M/s. H.E.G. Limited, Raisen V. The C.I.T., Bhopal

ITA 257/IND/2010

• Counselvise Citation: 25722714 RSA 2010
• Duration Of Justice: 2 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2000-2001
• Appeal Filed On: 03-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DARSHAN SINGH
• Keywords: Opportunity of being heard; Period of limitation; Retrospective amendment; Assessment record; Time period of passing order
• Section: 143(3); 80HHC; 147; 263; 63; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AAACH6184K I.T.A.NO. 257 /IND/201 0 A.Y. : 2000 - 01 H.E.G.LIMITED, MANDIDEEP, CIT, BHOPAL. DISTT. RAISEN (MP) VS APPELLANT RESPONDENT APPELLANT BY : SHRI SUMIT NEMA, ADV. RESPONDENT BY : SHRI DARSHAN SINGH, CIT DR DATE OF HEARING : 01 .0 8 .2012 DATE OF PRONOUNCEMENT : 31 . 0 8 .201 2 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX U/S 263 DA TED 30 TH MARCH, 2010, FOR THE ASSESSMENT YEAR 2000-01, IN TH E MATTER OF ORDER PASSED BY ASSESSING OFFICER U/S 147/143(3) OF THE INCOME-TAX ACT, 1961. 2. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE :- -: 2: - 2 1. THAT THE LD. CIT ERRED IN SETTING ASIDE THE ASSESSM ENT OF THE APPELLANT EVEN WHEN A SPEAKING ORDER WAS PASSED BY THE A.O. AFTER FULL APPLICATION OF MIND A ND AFTER THOROUGHLY SCRUTINIZING THE CLAIMS MADE BY TH E APPELLANT, THE RETURN OF TOTAL INCOME AND THE INFORMATION FILED BY THE APPELLANT DURING THE COURS E OF ASSESSMENT PROCEEDINGS. THEREFORE, INVOKING OF THE PROVISIONS OF SECTION 263 BY THE LD. CIT IS ILLEGAL AND BAD IN LAW. THE ORDER U/S 263 REQUIRES TO BE CANCELLED. 2. CONSIDERING THAT THE FIRST NOTICE ISSUED U/S 263 B Y THE LD. CIT WAS DATED 4-3-2008 ON THE ISSUE OF ALLOWABI LITY OF SALES TAX DEFERMENT AND THEREAFTER ANOTHER NOTIC E U/S 263 DATED 17-3-2008 ON THE ISSUE OF DEDUCTION U/S 80HHC ALLOWED WITHOUT CONSIDERING THE PROVISIONS OF SECTION 80IA(9) OF THE INCOME TAX ACT, THE ORDER PA SSED BY THE LD. CIT IS NOTHING BUT AN ORDER TO DO REASSESSMENT OF THE APPELLANT'S CASE. MOREOVER, THE LD. CIT ACCEPTED THE APPELLANT'S SUBMISSIONS WITH RESPE CT OF -: 3: - 3 CLAIM OF SALES TAX DEFERMENT. THEREFORE, THE ORDER OF THE LD. CIT SUPERSEDES THE PROVISIONS OF SECTION 153 OF THE INCOME TAX ACT. THE ORDER OF THE LD. CIT IS, THEREF ORE, ILLEGAL AND BAD IN LAW FOR THIS REASON ALSO. 3. ALSO CONSIDERING THAT THE FIRST ORDER PASSED BY THE AO WAS U/S 250/143(3) DATED 25-32004 WHEREIN CLAIM OF DEDUCTION U/S 80HHC WAS ALLOWED ALONGSIDE DEDUCTION U/S 80IA, THEN