TMI Blog2001 (3) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 80HHC was reduced to Rs.2,827 only. The reduction was because the convertible foreign exchange wits only Rs.2,82,716 equivalent to US $ 23,41,443. Accordingly, the deduction was allowed at 1% thereof being Rs.2,827. The assessee filed an appeal against this order of the assessment under section 143(3), read with section 263 which was dismissed by the CIT(A) on 12-8-1991. By the time the appeal against this order of CIT(A) came up for hearing, the order under section 263 was quashed by the Tribunal in IT Appeal No. 731/Cal./91, order dated 26-6-1992. Consequently, the order dated 12-8-1991 of the CIT(A) and of Assessing Officer were set aside by the Tribunal vide order of even dated 26-6-1992 in ITA No. 3389 (Cal.)/91. 3. While giving effect to the order of the Tribunal dated 26-6-1992, the Assessing Officer vide his order dated 22-3-1993 reduced the deduction under section 80HHC to Rs.54,829, this time because as after the adjustment of unabsorbed business loss of the earlier year the gross total. income was only of that amount. The assessee made an application on 26-5-1993 for rectification of this order giving effect to the order of the Tribunal. It was rejected by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch deduction. The matter came up in the Tribunal and the Tribunal vide order in ITA No. 1179 (Cal.)/ 91, dated 20-10-1994 set aside the matter to the file of the CIT(A) to consider the said ground and decide the issue in accordance with law after giving adequate opportunity to the assessee of being heard. We are informed that no consequential order has since been passed by the CIT in consequence of the aforesaid directions. 7. Supporting the order of the Assessing Officer, the Ld. Departmental Representative submitted that doctrine of merger is not applicable because there was no decision of the CIT(A) on merits of 80HHC. The issue in earlier proceedings was whether the Assessing Officer had the jurisdiction to reconsider the claim or not. He further submitted that the effective order was dated 6-11-1995 which was the revival of the original order and, therefore, in view of the decision of the Supreme Court in the case of Hind Wire Industries Ltd. v. CIT [1995] 212 ITR 639, the rectification was within the time-limit. With regard to the other appeal, he submitted that the total income of this year being Nil, in both the situation the Assessing Officer could rectify the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r passed to implement the direction of the higher authority and that order will be erroneous and liable to be set aside after the directions of the higher authority are not faithfully carried out. It is also true that the jurisdiction to pass a fresh order is conferred by the order of the higher authority and this is a well settled principal in view of the decision of the Supreme Court in the case of Modi Industries Ltd. relied upon by the learned counsel of the assessee. However, in this case we are not concerned with any violation of the direction of the higher authorities. What the Assessing Officer has done was to give consequential effect in the allowance under section 80HHC deduction because of the allowance of carry forward losses of the earlier year. In none of the orders made by the Assessing Officer prior to 22-3-1993, the issue of unabsorbed business loss for assessment year 1984-85 of Rs.12,40,759 was in issue. For the first time the loss for assessment year 1984-85 was agitated and allowed in this order which reduced the income of the assessee to Rs.59,329 and after reducing therefrom the deduction under section 80VV, the allowance was only Rs.54,829. The deduction und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause of the assesee's income being reduced to nit All the three actions are consequential. While one or two of them are valid and not disputed, we fail to understand hew could the third or the other could be without jurisdiction. In these circumstances, in our opinion, the assessee's application dated 26-5-1993 for rectification of the order dated 22-3-1993 was liable to the rejected and was so rejected rightly by the Assessing Officer by his order dated 17-6-1993. The CIT(A) in his order dated 13-91995 in appeal against the order under section 154 observed that when the section 263 order of the CIT was quashed by the Tribunal, the fresh assessment made consequent to direction of the CIT under section 263 stood cancelled and in effect, therefore, the original order made under section 143(3) on 25-1-1988 as amended by another order of the CIT relating to said original assessment stood restored. To that extent, we have no quarrel with the observation of the CIT(A). His further direction to the effect, 'As such the appellant would be entitled to deduction under section 80HHC as determined on the basis of the original assessment order which might have merged with any appellate order in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of assessment framed under section 143(3) by his appeal effect order dated 6-11-1995 and that would be the final and effective order available for this assessment year. It was true that the mistake was originally committed by the Assessing Officer in the original order of assessment, but that order has by process of various appeal and revisionary orders culminated into the final and effective order on 6-11-1995 when the Assessing Officer gave effect to the order of the CIT(A) dated 13-9-1995 directing him to restore the original order of assessment. There is no doubt and it is an almost an admitted position that the deduction under section 80HHC cannot exceed the amount of the gross total income by virtue of the provisions of section 80A(2) and, therefore, there was a mistake apparent from record. The question that would arise, therefore, be what is the time-limit within which this rectification can be made? This issue, in our opinion, is now fairly concluded by the decision of the Supreme Court in the case of Hind Ware Industries Ltd. wherein their Lordships of the Supreme Court held that expression 'from the date of the order sought to be amended" or computing the period of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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