AJAY KUMAR MITTAL, J. - (1.) IN this reference, the Income -tax Appellate Tribunal, Chandigarh Bench, Chandigarh (for short "the Tribunal"), has referred the following question of law under s. 256(1) of the IT Act, 1961 (for short "the Act"), for the asst. yr. 1987 - 88 : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that s. 147(b) was not applicable to the case of the assessee inasmuch as the information available with the AO at the time of the original assessment could not be reappraised by the AO on the ground that excessive relief had been allowed to the assessee under s. 80HHC of the IT Act -
(2.) BRIEFLY noticed, the facts are that originally the assessment was completed on an income of Rs. 4,32,910 and upon coming to the notice of the AO that the deduction under s. 80HHC of the Act has not been correctly allowed, a notice under s. 148 of the Act was issued. Thereafter, the deduction was reduced from Rs. 9,21,945 to Rs. 8,24,919. Aggrieved by the same, the assessee filed an appeal raising a plea that the action under s. 147(b) of the Act was not valid as there was no information with the AO to invoke that section. It was further pleaded that the claim had been allowed after considering the assessee's claim at the time of making the original assessment. Since there was no further material available with the AO, the action under s. 147(b) of the Act was improper. The CIT(A), however, rejected the appeal. On further appeal by the assessee to the Tribunal, the assessee's plea was accepted and the initiation of proceedings under s. 147(b) of the Act was quashed.
(3.) LEARNED counsel for the Revenue submitted that the Tribunal has wrongly proceeded on the premise that the initiation of reassessment proceedings was a result of change of opinion based on an objection raised by the auditor on an inspection note, whereas the same is contradictory to the findings recorded by the Tribunal where it was noticed that the Tribunal had felt satisfied by looking into the record that the ITO did record the reasons before initiating action under s. 147(b) of the Act and there is no reference to the audit objection or inspection note therein. Learned counsel further submitted that under cl. (c) of Expln. 1 to s. 147 of the Act, where an excessive relief has been given to an assessee, the same can be withdrawn by resorting to s. 147(b) of the Act. No one has appeared on behalf of the assessee to oppose the reference made by the Tribunal.;