the Act were initiated against the assessee and the same were not concluded and almost on the same basis during the pendency of rectification proceedings the AO resorted to the assessment proceedings under s. 147 of the Act by issuing notice under s. 148 of the Act. Learned Departmental Representative for the Revenue also failed to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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