Case Law Details
RELEVANT PARAGRAPH
7. We have considered the issue. The learned CIT (A) has considered that there was a change of opinion by the A.O. and he deemed to have formed an opinion at the time of original assessment on allowing 80HHC deduction on DEPB. There is nothing on record to support the opinion formed by the learned CIT(A) on this issue. The learned counsel during the present proceedings could not point out any show cause letter or clarification sought by the A.O. on the issue of DEPB income and has relied on only legal issues before us. There is no evidence that the A.O. has at least sought clarification or considered the issue of DEPB at the time of original assessment. As seen from the order under section 143(3) passed on 28.02.2003 the issue which was discussed in the order was with reference to manufacturing/ processing of goods and recomputation on that basis and in that recomputation in page 10, 90% of the incentives were considered in the working. Except this mention of the incentives in the working, nowhere there was any discussion about the nature of incentives or the incentive being DPEB income. Only the A.O. considered 90% of the incentives at Rs.77,59,495/ – in the working of deduction under section 80HHC (3) based on the Audit report submitted by the assessee. In view of this it cannot be said that the A.O. has considered the issue of DEPB and has decided the issue at the time of completion of original assessment. If the A.O. makes enquiry, asks for some clarifications/ details/working of claims or computation one can consider that the A.O. made an enquiry and formed an opinion to accept assessee’s contention. In this case there is no evidence that the A.O. had at least made any enquiry with reference to the nature of incentives, more so of DEPB. The incomes as reflected in Audit report have been considered in the revised working in the said order. In view of this we are not persuaded by the logic of the learned CIT(A) that once the assessment has been completed by the A.O. and the claim was allowed, he has deemed to have formed an opinion. If that being so the provisions of Explanation 2(c) becomes redundant. Explanation 2(c) is as under: –
“Explanation 2. —For the purposes of this section, ………….
(a) …………………………
(b) …………………………
Please become a Premium member. If you are already a Premium member, login here to access the full content.
