- (1.) WE have heard Shri Dhananjay Awasthi, learned counsel appearing for the appellant. Shri Ashish Bansal appear for the respondent-assessee.
(2.) THE Commissioner of Income Tax (Central) Kanpur has filed this Income-tax Appeal under Section 260-A of the Income Tax Act, 1961, (in short, the Act) against the judgment and order dated 25.1.2008 passed by Income Tax Appellate Tribunal, Lucknow Bench 'B', Lucknow in ITA No. 852/Luc/04 for assessment year 1997-98, on the questions of law for consideration by this Court as follows:- "(i). Whether the Hon'ble ITAT was justifiable in law in annulling the assessment. (ii) Whether the Hon'ble ITAT was justifiable in law in holding that the material fact was on record and the assessment could not be re-opened after lapse of four year from the end of the relevant asstt. year." Brief facts, giving rise to this appeal, are that a return of income was filed by the respondent-assessee company under Section 139 (1) of the Act on 29.8.2007, disclosing income of Rs. 3, 42, 36, 480/-. The assessee claimed deduction under Section 80HHC of the Act of Rs.92,44, 415/- and under Section 80IA of Rs. 2, 53, 62, 614/-. A report in form No. 10CCB was filed in respect of deductions claimed under Section 80HHC including the rental income, the interest income, duty draw back and export license premium. The depreciation was included in the income for the purpose of calculation. The income was disclosed as Rs. 8, 45, 42, 046/-, though the depreciation was not mentioned in the profit and loss account. The net profit was shown at Rs. 7, 81, 95, 412/-. The respondent-assessee claimed deduction @ 30% under Section 80IA of the Act on the net profit, as increased by the depreciation in the computation of income. The assessment was completed under Section 143 (3) on 31.3.2000 on the income of Rs. 4, 31, 50, 065/- after deduction under Section 80 HHC was reduced from Rs. 92, 44, 415/- to Rs. 78, 84, 859/-, after applying the depreciation on profit, against the claim made on the profit as enhanced by the depreciation amount.
(3.) A revised return was filed by the respondent-assessee on 17.6.2002, showing income of Rs. 4, 51, 51, 210/-, taking the correct position of adopting the net profit after allowing depreciation for calculating the deductions under Section 80HHC, and also excluding the interest and rental income for that purpose. The assessee deducted the depreciation, rent and interest from the profit but did not deduct the duty draw back loss in export trading, and licence premium in calculating the deductions under Sections 80IA. The Assessing Officer treated the return dated 17.6.2002 as non-est as it was filed beyond the prescribed period. He, however, considered the non-est return as the information for re-opening the assessment and issued notice under Section 148 on 4.7.2002, after obtaining approval of Commissioner of Income Tax. The re- assessment order was passed on 22.1.2003 on total income of Rs. 4, 75, 29, 000/-.;