Appeal allowed due to invalid reassessment under section 147, Revenue's appeal dismissed.

The Tribunal allowed the assessee's appeal by quashing the reassessment proceedings initiated under section 147, deeming them invalid as they were based on a change of opinion. Consequently, the Tribunal did not need to adjudicate on the restriction of relief under section 80HHC. The Revenue's appeal was dismissed as a result of the annulment of the assessment order in the assessee's appeal.

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Issues Involved:
1. Validity of reassessment proceedings under section 147 of the Income Tax Act.
2. Restriction of relief under section 80HHC while computing book profit.

Detailed Analysis:

1. Validity of Reassessment Proceedings under Section 147:
The primary issue raised by the assessee was the validity of the reassessment proceedings initiated under section 147 of the Income Tax Act. The assessee contended that the reassessment was based solely on a change of opinion, which is not permissible under law. The original assessment order dated 29/12/2006 had already addressed the issue of deduction under section 80HHC and book profit. The assessee argued that all relevant details were before the Assessing Officer (AO) during the original assessment, and the AO had applied his mind to these details.

The Tribunal noted that the Commissioner of Income Tax (Appeals) [CIT(A)] had dismissed the ground of appeal concerning the validity of reassessment by terming it as general in nature. However, the Tribunal emphasized that questions of jurisdiction must be adjudicated and cannot be dismissed as general. The Tribunal found that the reopening of the assessment was indeed based on a change of opinion, as the AO had already considered the deduction under section 80HHC and the computation of book profit during the original assessment.

The Tribunal cited several judgments, including those of the Hon'ble Gujarat High Court and the Hon'ble Supreme Court, to support the view that reassessment based on a mere change of opinion is not permissible. The Tribunal concluded that the reassessment proceedings were invalid and quashed the assessment framed under section 143(3) read with section 147.

2. Restriction of Relief under Section 80HHC while Computing Book Profit:
The second issue was the restriction of relief under section 80HHC while computing book profit. The assessee argued that the CIT(A) had erred in restricting the relief under section 80HHC merely because the assessment was reopened under section 147. The assessee contended that the CIT(A) had accepted that the assessee was entitled to higher relief based on the Supreme Court's decision in CIT v. Ajanta Pharma Ltd.

Since the Tribunal had already quashed the reassessment proceedings, it did not adjudicate on this issue separately. The Tribunal allowed the assessee's appeal in full, thereby addressing the assessee's concerns regarding the restriction of relief under section 80HHC.

Conclusion:
The Tribunal allowed the assessee's appeal by quashing the reassessment proceedings initiated under section 147, deeming them invalid as they were based on a change of opinion. Consequently, the Tribunal did not need to adjudicate on the restriction of relief under section 80HHC. The Revenue's appeal was dismissed as a result of the annulment of the assessment order in the assessee's appeal.

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