TaxTMI 
TaxTMI 
2007 (6) TMI 204
X X X X Extracts X X X X
X X X X Extracts X X X X
....claimed deduction under Section 80HHC for both the assessment years1995-96 and 1996-97. The Assessing Officer while making the prima facie adjustment under Section 143(1)(a) of the Act, set off the business loss arrived under Section 80HHC(3) and accordingly by assessment orders dated 30.10.1996 restricted the deductions to Rs.11,29,091/- and Rs.5,03,209/- for the assessment years 1995-96 and 1996-97 respectively. Against the said assessment orders dated 30.10.1996, the assessee preferred appeals before the Commissioner of Income-Tax (Appeals), who by common order dated 24.11.1998, allowed the appeals accepting the contention of the assessee that the Assessing Officer while exercising the power under Section 143(1)(a) ought not to have set ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....apt to refer Section 143(2)(i) and (ii) of the Act, which provides for notice on the assessee calling for his evidence or objections. Section 143(2): Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer shall, (i) where he has reason to believe that any claim o loss, exemption, deduction, allowance or relief made in the return is inadmissible, serve on the assessee a notice specifying particulars of such claim of loss, exemption, deduction, allowance or relief and require him, on a date to be specified therein to produce, or cause to be produced, any evidence or particulars specified therein or on which the assessee may rely, in support of such claim: ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed assessment years, had not even provided an opportunity to the assessee nor called on the assessee for his evidence or objections as contemplated under Section 143(2)(i) and (ii) of the Act, as referred to above, which is mandatory. The non compliance of such procedure contemplated under Section 143(2)(i) and (ii) of the Act, is a gross violation to the very spirit and scope of the prima facie adjustment provided under Section 143(1)(a) of the Act. Consequently, the refusal of deduction under Section 80HHC(3) for both the relevant assessment years is also illegal., because again it is trite law that the question of relief under Section 80HHC of the Act is a debatable issue and the same does not fall within the purview of prima facie....