COMMISSIONER OF INCOME TAX Vs. EVELINE INTERNATIONAL

JUDGEMENT

(1.) This is an application under s. 256(2) of the IT Act, 1961 (for short "the Act") seeking a direction to the Tribunal, Chandigarh Bench (for short "the Tribunal") to draw up a statement of the case and refer the following questions of law arising out of its order, dt. 7th December, 1995, to this Court :

(2.) The assessee had filed its return of income for the asst. yr. 1987-88 on 30th June, 1987 declaring an income of Rs. 20,79,206. The assessment was, however, framed at an income of Rs. 21,21,037 vide order, dt. 31st March, 1989 passed under s. 143(3) of the Act. In the return the assessee had claimed deduction under s. 80HHC at Rs. 45,94,000 on the basis of the calculations made by the auditors in their report as prescribed under the Act. This is an admitted fact that while framing assessment under s. 143(3) the AO had not examined these calculations and had accepted the same as such. Subsequently the AO issued a notice under s. 154 on the ground that the deduction under s. 80HHC had been wrongly computed in following respects :

(3.) In response to the above notice the assessee furnished a reply justifying the calculation made by the auditor and thereby submitting that there was no mistake apparent from the record which could be rectified under s. 154 of the Act. The explanation of the assessee, however, was rejected and the AO vide order under s. 154 of the Act, dt. 29th January, 1990 reduced the deduction under s. 80HHC from Rs. 45,94,000 to Rs. 37,68,101.