HOW COME THE PROVISIONS OF SECTION 2 63 ARE INVOKED IN RESPECT OF THE LAST ORDER U/S 147/14 3(3) DATED 17-12-2007. THE LAW DOES NOT PERMIT TO INVOKE REVISIONARY POWERS IN RESPECT OF LAST ORDER WHEN TH E POSITION FOLLOWS FROM EARLIER ORDERS IN THE CASE OF THE APPELLANT. THE ORDER OF THE LD. CIT IS, THEREFORE, ILLEGAL AND BAD IN LAW FOR THIS REASON ALSO. WITHOUT PREJUDICE TO THE ABOVE:- 4. THAT THE LD. CIT ERRED IN HOLDING THAT THE ORDER OF THE A.O. IS ERRONEOUS SINCE DEDUCTION U/S 80HHC HAS BEEN WRONGLY ALLOWED TO THE APPELLANT WITHOUT INVOKING T HE PROVISIONS OF SECTION 80IA (9) OF THE INCOME TAX AC T. IT IS SUBMITTED THAT AS PER LAW, THE SAID CLAIM IS ALLOWA BLE AND -: 4: - 4 HAS BEEN RIGHTLY ALLOWED BY THE A.O. 5. THE ORDER OF THE LD. CIT U/S 263 THEREFORE REQU IRES TO BE CANCELLED. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. IN THE ORDER PASSED U/S 263, THE LD. CIT OBSERVED AS UNDER :- FROM AN EXAMINATION OF THE INCOME TAX ASSESSMENT RECORDS OF THE ASSESSEE FIRM FOR THE ASSESSMENT YEA R 2000-01, IT TRANSPIRED THAT IN THE ASSESSMENT MADE VIDE ORDER DATED 17.12.2007 U/S 147 THE ASSESSING OFFICE R HAS ALLOWED DEDUCTION U/S 80IA AND SECTION 80HHC AS UNDER :- DEDUCTION U/S 80IA POWER DIVISION, TAWA 5,31,66,651 POWER DIVISION, DURG 0 POWER DIVISION, RISHABDEV 1,88,34,226 TOTAL DEDUCTION U/S 80IA 7,20,00,877 DEC U/S 80HHC 2,58,09,787 -: 5: - 5 FURTHER IT IS OBSERVED THAT WHILE CALCULATING/ALLO WING U/S 80HHC, THE PROVISIONS OF SUB-SECTION (9) OF SECTION 80IA WERE NOT CONSIDERED. AS PER PROVISIONS OF SECTION 8 0IA(9), WHERE DEDUCTION IS ALLOWED U/S 80IA IN RESPECT OF E LIGIBLE PROFITS FOR ANY ASSESSMENT YEAR, DEDUCTION TO THE E XTENT OF SUCH PROFITS SHALL NOT BE ALLOWED UNDER ANY OTHE R PROVISION OF CHAPTER VI A OF THE INCOME-TAX ACT, 19 61. ACCORDINGLY, DEDUCTION ALLOWED U/S 80IA, TO THE EXT ENT OF RS. 7,20,00,877/- WAS REQUIRED TO BE REDUCED WHILE COMPUTING THE PROFITS FOR ALLOWANCE OF DEDUCTION U/ S 80HHC. 4. AFTER DISCUSSING THE CASE LAWS CITED BY THE LD. AUTHORIZED REPRESENTATIVE, THE LD. CIT REACHED TO T HE FOLLOWING CONCLUSION :- THEREFORE, IN VIEW OF THE FACTS STATED IN THE AB OVE PARAGRAPHS, I FIND THAT IN VIEW OF THE AMENDMENT OF SECTION 80IA W.E.F. 1.4.99 WITH THE INSERTION OF SU B SECTION (9A), THE PROFIT OF THE BUSINESS WHILE ALLOWING DEDUCTION U/S 80HHC SHALL BE FURTHER REDUCED BY PROFITS ON WHICH DEDUCTION U/S 80IA HAS -: 6: - 6 BEEN ALLOWED. THE LANGUAGE OF SECTION 80IA(9)IS VER Y CLEAR THAT WHERE THE