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TMI Blog2010 (3) TMI 705X X X X Extracts X X X X X X X X Extracts X X X X ..... hed this court challenging the aforesaid order claiming that the following substantial questions of law would arise for determination of this court : "(i) Whether on the facts and in law, the hon'ble Income-tax Appellate Tribunal was justified in holding that the invoking of section 263 of the Act was not justified ignoring the fact that the order of the Assessing Officer passed under section 143(3) on March 30, 2006, was erroneous in so far as it was prejudicial to the interest of the Revenue? (ii) Whether on the facts and in law, the hon'ble Income-tax Appellate Tribunal was justified in considering the issue relating to the quantum of exclusion under clause (iv) of the Explanation below section 115JB(2) of the Income-tax Act, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection issued by him to the Assessing Officer for recomputing the "book profits" in accordance with the provisions of section 80HHC(1B) of the Act, making them eligible to the extent of 50 per cent. The Tribunal placed reliance on the judgment delivered by Special Bench in the case of Deputy CIT v. Syncome Formulations (I) Ltd. [2007] 292 ITR (AT) 144 ; 106 ITD 193 (Mum) [SB] and Asst. CIT v. Ajanta Pharma Ltd. [2008] 21 SOT 101 (Mum). It is appropriate to mention that in those decisions, the Tribunal has considered the issue relating to computation of "book profit" for the purposes of section 115JB and in relation to clause (iv) of the Explanation to section 115JB of the Act. It has been observed that the amount referred to therein is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Assessing Officer while framing the assessment under section 143(3) onMarch 30, 2006, is a possible view. No decision to the contrary has been brought to our notice and in any case, it cannot be said that the view of the Assessing Officer was unsustainable in law. We also find that the Commissioner has neither in the show-cause notice dated March 14, 2008, and nor in the impugned order dated March 31, 2008, made reference to any judicial order to support his interpretation, which is contrary to that of the Assessing Officer. In any case, having regard to the fact that the view adopted by the Assessing Officer was a possible view in the light of the cited Tribunal decisions, though rendered subsequently, the same in our considered opi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the date when the Assessing Officer had passed the order has to be taken into consideration. No subsequent change in law could constitute basis for exercise of power under section 263 of the Act. The views of the hon'ble Supreme Court are discernible from para 10 of Malabar Company's case [2000] 243 ITR 83 (SC) which discusses section 80HHC and read thus (page 283): "In our view at the relevant time two views were possible on the word `profits' in the proviso to section 80HHC (3). It is true that vide the 2005 amendment the law has been clarified with retrospective effect by insertion of the word `loss' in the new proviso. We express no opinion on the scope of the said amendment of 2005. Suffice it to state that in this particular c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer unsustainable in law and therefore the Commissioner was right in invoking section 263 of the Income-tax Act. In this connection, he has further submitted that in fact the 2005 amendment which is clarificatory and retrospective in nature itself indicates that the view taken by the Assessing Officer at the relevant time was unsustainable in law. We find no merit in the said contentions. Firstly, it is not in dispute that when the order of the Commissioner was passed there were two views on the word `profits' in that section. The problem with section 80HHC is that it has been amended eleven times. Different views existed on the day when the Commissioner passed the above order. Moreover, the mechanics of the section have become ..... X X X X Extracts X X X X X X X X Extracts X X X X
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