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TMI Blog2014 (7) TMI 1240X X X X Extracts X X X X X X X X Extracts X X X X ..... of the matter, allowing reassessment proceedings would be a mere academic exercise only because the Assessing officer would bound by the orders of the Tribunal. Moreover, the very basis of the impugned notice dated 10 January 2005 will not be sustainable. In view of all the above reasons, we set aside the impugned notice dated 10 January 2005. - Writ Petition No. 802 of 2005 - - - Dated:- 22-7-2014 - M. S. Sanklecha And G. S. Kulkarni, JJ. For the Petitioner : Rafiqu Dada, Senior Advocate with Jitendra Jain and Murlidharan i/by M/s. Joy Legal Consultants For the Respondent : Suresh Kumar ORDER This petition assails the notice dated 10 January 2005 issued by the Assessing officer under Section 148 of the Income Tax Act, 1961 ( the Act ). By the impugned notice dated 10 January 2005 the Assessing officer is seeking to reopen the assessment for Assessment Year 2000-01. 2) This petition was admitted on 20 June 2005 and a stay of the impugned notice was granted. 3) On 29 November 2000, the petitioner filed its return of income for A.Y. 2000-01. In its return the petition had declared an income of ₹ 2.04 crores after having claimed deduction of ₹ 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee has been allowed deduction u/s.80HHC as under: Trading Profit Rs.16,65,032/ Loss from manufacturing Rs.19,21,142/ Deduction on incentives Rs.5,96,07,066/ Deduction allowed Rs.5,93,50,957/ When the deduction was allowed the judgment of Mangalya Trading and Investment Limited (ITA 6354/Mum/98 dated 23/4/2004) was not available at the time completion of assessment u/s. 143(3). The decision of ITAT Mumbai has been endorsed by the Hon'ble Bombay High Court in the case of Rohan Dyes and Intermediates Ltd. vs. CIT dated 9/8/2004. In view of these judgments the deduction u/s.80HHC would not available on the balance incentives, even where the 90% of the incentives exceeds the (Net) loss from the exports. As per the Judgment of IPCA Laboratories Limited of Supreme Court (266 ITR 521) and the losses in export of trading goods should be adjusted against the profits of manufacture goods for visa versa while computing the deduction u/s.80HHC. Therefore, in view of the decision of IPCA Laboratori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within four years from the end of the relevant assessment year. 9) It was only on 18 March 2005 that the petitioner was served with the copy of the order dated 15 February 2005 of the Assessing officer giving effect to the order dated 29 December 2003 of the CIT(A). However, while giving effect to the order of CIT(A), the Assessing Officer completely ignored the interest income which had to be taken into account. This resulted in the petitioner filing a rectification application before the Assessing Officer. However, the same was rejected by order dated 26 April 2006 of the Assessing Officer. This resulted in the petitioner filing an appeal against the order rejecting the rectification application to the CIT(A). On 30 May 2005, CIT(A) allowed the petitioner' appeal and directed the Assessing officer to consider interest income in accordance with the directions contained its earlier order dated 29 December 2003 of the CIT(A). The respondentRevenue being aggrieved by the order dated 30 May 2005 of the CIT(A) allowing the petitioner's appeal preferred an appeal before the Income Tax Appellate Tribunal (Tribunal). 10) Thereafter, during the pendency of this petition the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew of the above, it is submitted that the petition be allowed. 13) As against the above, Mr. Suresh Kumar learned Counsel appearing for the revenue in support of the impugned notice submits that at this stage there is no need of interference by this Court. The contention of the petitioner on merits could be urged before the Assessing Officer during the reassessment proceedings and the same would be disposed of in accordance with law. 14) We have considered the rival submissions. It is well settled that a notice to reopen the assessment under Section148 of the Act can only be issued if the Assessing officer has reason to believe that income chargeable to tax has escaped assessment. This reason to believe on the part of the Assessing Officer has not to be on the basis of change of opinion i.e. where Assessing Officer has had occasion to consider an issue during the assessment proceeding under Section 143(3)of the Act. In this case, the Assessing Officer had during the proceeding under section 143(3) of the Act raised queries to the petitioner specifically with regard to petitioner's claim for deduction under Section 80HHC of the Act and the petitioner's response to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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