DEDUCTION IS ALLOWED U/S 80IA IN RESPECT OF THE PROFITS FOR ANY ASSESSMENT YEAR, DEDUCTION TO THE EXTENT OF SUCH PROFIT SHALL NOT BE ALLOWED UNDER ANY OTHER PROVISION OF CHAPTER VI A WHICH INCLUDE DEDUCTION U/S 80HHC OF THE INCOME- TAX ACT, 1961. AFTER CAREFUL EXAMINATION OF THE FACTS PLACED ON RECORD AND WRITTEN SUBMISSION FILED BY THE ASSESSEE , I AM OF THE OPINION THAT THE ASSESSMENT ORDER DATED 17.12.2007 U/S 147 FOR ASSESSMENT YEAR 2000-01 BY THE ASSESSING OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF REVENUE AND IS, THEREFORE, SET ASIDE FOR BEING MADE AFRESH FROM THE RETURN STAGE. THE ASSESSING OFFICER IS DIRECTED TO MAKE FRESH ASSESSMENT AS PER LAW AFTER CARRYING OUT PROPER ENQUIRIES AND INVESTIGATION AND AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. -: 7: - 7 5. AGGRIEVED BY THE ABOVE ORDER, THE ASSESSEE IS IN AP PEAL BEFORE US. SHRI SUMIT NEMA, ADVOCATE, APPEARED ON B EHALF OF THE ASSESSEE AND CONTENDED THAT CLAIM OF DEDUCTION U/S 80HHC WAS EXAMINED BY THE ASSESSING OFFICER AND PAR TLY ALLOWED IN THE FIRST ASSESSMENT ORDER DATED 31.3.20 03, PASSED U/S 143(3). AS PER LD. AUTHORIZED REPRESENTATIVE, T HE PERIOD OF LIMITATION HAS TO BE COUNTED FROM THIS ORDER AND NO T FROM THE REASSESSMENT ORDER PASSED U/S 147 DATED 1`7.12.2007 , BECAUSE THE RE-ASSESSMENT ORDER WAS FOR DISALLOWING PART OF SECTION 80HHC ON PROFITS ON TRANSFER OF DUTY FREE E NTITLEMENT PASS BOOK AS PER AMENDMENT TO SECTION 28(IIID). THU S, THE REASSESSMENT ORDER WAS ONLY FOR A LIMITED PURPOSE A ND THIS REASSESSMENT ORDER DID NOT DEAL WITH THE ORIGINAL D EDUCTION PARTLY ALLOWED U/S 80HHC. AS PER LD. AUTHORIZED REPRESENTATIVE , THE LIMITATION HAS TO BE COUNTED F ORM THE DATE OF ORDER U/S 143(3) DATED 31.3.2003 AND NOT FROM OR DER U/S 147 DATED 17.12.2007 AND FOR THIS PURPOSE, RELIANCE WAS PLACED ON THE DECISION REPORTED AT 293 ITR 1, 19 TA XMAN 142. 6. WITH REGARD TO THE MERIT OF DISALLOWANCE OF DEDUCTI ON U/S 80HHC, THE CONTENTION OF LD. AUTHORIZED REPRESE NTATIVE -: 8: - 8 WAS THAT TWO VIEWS EXISTED AS ON THE DATE. THERE WE RE JUDGMENTS IN FAVOUR OF THE ASSESSEE AND ALSO JUDGME NTS IN FAVOUR OF REVENUE, THEREFORE, THE LD. CIT WAS NOT J USTIFIED IN INVOKING THE POWERS U/S 263 IN RESPECT OF MATTERS W HICH ARE DEBATABLE AND ONE OF THE LEGAL TENABLE VIEWS HAS BE EN TAKEN BY THE ASSESSING OFFICER. AS PER LD. AUTHORIZED REPRES ENTATIVE , JURISDICTIONAL HIGH COURT IN THE CASE OF J.P. TOBAC CO, 229 ITR 123, ON THE ISSUE OF SECTION 80HHC DECIDED