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Issues involved: Appeals filed by the assessee against the orders of CIT(A)-II, Indore, for the assessment years 1999-2000, 2000-01, and 2002-03 in the matter of order passed u/s 147/143(3) of the Income-tax Act, 1961.
Assessment Year 1999-2000: The return of income was filed u/s 139(1) declaring nil total income, with deduction u/s 80HHC. Notice u/s 263 was issued challenging the deduction u/s 80HHC and PF/ESIC payments. CIT upheld the deduction u/s 80HHC but disallowed deduction u/s 43B. Subsequent notices u/s 154 and 148 were issued. The AO passed an assessment order u/s 147 read with Section 143(3). The assessee contended that the proceedings u/s 147 were improper as the issue was already decided u/s 263. The Tribunal found that the issue of deduction u/s 80HHC had been examined and decided in favor of the assessee by the CIT u/s 263, hence reopening the assessment was not justified. Assessment Year 2002-03: Reopening was based on the same reasoning as proceedings u/s 154. The ld. Authorized Representative argued that parallel proceedings u/s 147 during pending rectification proceedings u/s 154 were invalid. The Tribunal cited precedents where it was held that initiation of reassessment proceedings during the pendency of rectification proceedings on the same issue is invalid. The Tribunal found that the initiation of proceedings u/s 147 was not justified in view of the ongoing rectification proceedings u/s 154. The appeals of all three assessment years were allowed on the issue of the initiation of reassessment proceedings. The Tribunal concluded that the initiation of proceedings u/s 147 was not justified in both assessment years based on the decisions and precedents cited.
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