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Issues involved: Challenge to notice u/s 148 of the Income Tax Act, 1961 for reopening assessment u/s 143(3) for A.Y. 1990-91 based on deduction claims u/s 80HH and 80I.
Assessment under Section 148: The petitioner challenged a notice dated 25.11.1997 issued u/s 148 of the Income Tax Act, 1961, for reopening the assessment completed u/s 143(3) on 25.03.1991 for A.Y. 1990-91. The notice was issued based on the claim of deduction u/s 80HH and 80I. The reasons recorded for issuing the notice highlighted discrepancies in the treatment of trading income as income from Industrial Undertaking for claiming deductions. The assessing officer believed that income chargeable to tax had escaped assessment due to inaccurate particulars furnished by the assessee. Claim of Deduction under Section 80HH and 80I: The Revenue contended that the assessee wrongly claimed deductions under Sections 80HH and 80I for trading receipts, which were not eligible. Although the original assessment order did not specifically address the trading income separately, the total income was disclosed. The court noted that if the assessing officer had the relevant material to disallow the claim during the original assessment, there was no justification for issuing a notice u/s 148 after the expiry of four years from the end of the assessment year. Conclusion: The High Court quashed and set aside the notice dated 25.11.1997 issued u/s 148 for reopening the assessment for A.Y. 1990-91. The petition was allowed in favor of the petitioner, emphasizing that when material facts were available during the original assessment, there was no valid reason for reopening the assessment at a later stage.
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