IN FAVOU R OF THE ASSESSEE AND THIS VIEW WAS AFFIRMED BY THE HON'BLE SUPREME COURT AND REPORTED AT 292 ITR 1. AS PER LD. AUTHORI ZED REPRESENTATIVE , THIS VIEW OF JURISDICTIONAL HIGH C OURT HAS BEEN FOLLOWED BY HON'BLE MADRAS HIGH COURT IN THE C ASE REPORTED AT 304 ITR 319. AS PER LD. AUTHORIZED REPR ESENTATIVE, THE M.P. DECISION HAS BEEN CONSIDERED TO BE AS GOOD LAW EVEN AFTER AMENDMENT, THUS, THE VIEW FAVOURABLE TO THE A SSESSEE, ESPECIALLY IN VIEW OF THE JURISDICTIONAL HIGH COURT , DECISION HAS TO BE FOLLOWED . 7. SHRI SUMIT NEMA, ADVOCATE, FURTHER CONTENDED THAT THE ORDER PASSED U/S 263 IS ILLEGAL AND BAD IN LAW ON THE PLEA THAT WHERE TWO VIEWS ARE POSSIBLE, THERE CANNOT BE EXERCISE OF -: 9: - 9 POWERS U/S 263 AS HELD IN 295 ITR 282, IN THE CASE OF MAX INDIA. HE FURTHER SUBMITTED THAT THIS CASE WAS RELA TED TO 80 HHC DEDUCTION, WHEREIN HON'BLE SUPREME COURT NOTED THAT THE SAID SECTION WAS AMENDED 11 TIMES AND DIFFERENT VIEWS EXIST. THUS, WHERE THERE ARE DIFFERENT VIEWS POSSIB LE, THERE CAN NOT BE SAID TO BE AN ERROR, WHICH IS AMENABLE TO SE CTION 263. IN VIEW OF THE ABOVE ARGUMENTS, THE LD. AUTHORIZED REPRESENTATIVE PRAYED THAT ORDER PASSED BY CIT U/S 263 DESERVES TO BE QUASHED. 8. ON THE OTHER HAND, SHRI DARSHAN SINGH, CIT DR, APPEARED ON BEHALF OF REVENUE AND CONTENDED THAT WH ILE PASSING ORDER, THE ASSESSING OFFICER HAS NOT APPLIE D HIS MIND TO THE AMENDED PROVISIONS OF LAW EFFECTIVE FROM ASS ESSMENT YEAR 1999-2000, ACCORDINGLY, FAILED TO REDUCE THE A MOUNT OF DEDUCTION U/S 80IA FROM THE ELIGIBLE PROFIT AND HAS WRONGLY ALLOWED DEDUCTION U/S 80HHC ON THE ENTIRE AMOUNT OF PROFIT. AS PER LD. CIT DR, THE ORDER PASSED BY THE ASSESSIN G OFFICER WITHOUT APPLYING CORRECT PROVISIONS OF LAW HAS REND ERED HIS ORDER ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE -: 10: - 10 IN SO FAR AS DEDUCTION ALLOWED U/S 80IA AMOUNTING T O RS. 7.20 CRORES REMAINED TO BE REDUCED FROM THE ELIGIBLE PRO FITS. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D ALSO THE DECISION CITED AT BAR BY THE LD. AUTHORIZED REPRESE NTATIVE AND LD. CIT DR. WE HAD ALSO CONSIDERED THE JUDICIAL PRONOUNCEMENTS RELIED ON BY THE CIT IN HIS ORDER PA SSED U/S 263. FROM THE RECORD, WE FOUND THAT IN ITS RETURN O F INCOME FOR THE ASSESSMENT YEAR 2000-01, THE ASSESSEE HAS CLAIM ED DEDUCTION U/S 80IA AND 80HHC. WHILE COMPUTING DEDUC TION U/S 80HHC, THE ASSESSEE WAS REQUIRED TO REDUCE THE AMOUNT OF DEDUCTION CLAIMED U/S 80IA IN RESPECT OF ELIGIBL E PROFITS, IN TERMS OF PROVISIONS OF SUB SECTION (9) OF SECTION 8 0IA AS INTRODUCED BY THE FINANCE ACT, 1998, W.E.F. ASSESSM ENT YEAR 1999-2000. HOWEVER, THE ASSESSEE HAS NOT REDUCED TH E CLAIM OF DEDUCTION U/S 80HHC IN TERMS OF PROVISIONS OF SE CTION 80IA(9) INTRODUCED BY FINANCE ACT, 1998, W.E.F. A.Y . 