TaxTMI 
TaxTMI 
2011 (1) TMI 611
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....ngs initiated under section 154 and then proceed to make an income escaping assessment under section 147 of the Income-tax Act for the same assessment year. The return filed was processed under section 143(1) and in the intimation sent, deduction claimed on export profit under section 80HHC was allowed in terms of the claim. However, the Assessing Officer later noticed that excessive relief is granted while computing deduction under section 80HHC inasmuch as while computing the eligible relief, deduction was not made of 90 per cent. of the items of income falling under Explanation (baa) to section 80HHC(4C). Initially he proceeded to bring to tax the excessive relief granted by initiating rectification proceedings under section 154. A notic....
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....(Appeals) allowed the appeal on both grounds, against which the Revenue filed appeal before the Tribunal. The Tribunal based on the decision of the Supreme Court in Asst. CIT v. Rajesh Jhaveri Stock Brokers P. Ltd. reported in [2007] 291 ITR 500 held that an intimation under section 143(1)(a) itself is an assessment which could be revised through an income escaping assessment under section 147 of the Act. The Tribunal accordingly upheld this ground raised by the Revenue and held in their favour. However, the Tribunal still dismissed the appeal by upholding the finding of the Commissioner of Income-tax (Appeals) based on the decision of the Madras High Court abovestated that after initiation of rectification proceedings under section 154, th....
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....ef granted in the computation of relief under section 80HHC is a mistake that could be rectified under section 154 and following the mandatory requirement contained under section 153(3) of the Act, notice was issued to the assessee. The assessee brought to the notice of the Assessing Officer that there is no apparent mistake in the proceedings issued and so much so, the assessment cannot be rectified. The Assessing Officer apparently accepted the objection raised by the assessee and gave up the proceedings initiated under section 154. But the assessee was not informed that the proceedings initiated under section 154 were dropped. However, after expiry of the period provided for rectification of assessment under section 154, the Assessing Of....
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....essing Officer initiated rectification proceedings under section 154 does not mean that he should stick to the same only and proceed to issue orders as proposed. The very purpose of issuing a notice to the assessee is to give him an opportunity to raise objection against the proceeding which includes the assessee's right to question the maintainability of the rectification proceedings. If the assessee convinces the officer that the rectification is not permissible, the Assessing Officer is absolutely free to give up the same and see whether there is any other recourse open to him to achieve the purpose i.e., to bring to tax escaped income. In this case even though the Assessing Officer did not issue any specific order dropping the proceedin....