- (1.) This writ challenges several notices, all dated 15-2-2005 under Section 148 of the Income-tax Act, 1961 (hereafter "the Act") covering assessment years 1998-99, 1999-2000, 2000-01 to 2001-02. It also challenges an order dated 29-12-2005 by the Income-tax Authority negativing the objection made by the writ Petitioner/Assessee against the said reassessment proceeding initiated under Section 147 of the Act. By that decision the revenue proposed to proceed with the said reassessment proceedings. Thereafter, this writ was filed which now comes up for final determination. There is an interim order dated 24-2-2006 restraining the revenue from proceeding with such assessment.
(2.) The whole question in this writ application revolves around the interpretation to be given to Section 80IB(5) of the Act read with Sub-section (2) defining an industrial undertaking. This section of the Act provides for specified deduction from the profits of an industrial undertaking situated in an industrially backward district as notified by the Central Government, while computing its income. Industrial undertaking is to be taken according to the statute as one which is engaged in manufacture. In this case, there is no dispute that an establishment of the writ Petitioner/Assessee is situated in an industrially backward district. But the dispute is with regard to its being treated as engaged in "manufacture".
(3.) The writ Petitioner/Assessee is engaged in production of "cattle and poultry feed" in their said establishment. This cattle and poultry feed is produced from raw materials, purchased by them like Maize, Soya and other ingredients. According to the revenue, this production of "cattle and poultry feed" cannot be classified as manufacture to enable the writ Petitioner/Assessee to avail of the benefit of Section 80IB(5) of the Act. Hence, according to the revenue, the grounds for reopening assessment under Section 147 have been made out and notices were appropriately issued. According to the writ Petitioner/Assessee, they had always been treated as manufacturer of cattle and poultry feed by the revenue in past assessments, which include scrutiny assessment. There is description of the writ Petitioner/Assessee by the Assessing Officer as a manufacturer of such feed. Therefore, on such satisfaction assessments were made for those years. Therefore, on the date when the said notice under Section 148 of the Act was issued, there was no scope for any change of opinion for reopening the assessment. It was urged before me that this question of manufacture of "cattle and poultry feed" by the writ Petitioner/Assessee was the opinion held by the Assessing Officers in making the earlier assessments which have become final and conclusive or opinion held in those assessment years where returns have been filed and no assessments had been made. Therefore, just because there was a change of opinion of one officer regarding the status of the writ Petitioner/Assessee as a manufacturer, the proceedings could not be reopened. As such they are invalid and should be so declared by this Court.;