1999- 2000. THUS, HIGHER AMOUNT OF CLAIM WAS MADE U/S 890 HHC IN THE ASSESSMENT YEAR 2000-01. WHILE PASSING ORDER U/ S 143(3) DATED 31.3.2003, THE ASSESSING OFFICER, HAS NOT DIS TURBED THE -: 11: - 11 WRONG COMPUTATION OFFERED BY THE ASSESSEE WITH RESP ECT TO ELIGIBLE CLAIM OF DEDUCTION U/S 80HHC IN TERMS OF S ECTION 80IA(9). THEREAFTER, THIS ASSESSMENT WAS REOPENED U /S 147 ON THE PLEA THAT DEDUCTION U/S 80IA IN RESPECT OF THRE E POWER DIVISIONS HAS BEEN ALLOWED WITHOUT SET OFF OF LOSSE S OF PAST ASSESSMENT YEARS CONTRARY TO THE PROVISIONS OF SECT ION 80IA(5) OF THE INCOME-TAX ACT. LIKEWISE, DEDUCTION U/S 80HH C WAS FOUND TO BE CLAIMED EXCESSIVELY. THUS, INCOME OF TH E ASSESSEE COMPANY HAS ESCAPED ASSESSMENT. 10. IN THE ORDER PASSED U/S 147 READ WITH SECTION 143(3 ) DATED 17.12.2008 THE ASSESSABLE INCOME OF THE ASSES SEE WAS COMPUTED AT RS. 8.96 CRORES AS AGAINST NIL INCOME R ETURNED BY THE ASSESSEE. IN THE REASSESSMENT ORDER SO FRAMED U /S 143(3) READ WITH SECTION 147, THE ASSESSING OFFICER HAS AG AIN NOT CONSIDERED THE AMENDED PROVISIONS OF LAW WITH RESPE CT TO INSERTION OF SUB SECTION (9) OF SECTION 80IA AND AL LOWED CLAIM OF DEDUCTION U/S 80HHC ON THE ELIGIBLE PROFITS WITH OUT FIRST DEDUCTING THE AMOUNT OF DEDUCTION ALLOWED U/S 80IA. THUS, THE ASSESSMENT ORDER PASSED U/S 143(3) READ WITH SE CTION 147 DATED 17.12.2007, HAS BECOME ERRONEOUS AND PREJUDIC IAL TO -: 12: - 12 THE INTERESTS OF THE REVENUE. IF THE ORDER PASSED B Y ASSESSING OFFICER IS NOT AS PER PROVISIONS OF LAW APPLICABLE FOR THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION I.E. 2 000-01, HON'BLE SUPREME COURT IN THE CASE OF MALABAR INDUST RIAL CO. LTD., 243 ITR 83, HELD THAT PASSING THE ORDER BY AS SESSING OFFICER WITHOUT APPLYING THE RELEVANT PROVISIONS OF LAW APPLICABLE IN THAT YEAR RENDERS THE ASSESSMENT ORDE R ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTERESTS O F REVENUE. 