(1.) Heard Mr. D. Pangam, learned counsel appearing for the petitioners and Ms. A. Razaq, learned counsel appearing for the respondent nos. 1 and 2.
(2.) Both the above petitions are taken up together as they involve the same assessee/petitioners herein raising same issue challenging the notice under Section 147 of the Income Tax Act, 1961. The assessment in Writ Petition No. 614 of 2006 is with regard to the Assessment Year 2000-2001 and Writ Petition No.615 of 2006 is pertaining to the Assessment Year 2001-2002.
(3.) The brief facts in Writ Petition No. 614 of 2006 are that the petitioners had filed their return of income for the Assessment Year 2000-2001 and thereafter a notice dated 28.08.2003 was issued under Section 147 of the Income Tax Act (herein after referred to as "the said Act") inter alia on the ground that the petitioners were not entitled for deduction under Section 10B of the said Act, as the activities carried out by the petitioners were not 100% export oriented unit. The petitioners filed their reply inter alia disclosing that the petitioners were carrying out 100% export oriented unit and as such entitled for deduction in terms of Section 10B of the said Act. The Assessing Officer after minutely examining the contention by order dated 15.02.2005 accepted the explanation of the petitioners and allowed deduction in terms of Section 10B of the said Act. On 28.11.2005 the respondents served another notice under Section 147 of the said Act inter alia contending that the petitioners were not entitled for deduction under Section 10B of the said Act on the ground that they were not carrying out manufacture or production business to avail of the benefits of the said provisions. The petitioners informed the respondents to treat the earlier return as return in terms of Section 147 of the said Act and called upon the respondents to furnish the reasons to the petitioners. But however, no reasons were communicated by the respondents for reopening of the assessment and as such the petitioners filed the above petition inter alia seeking to quash the notice under Section 147 of the said Act. In the meanwhile, the respondents sought permission of this Court to complete the assessment which was allowed subject to further orders in the above petition. In the Assessment Order, the respondents came to the conclusion that the petitioners were not carrying out any manufacture or production and as such were disentitled for deduction under Section 10B of the said Act and accordingly, the deduction allowed in the earlier assessment order came to be disallowed and added for the purpose of computing taxable income. The petitioners thereafter amended the petition and also raised a challenge to the said assessment carried out by the respondents.