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2010 (4) TMI 16 - SC - Income TaxDeduction u/s 80-I - a notice under Section 154 was issued by the Department purporting to withdraw Section 80-I deduction in respect of the Assessment Year 1997-98. This order under Section 154 was challenged in Appeal by the assessee - The said Appeal was allowed in favour of the assessee by CIT(A) - Soon thereafter, on 20th March, 2002, the Department issued notice under Section 148 for the Assessment Year 1997-98 Assessee filed writ petition against issuance of notice u/s 148 before Punjab and Haryana High Court HC dismissed the petition giving liberty to the assessee herein to raise all objections, including the one relating to jurisdiction of the Assessing Officer to issue notice, before the proper forum - The impugned judgment has been challenged in this Civil Appeal, which now has come for hearing before this Court. held that - During the pendency of this Civil Appeal, we are informed that against the order of the Assessing Officer reopening the assessment, the assessee herein had preferred an Appeal to CIT(A). By his order dated 8th January, 2007 in Appeal No.65/P/03-04, the CIT(A) allowed deduction under Section 80-I for the Assessment Year 1997-98 on the ground that assembling of engine did not amount to manufacture for the purposes of claiming deduction under Section 80-I of the Income Tax Act, 1961. Against this decision of CIT(A), we are informed that the Department has preferred Income Tax Appeal ITAT directed to examine the issuance of notice u/s 148 alongwith the appeal of the revenue
Issues:
1. Deduction under Section 80-I of the Income Tax Act for Assessment Year 1997-98 challenged. 2. Validity of notice under Section 148 for Assessment Year 1997-98. 3. Re-assessment proceedings challenged through a Writ Petition. 4. CIT(A) decision on deduction under Section 80-I for Assessment Year 1997-98. 5. Pending Income Tax Appeal before the Income Tax Appellate Tribunal, Chandigarh. 6. Validity of the notice dated 20th March, 2002 to be examined by the Tribunal. Analysis: 1. The appellant, a joint venture, claimed deduction under Section 80-I of the Income Tax Act for the Assessment Year 1997-98. The deduction was initially allowed but later sought to be withdrawn through a notice under Section 154. The appellant challenged this order, and the CIT(A) allowed the deduction, stating that assembling of engines did not qualify as manufacturing for claiming the deduction. The Department appealed this decision before the Income Tax Appellate Tribunal, Chandigarh, where the issue of the validity of the re-assessment was not addressed by the CIT(A). 2. Subsequently, the Supreme Court directed the Income Tax Appellate Tribunal, Chandigarh, to examine the narrow issue of the validity of the notice dated 20th March, 2002, in the pending Appeal No. ITA 304/CHD/2007. The Court emphasized the need to determine the validity of the notice in question to ensure the proper administration of justice in the ongoing proceedings. 3. The re-assessment proceedings initiated through a notice under Section 148 for the Assessment Year 1997-98 were challenged by way of a Writ Petition before the Punjab and Haryana High Court. The High Court dismissed the petition, allowing the appellant to raise objections, including jurisdictional concerns, before the appropriate forum. This decision led to the subsequent appeal before the Supreme Court. 4. The Supreme Court's judgment disposed of the Civil Appeal, maintaining the interim orders during the ongoing proceedings. The Court did not provide any specific ruling on costs, concluding the matter without further directives on the issue at hand. In summary, the judgment addressed the challenges to the deduction under Section 80-I for the Assessment Year 1997-98, the validity of the notice under Section 148, the re-assessment proceedings, the CIT(A) decision, and the pending Income Tax Appeal. The Supreme Court emphasized the need to examine the validity of the notice in question for the proper resolution of the ongoing appeal before the Income Tax Appellate Tribunal, Chandigarh.
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