11. WITH REGARD TO ARS CONTENTION ON LIMITATION PERIO D , WE FOUND FROM RECORD THAT ORIGINAL ASSESSMENT OF AS SESSEE WAS FRAMED UNDER SECTION 143(3), WHEREIN CLAIM OF DEDUC TION UNDER SECTION 80HHC AND 80IA WAS PARTLY ALLOWED. TH EREAFTER, IT WAS FOUND THAT THE ASSESSEE HAS WRONGLY CLAIMED DEDUCTION U/S 80HHC AS WELL AS U/S 80IA IN RESPECT OF THREE P OWER DIVISIONS. WHEN THE REASSESSMENT ORDER WAS FRAMED O N 17.12.2007, THE AMENDMENT BROUGHT IN BY TAXATION LA WS AMENDMENT ACT, 1998, W.E.F. ASSESSMENT YEAR 1999-20 00, BY INSERTION OF SUB SECTION (9) UNDER SECTION 80IA WAS NOT CONSIDERED AND THE ASSESSING OFFICER HAS ALLOWED DE DUCTION U/S 80HHC WITHOUT REDUCING THE DEDUCTION ALLOWED U/ S 80IA -: 13: - 13 FROM THE ELIGIBLE PROFIT. UNDER THESE CIRCUMSTANCES , THE ORDER PASSED U/S 143(3) HAS MERGED WITH THE ORDER PASSED U/S 147, WHEREIN BOTH CLAIM OF DEDUCTION U/S 80HHC AND 80IA WAS REVISED/RECOMPUTED. AS PER PROVISIONS OF SUB SECTIO N (2) OF SECTION 263, NO ORDER SHALL BE MADE UNDER SUB SECTI ON (1) OF SECTION 263 AFTER EXPIRY OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER SOUGHT TO BE REVI SED WAS PASSED. SINCE IN THE INSTANT CASE, ORDER OF REASSES SMENT PASSED ON 17.12.2007 WAS SOUGHT TO BE REVISED, THE SAME WAS WELL WITHIN THE LIMITATION PERIOD PROVIDED U/S 263( 2). 12. IN THE INSTANT CASE, IN RESPECT OF AN ISSUE WHICH WAS SUBJECT MATTER OF REASSESSMENT, LIMITATION U/S 263( 2) WOULD RUN FROM THE DATE OF REASSESSMENT ORDER AND THE DOC TRINE OF MERGER WILL BE APPLICABLE. IT IS NOT THE CASE OF TH E ASSESSEE THAT IN REASSESSMENT ORDER, THE ASSESSEES CLAIM FOR DED UCTION U/S 80HHC & 80IA WAS NOT EXAMINED NOR DISTURBED. THE LD . CIT IN EXERCISE OF HIS POWER U/S 263 SOUGHT TO REVISE THE CLAIM OF DEDUCTION U/S 80HHC, WHICH WAS WRONGLY ALLOWED EVEN IN THE REASSESSMENT ORDER PASSED ON 17.12.2007. SINCE THE CLAIM OF DEDUCTION U/S 80HHC AND 80IA WERE ALREADY SUBJECT M ATTER OF -: 14: - 14 REASSESSMENT, THE SAME WERE MERGED IN THE REASSESSM ENT AND LIMITATION OF TWO YEARS, UNDER SUB SECTION (2) OF S ECTION 263 HAS TO BE RECKONED FROM THE DATE OF THE ORDER OF RE ASSESSMENT DATED 17.12.2008. 13. IN VIEW OF THE ABOVE, THE ORDER PASSED BY THE CIT U/S 263 DATED 30 TH MARCH, 2010, WAS WELL WITHIN THE LIMITATION PERIOD PRESCRIBED U/S 263(2). SO FAR AS THE CONTENT ION OF THE LD. AUTHORIZED REPRESENTATIVE TO THE EFFECT THAT IS SUE WAS DEBATABLE AND TWO VIEWS WERE POSSIBLE, THEREFORE, T HE ACTION OF CIT U/S 263 WAS NOT WARRANTED ON SUCH DEBATABLE ISS UE, HAS NO MERIT. WHETHER THE ISSUE DECIDED BY ASSESSING OF FICER IS DEBATABLE IS TO BE CONSIDERED AS ON THE DATE THE AS SESSING OFFICER HAS PASSED THE ORDER, WHEREIN THE ERROR HAS OCCURRED AND WHICH HAS RENDERED THE ORDER OF ASSESSING OFFIC ER ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTERESTS O F THE REVENUE. IN THIS CASE, THE ORDER WAS PASSED BY THE ASSESSING OFFICER ON 17.12.2007, AS ON THE DATE OF PASSING TH E ORDER THE AMENDED PROVISIONS OF LAW WAS ALREADY THERE IN FORC E. FURTHERMORE, THE CONTROVERSY IN THE MATTER WAS JUDI CIOUSLY DECIDED BY THE I.T.A.T. SPECIAL BENCH IN THE CASE OF ROGINI -: 15: - 15 GARMENTS, VIDE ORDER DATED 27 TH APRIL, 2007, AND WHICH WAS REPORTED AT 108 ITD 49. AS THERE WAS CONTRARY VIEW ON THE ISSUE, A SPECIAL BENCH WAS FORMED TO DECIDE WHETHER RELIEF U/S 80IA SHOULD BE DEDUCTED FROM PROFITS AND GAINS OF A SSESSEES BUSINESS WHILE COMPUTING RELIEF U/S 80HHC. IT WAS H ELD BY THE SPECIAL BENCH VIDE ITS ORDER THAT IN VIEW OF THE SP ECIFIC RESTRICTIONS PROVIDED BY INSERTION OF SUB SECTION ( 9) OF SECTION 80IA W.E.F. ASSESSMENT YEAR 1999-2000, RELIEF U/S 8 0IA SHOULD BE DEDUCTED FROM PROFITS AND GAINS OF BUSINESS AND ON THE BALANCE OF PROFIT RELIEF U/S 80HHC IS TO BE ALLOWED . THIS DECISION OF THE I.T.A.T. SPECIAL BENCH DATED 27 TH APRIL, 2007, WAS ALREADY AVAILABLE BEFORE THE ASSESSING OFFICER WHEN HE PASSED HIS ORDER ON 17 TH DECEMBER, 2007. AS ON THAT DATE, THERE WAS NO ANY CONTRARY VIEW OF ANY HIGH COURT AN D SINCE THE I.T.A.T. SPECIAL BENCH WAS FORMED TO RESOLVE TH E ISSUE AND ORDER OF SPECIAL BENCH RESOLVING THE CONTROVERSY WA S ALREADY AVAILABLE TO ASSESSING OFFICER MUCH PRIOR TO DATE O F PASSING THE ORDER DATED 17.12.2007, IT CANNOT BE SAID THAT ON T HE DATE THE ASSESSING OFFICER HAS PASSED THE ORDER, ISSUE WAS D EBATABLE. NOW COMING TO THE DECISION OF JURISDICTIONAL HIGH C OURT -: 16: - 16 REPORTED AT 229 ITR 123, RELIED ON BY THE LD. AUTHO RIZED REPRESENTATIVE IN SUPPORT OF THE PROPOSITION THAT THE ISSUE OF CLAIM OF DEDUCTION U/S 80HHC WAS DECIDED IN FAVOUR OF THE ASSESSEE, AS PER OUR CONSIDERED VIEW, THIS DECISION IS NOT APPLICABLE TO THE ASSESSEE IN ASSESSMENT YEAR 2000- 01, IN SO FAR AS IT WAS RELATED TO THE ASSESSMENT YEAR 1984-8 5, I.E. MUCH PRIOR TO THE AMENDMENT OF SECTION 80IA BY FINANCE A CT, 1998, EFFECTIVE FROM ASSESSMENT YEAR 1999-2000, BY INSERT ION OF SUB SECTION (9). 