TMI Blog2002 (10) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... an assessee in connection with challenging the validity of notice issued under section 148 of the Act could not be disallowed under section 80VV of the Act. No contrary view by any High Court has been brought to our notice by learned counsel for the Revenue. - In the result, the question referred is answered in the negative, i.e., in favour of the assessee and against the Revenue. - - - - - Dated:- 10-10-2002 - Judge(s) : D. K. JAIN., MS. SHARDA AGGARWAL. JUDGMENT The judgment of the court was delivered by D.K. JAIN J.-In these two references, at the instance of the Revenue, the Income-tax Appellate Tribunal, Delhi Bench-C (for short "the Tribunal"), has referred under section 256(1) of the Income-tax Act, 1961 (for short "the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, inasmuch as the Commissioner of Income-tax (Appeals) held that legal fees of Rs. 1,950 paid to Shri Ranina, not being in any way connected with the income-tax proceedings could not be disallowed under section 80VV. However, in respect of the balance amount, he affirmed the view taken by the Assessing Officer. Similarly, in respect of the assessment year 1977-78, the assessee had claimed an expenditure of Rs. 14,166 under the head "Legal expenses". Like in the earlier year, the said expenses also related to the writ petition filed by the assessee challenging the action of the Assessing Officer under section 147 of the Act. While completing the assessment for the said assessment year, the Income tax Officer again disallowed Rs. 10,516 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r interest. By the said writ petition what is sought for is annulment which is not equivalent to determination of any tax liability under the Act." The Tribunal having reversed the order of the Commissioner of Income-tax (Appeals), the aforenoted question has been referred to us for opinion. We have heard learned counsel for the parties. Section 80VV of the Act reads as under: "80VV. In computing the total income of an assessee, there shall be allowed by way of deduction any expenditure incurred by him in the previous year in respect of any proceedings before any income-tax authority or the Appellate Tribunal or any court relating to the determination of any liability under this Act, by way of tax, penalty or interest: Provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 147 or 148 were not fulfilled. Though in the statement of the case there is no indication about the grounds of challenge to the initiation of reassessment proceedings but it can safely be inferred that the challenge was to unlawful assumption of jurisdiction by the Assessing Officer. Therefore, the action of the assessee, in respect whereof he has incurred expenditure, may be in a matter connected with the proceedings under the Act but these cannot be described as proceedings "relating to the determination of any liability under the Act by way of tax, penalty or interest", which pre-supposes valid proceedings. In fact the filing of the writ petition or consultations on the issue with the lawyer was an attempt by the assessee to preve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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