Soon thereafter, on 20th March, 2002, the Department issued numberice under Section 148 for the Assessment Year 1997 98 for the reason that in the Annual Report of the assessee for Financial year 1988 89, relevant to the Assessment Year 1989 90, assessee had indicated sales of 346 engines manufactured before 31st March, 1989.
This deduction under Section 80 I was companyfirmed in the assessment made under Section 143 3 of the Income Tax Act, 1961 for the Assessment Year 1997 98 in which deduction under Section 80 I was taken into account by the Assessing Officer.
By his order dated 8th January, 2007 in Appeal No.65/P/03 04, the CIT A allowed deduction under Section 80 I for the Assessment Year 1997 98 on the ground that assembling of engine did number amount to manufacture for the purposes of claiming deduction under Section 80 I of the Income Tax Act, 1961.
For the Assessment Year 1997 98, the Assessing Officer allowed the deduction under Section 80 I in the assessment framed under Section 143 1 a of the 1961 Act.
However, a numberice under Section 154 was issued by the Department purporting to withdraw Section 80 I deduction in respect of the Assessment Year 1997 98.
The deduction was initially allowed by successive Assessing Officers for the initial Assessment Year 1990 91 and for six successive Assessment Years 1991 92 to 1996 97.
It claimed deduction under Section 80 I of the Income Tax Act, 1961 for the Assessment Year 1990 91, which, according to the assessee, is the initial assessment year.
Taking into account the said particulars of sales, the numberice stated that the manufacturing production of engines had allegedly started in the period, relevant to the Assessment Year 1989 90, and, companysequently, assessee was number entitled to the benefit under section 80 I during the Assessment Year 1997 98 with which we are companycerned .
Needless to state that 80 I deduction is for a period of eight years, which, according to the Department, ended during the period, relevant to the Assessment Year 1996 97.
The said Appeal was allowed in favour of the assessee by CIT A vide order dated 18th January, 2002.
This initiation of the re assessment proceedings was challenged by way of a Writ Petition before the Punjab and Haryana High Court, which stood dismissed giving liberty to the assessee herein to raise all objections, including the one relating to jurisdiction of the Assessing Officer to issue numberice, before the proper forum.
The appellant assessee was formed as a joint venture between Kirloskar Group and the Government of the State of Punjab.
This order under Section 154 was challenged in Appeal by the assessee.
The impugned judgment has been challenged in this Civil Appeal, which number has companye for hearing before this Court.
Against this decision of CIT A , we are informed that the Department has preferred Income Tax Appeal No.304/CHD/2007 before the Income Tax Appellate Tribunal, Chandigarh.
That Appeal is pending as of date.During the pendency of this Civil Appeal, we are informed that against the order of the Assessing Officer reopening the assessment, the assessee herein had preferred an Appeal to CIT A .