14. THERE IS NO DISPUTE TO THE WELL SETTLED LEGAL PROPO SITION THAT IN CASE THE ISSUE IS DEBATABLE AND THE ASSESSI NG OFFICER HAS TAKEN ONE OF THE LEGALLY TENABLE VIEWS, THE LD. CIT CANNOT EXERCISE HIS POWERS U/S 263, SO AS TO BLAME THE ASS ESSING OFFICER THAT HE HAS NOT TAKEN THE OTHER COURSE OF A CTION AVAILABLE TO HIM. HERE WE HAVE TO SEE AS TO WHETHER ON THE DATE THE ASSESSING OFFICER HAS PASSED THE ORDER, THE ISS UE WAS DEBATABLE OR NOT. ON THE BASIS OF JUDICIAL PRONOUNC EMENT AVAILABLE AS ON THE DATE OF ORDER PASSED BY THE ASS ESSING OFFICER, WE HAVE TO SEE WHETHER THE ISSUE IS DEBATA BLE OR NOT. IN THE INSTANT CASE BEFORE US, THE ISSUE WITH REGAR D TO -: 17: - 17 APPLICATION OF SUB SECTION (9) OF SECTION 80IA W.E. F. ASSESSMENT YEAR 1988-89, WAS NOT IN DISPUTE IN VIEW OF THE DEC ISION OF THE I.T.A.T. SPECIAL BENCH IN THE CASE OF ROGINI GARMEN TS (SUPRA). AS ON THIS DATE, THERE WAS NO OTHER DECISION OF ANY OF THE HIGH COURT, WHICH SUPPORTS THE VIEW TAKEN BY THE ASSESSI NG OFFICER, THEREFORE, IT CANNOT BE SAID THAT THE ASSESSING OFF ICER HAS TAKEN ONE OF THE POSSIBLE VIEWS WHEN THE ISSUE WAS DEBATABLE. IN THE CASE OF MAX INDIA LIMITED, 295 ITR 282, THE DEDUCTION CLAIMED U/S 80HHC, IN THE ASSESSMENT YEAR 1992-93, ON THE NEGATIVE PROFIT OF THE ASSESSEE, WAS ALLOWED BY THE ASSESSING OFFICER, WHEN TWO VIEWS WERE EXISTED ON THE WORD P ROFITS IN PROVISO TO SECTION 80HHC(3). WHEN THE LD. CIT HAS P ASSED THE ORDER U/S 263, ON THE PLEA OF AMENDMENT IN 2005 IN SECTION 80HHC WHICH WAS RETROSPECTIVE IN NATURE, IT WAS HEL D BY THE HON'BLE SUPREME COURT THAT SINCE TWO VIEWS EXISTED ON THE WORD PROFITS , THE ORDER PASSED BY THE ASSESSING OFFICER TAKEN ONE OF THE LEGAL POSSIBLE VIEWS, CANNOT BE BRANDED AS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE R EVENUE. HON'BLE SUPREME COURT HAS ALSO OBSERVED THAT SUBSEQ UENT AMENDMENT IN 2005, EVEN THOUGH RETROSPECTIVE WOULD NOT -: 18: - 18 ATTRACT PROVISIONS OF SECTION 263. THE OTHER CASE L AWS OF BOMBAY HIGH COURT REPORTED AT 332/42, KARNATAKA HIG H COURT REPORTED ON 341 ITR 219 FAVOURING THE VIEW TA KEN BY ASSESSING OFFICER ARE OF SUBSEQUENT DATES, THEREFOR E, IT CANNOT BE SAID THAT AS ON THE DATE THE ASSESSING OFFICER H AS PASSED THE ORDER, THE ISSUE WAS DEBATABLE. IN THIS CASE, T HERE WAS NO RETROSPECTIVE AMENDMENT OF SECTION PROVIDING COMPUT ATION OF DEDUCTION U/S 80HHC READ WITH SECTION 80IA(9). IT I S NOT THE CASE OF ASSESSEE THAT BECAUSE OF RETROSPECTIVE AMEN DMENT THE CIT HELD THE ORDER OF ASSESSING OFFICER AS ERRONEOU S. AMENDED PROVISION OF LAW WAS ALREADY THERE WHEN THE ASSESSE E HAD FILED ITS RETURN OF INCOME AND WHEN THE ASSESSING OFFICER PASSED HIS ORDER. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 31 ST AUGUST, 2012. SD/ - SD/ - (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :31 ST AUGUST, 2012. CPU* 2330.8