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TMI Blog2022 (9) TMI 1254X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the relevant materials on record in particular its own order in the rectification proceedings and the various orders passed by Assessing Officer increasing or reducing the relief under Section 80HHC of the Act? ii) Whether the purported assessment proceedings initiated by the Tribunal for the said assessment year 1994-95 is without jurisdiction and illegal since none of the conditions precedent for assumption of the jurisdiction existed and/or were satisfied? We have heard Mr. J.P. Khaitan, learned Senior Counsel, assisted by Mr. Saumya Kejriwal, learned Advocate appearing for the appellant/assessee and Mr. Tilak Mitra, learned standing Counsel appearing for the respondent/revenue. The assessee during the financial year ended March 31, 1994 exported jute goods manufactured by it and also those purchased from the market. In respect of the profits made on export of such jute goods the assessee was entitled to deduction under Section 80HHC of the Act. Since the assessee was exporting both goods manufactured by it and that purchased from the market, its export profit had to be determined in terms of clause (c) of Sub-section (3) of Section 80HHC and such profits were to be furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 3.3.1997 allowing deduction under Section 80HHC of Rs.3,54,97,167/- in terms of the certificate issued by the Chartered Accountant in the statutory format. Thereafter, the assessee filed a petition under Section 154 of the Act with a prayer before the assessing officer to increase the deduction under Section 80HHC on the basis of the total income determined in the assessment. The assessing officer after discussing the case with the assessee passed an order on 19.9.1997 under Section 154 read with Section 143(3) allowing the enhanced deduction under Section 80HHC as per computation filed by the assessee in their letter dated 10.5.1997. On 3.11.1997 the assessing officer received an audit objection according to which loss from export of trading goods was to be set off against profit from export of manufactured goods and the resultant figure should be adjusted against the export incentives to arrive at admissible deduction under Section 80HHC. It was alleged that in the assessee's case no deduction was admissible after setting off loss from export of trading goods. Based on the said audit objection, the assessing officer issued notice under Section 154 dated 11.12.1997 to rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt order dated 30.3.2001, the assessee filed appeal before the CIT(A) which was allowed by order dated 20.11.2002 primarily on the ground that the reopening of the assessment was a case of change of opinion and based on an audit objection, reopening of the assessment could not have been done apart from other reasons. The revenue being aggrieved by such order filed appeal before the learned tribunal which allowed the revenue's appeal by order dated 28.1.2005 and challenging the said order, the assessee has preferred this appeal which has been admitted to decide the aforementioned substantial questions of law. After having elaborately heard the learned Advocates for the parties and carefully perusing the materials placed on record, we are of the considered view that the conclusion arrived at by the CIT(A) is just and proper and we find that the learned tribunal was not justified in reversing the order passed by the CIT(A). We support such conclusion with the following reasons. Admittedly, the reopening of the assessment was based upon an audit objection. It is not in dispute that the audit objection was not based upon discovery of any new facts or figures, but solely based upon an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceedings initiated under Section 154 of the Act, the CIT(A) held that before the reassessment the opinion of the assessing officer underwent a series of changes from the original assessment order where he was in total agreement with the assessee and thereafter totally disagreed with the assessee while rectifying the original assessment order under Section 154 of the Act withdrawing the deduction allowed under Section 80HHC and, subsequently, in passing the reassessment order and disallowing the assessee's claim for deduction. After noting these facts, the CIT(A) had pointed out that no new material or facts came to the knowledge of the assessing officer after passing the original assessment order and also the first order under Section 154 of the Act while initiating reassessment under Section 148 and he relied upon the same set of material and the audit objection and using these materials he cannot initiate rectification proceedings under Section 154 of the Act and concluded, in our view, rightly that there was no additional material available with the assessing officer which was not available to him at the time of original assessment or passing the order under Section 154 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as an erroneous order prejudicial to the interests of the Revenue, unless the view taken by the Income-tax Officer is unsustainable in law........" In view of the above, we are satisfied that no substantial question of law arises out of the order of the Tribunal. The appeal is dismissed in limine." The revenue preferred appeal against the said decision which was dismissed in the case of COMMISSIONER OF INCOME TAX VS. MAX INDIA LTD. 2007 295 ITR 282 (SC) wherein the Hon'ble Supreme Court had taken note of the fact that Section 80HHC had been amended eleven times and different views existed on the day, when the COMMISSIONER (therein) passed the order in the said case. That apart the Hon'ble Supreme Court also took note of the amendment which was made to the Section in 2005 with retrospective effect and held that such retrospective amendment will not attract the provisions of Section 263. This interpretation would equally apply to a reassessment proceedings under Section 148 of the Act. The relevant portion of the judgment is quoted hereinbelow. "According to the learned Additional Solicitor General, on an interpretation of the provision of section 80HHC(3) as it then stood th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were on the very same issue as regards the entitlement of the assessee to claim deduction under Section 80HHC of the Act. Therefore, such finding of the learned tribunal was absolutely perverse. The learned Tribunal also had held that no conscious opinion was formed by the assessing at the original assessment stage while allowing deduction under Section 80HHC of the Act and there was no exemption or deliberation. This finding appears to be no supported by any justifiable reasons but on a perusal of the assessment order it is definitely clear that the case was discussed with the assessee and thereafter taking into consideration the Chartered Accountant's certificate the deduction as claimed was granted. In fact, there were two decisions of the learned Tribunal which were namely, International Research Park Laboratories Ltd. and A.M. Moosa which decisions would clearly support the stand and the conclusion arrived at the by the assessing officer while completing the scrutiny assessment under Section 143(3) of the Act vide order dated 3.3.1997. Thus, we find that the learned Tribunal erroneously reversed the order passed by the CIT(A) who has considered the facts and circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X
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