TaxTMI 
TaxTMI 
2004 (4) TMI 274
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....ade under section 143(1) for all these years. At this stage, it may be mentioned that no disallowance was made by the Assessing Officer while processing the return under section 143(1) in respect of assessment years 1998-99, 1999-2000 and 2000-2001 while such deductions were disallowed in respect of assessment years 1995-96 and 1997-98 which were deleted in the appeal proceedings. Subsequently, it appears from the assessment order for assessment year 1998-99 that Office of the Accountant General, UP, pointed out that such deduction was not allowable in view of the CBDT instruction No. 1774 dated 14-10-1997. Accordingly, directions were issued from the Office of the Additional Commissioner of Income-tax, Dehradun vide letter dated 1-2-2001 to the Assessing Officer for taking necessary action for re-opening the assessment. Accordingly, the notices under section 148 were issued to the assessee in respect of all these assessment years. Thereafter, after giving opportunity to the assessee, the deduction claimed by the assessee against incentive bonus was disallowed for all these years under consideration. All the orders of the Assessing Officer were upheld by the CIT(A). Aggrieved by th....
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.... the Assessing Officer to re-open the assessment if he has reason to believe that income chargeable to tax had escaped assessment as a consequence of information in his possession. The judgment of apex court in the case of Indian and Eastern Newspaper Society, 119 ITR 996 was based on the interpretation of the word "information" as appearing in section 147(b) prior to amendment. The apex court held that audit objection on interpretation of a provision did not amount to information within the ambit of section 147(b) and, therefore, the assessment could not be re-opened on such audit objection. This judgment was followed by their Lordships in the case of Lucas TVS Ltd. The Gujarat High Court judgment in Kaira District Cooperative Milk Producers Union Ltd.'s case is not on the point before us. However, it is mentioned that the said judgment also considered the old provisions of section 147(a). The judgment of the Supreme Court in the case of P.V.S. Beedis (P.) Ltd. relied upon by the learned DR is also not on the point before us since it was also delivered in the light of old provisions under section 147(b) wherein it was held that audit note regarding factual error constitute ....
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.... with the judgments of the majority of the High Courts then it can be said that income of the assessee has escaped assessment. However, none of the party has brought to our notice any judgment of High Court or Tribunal directly on this issue. 7. Admittedly, there is divergence of opinion on the issue whether deduction can be allowed against the incentive bonus received by the Development Officer employed with an insurance company. Majority of the High Courts i.e. High Courts of Punjab & Haryana, Rajasthan, Orissa, Andhra Pradesh, Madras and Bombay have taken the view that such incentive is part of salary and therefore, no deduction can be allowed against such incentive except standard deduction. On the other hand, Gujarat High Court has dissented from such view by holding that profits in lieu of salary under section 17 would include net profits and not the gross receipts and, therefore, assessee is entitled to deduction on account of expenditure in earning of such incentive. Various benches of the Tribunal in the past had also accepted such stand of the assessee and the High Court had refused to interfere with the finding given by the Tribunal. The issue is still pending before ....
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....inal assessment, especially when the method of computation adopted at the time of original assessment was permissible in law. The fact that the adoption of a different method of computation would have resulted in higher yield of tax would not in such a case justify the reopening of the assessment." The perusal of the above observations clearly shows that there must be an error in the order of assessment for the purpose of re-opening under section 147(b). If the order of the Assessing Officer is in accordance with one of the two methods available to the Assessing Officer then it cannot be said that the order of Assessing Officer was erroneous and accordingly, such assessment could not be re-opened merely on the ground that the other method was advantageous to the revenue. 9. The other judgment of the Hon'ble Supreme Court is in the case of CIT v. G.M. Mittal Stainless Steel (P.) Ltd. [2003] 263 ITR 255 wherein it was held that where the Assessing Officer passed an order in accordance with decision of High Court, then such order could not be considered as erroneous for the purpose of assumption of jurisdiction under section 263 even though such decision of the High Court ha....