AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (8) TMI 644
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....on 147 of the Income Tax Act (herein after referred to as "the said Act") inter alia on the ground that the petitioners were not entitled for deduction under Section 10B of the said Act, as the activities carried out by the petitioners were not 100% export oriented unit. The petitioners filed their reply inter alia disclosing that the petitioners were carrying out 100% export oriented unit and as such entitled for deduction in terms of Section 10B of the said Act. The Assessing Officer after minutely examining the contention by order dated 15.02.2005 accepted the explanation of the petitioners and allowed deduction in terms of Section 10B of the said Act. On 28.11.2005 the respondents served another notice under Section 147 of the said Act inter alia contending that the petitioners were not entitled for deduction under Section 10B of the said Act on the ground that they were not carrying out manufacture or production business to avail of the benefits of the said provisions. The petitioners informed the respondents to treat the earlier return as return in terms of Section 147 of the said Act and called upon the respondents to furnish the reasons to the petitioners. But however, no r....
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....ly to the said two petitions inter alia contending that the petitioners were not entitled for deduction under Section 10B of the said Act. It is the case of the respondents that the petitioners were not 100% export oriented unit and further they were not carrying out any production and further that the activities which were carried out by the petitioners do not come within the meaning of production as provided under Section 10B of the said Act. It is further pointed out that the petitioners also have an alternate remedy to challenge the Assessment Order carried out pursuant to the notice under Section 147 of the said Act and as such, the question of interference in the impugned Assessment Order would not arise. The respondents further contend that as there was an escape income while carrying out the regular assessment, the respondents were justified to issue the notice under Section 147 of the said Act. It is further pointed out that the petitioners do not meet the requirements of Section 10B of the said Act on the ground that the petitioners were not exporting themselves but through some other entities. 6. Mr. Pangam, learned counsel appearing for the petitioners poin....
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.... said Act. The learned counsel as such submits that the subsequent notice under Section 147 of the said Act is untenable in law and cannot be sustained. The learned counsel further pointed out that in view of the judgment of the Apex Court relied upon by the petitioners, the respondents have no justification to proceed with the proceedings under Section 143 of the said Act. The learned counsel as such points out that the petitioners were entitled for the relief in both the above petitions. 7. On the other hand, Ms. A. Razaq, learned counsel appearing for the respondent nos. 1 and 2 has submitted that the petitioners have an alternate remedy and as such, it is open for the petitioners to raise the challenge to the Assessment Order before the Appellate Forum. The learned counsel further pointed out that as there was an escape income in the Assessment Years 2000-2001 and 2001-2002, the respondents were justified to issue the notice under Section 147 of the said Act. It is further pointed out that the escape assessment is on the basis that the petitioners were not carrying out any production within the meaning of the provisions of Section 10B of the said Act. The learned counsel fur....
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....he petitioners, this is not a case of an escape assessment but a clear case of difference of opinion which cannot be a ground for reopening under Section 147 of the said Act. Apart from that, the undisputed fact of the case reveals that the respondents had not furnished the reasons to the petitioners after they were called upon to do so. On this ground also the subject proceedings under Section 147 of the said Act stands vitiated. 11. With regard to the contention of the learned counsel appearing for the respondent nos. 1 and 2 that the petitioners have an alternate remedy, we find that in the present case the Assessment Order was passed only during the pendency of the above petitions which necessitated the petitioners to raise a challenge in the present petitions. Considering the view we have taken while examining the validity of the notice under Section 147 of the said Act, we find that the question of considering the correctness of the Assessment Order was not at all necessary. But however, on perusal of the impugned Assessment Order pursuant to the subject notice under Section 147 of the said Act, we find that the deduction under Section 10B of the said Act was refused to....