- (1.) ALL these eighteen appeals arise out of the common order of the ITAT, and have been admitted by different orders of this Court, by framing following substantial questions of law: 1. Whether an intimation of tax computation issued under Section 143(1) by the Assessing Officer on the claim to deduction under Section 80IA/80IB made by the assessee in his return, could be rectified under Section 154 for raising a demand by invoking Section 115JA/115JB of the Income Tax Act, 1961 as existed during the relevant assessment year? 2. If so, whether in absence of any computation of book profit as defined under Explanation to Section 115JA/115JB on record, the Assessing Officer could assume the amount of Book Profit for invoking 115JA/115JB by ignoring the claim of the assessee to deduction under Section 80IA/80IB? 3. Whether computation of 'Book Profit' for the purpose of Section 115JA/115JB and determining the claim of assessee to benefit under Section 80 IA/80IB could at all be undertaken by the Assessing Officer under Section 143(1)? 4. If so, whether the amount allowable as deduction under Section 80IA/80IB, can at all form part of 'Book Profit' in view of Clause (v) of Explanation to Section 115JA/115JB?
(2.) THE necessary facts are, that the returns were filed by the assessee for different assessment years, which were processed under Section 143(1), thereafter, the Audit Party raised an objection to the effect, that according to the provisions of Section 115JA/115JB, calculation of income was required to be made, but since, that has not been done, a notice under Section 154/155 of the Income Tax Act was given to show cause as to why the liability may not be increased, and after receiving the representation, the learned Assessing Officer, in all the cases, passed orders, purportedly exercising powers under Section 154, calculating the income at the rate of30% of the book profit, and the assessee was required to pay tax, at the rate of 35%, along with the interest and surcharge. Against these orders, appeals were filed, and the same were dismissed by the learned Commissioner (Appeals). Then, all the matters were carried to the Tribunal, and the learned Tribunal held, that the provisions of Section 143 and 154 have been amended by the Finance Act of 1999, whereby, the provisions were modified, and prima facie adjustments, additional tax, and issue of limitation etc. were done away with. Then, after the amendment, mere filing of the return by itself would complete the process of assessment, limiting its scope only to raise demand and issue refund on the basis of the return filed, except for issuing intimations where any sum is payable by the assessee or refund is due to him, the acknowledgments shall be deemed to be intimation, and simultaneously, amendments were also made in Section 154 to provide for rectification of intimation or deemed intimation referred to in the proposed Sub -section (1) of Section 143.
(3.) THEN , the learned Tribunal noticed this submission of the assessee, that Section 115JA provides, that for the purpose of determining the 'book profit', from the total profits, amount by which the net profit has to be reduced, also consists of the amount of profits derived by an industrial undertaking located in an industrially backward State or District, referred to in Sections 80 -IA and 80IB, such industrial undertaking is eligible to claim a deduction of100% of the profits and gains under Sub -section 80 -IA(5) with effect from1.4.2000, and under Section 80IB(4) or Section 80IB(5). Then, it was noticed that the contention of the assessee is, that the assessee company is an industrial undertaking, situated/located in the backward industrial State of District, therefore, whatever the income earned by the industrial undertaking is, it is 100% exempted from tax, as per the provisions of Section 80 -IA(2)(iv)(c) of the Income Tax Act, and therefore, for the purpose of determination of 'book profit' as per Section 115JA, the100% exempted income, derived from such industrial undertaking, is required to be deducted, which aspect has not been considered by the Assessing Officer, otherwise, there would been no need to pass the order under Section 154 of the Income Tax Act.;