JUDGMENT :

R.K. Agrawal, J.

1. The present appeal has been preferred against the impugned final judgment and order dated 24.02.2006 passed by the High Court of Delhi in W.P.(C) No 14376 of 2005 whereby a Division Bench of the High Court, while allowing the petition filed by the Respondent herein, quashed the notice dated 10.02.2005 issued under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the IT Act’) and the order dated 17.08.2005 passed by the Income Tax Officer.

2. Brief facts:-

(a) M/s TechSpan India Private Ltd.-the Respondent is a private limited company incorporated under the Companies Act, 1956 and is engaged in the business of development and export of computer softwares and human resource services. It is also relevant to mention here that the Respondent-Company is also eligible for deduction under Section 10A of the IT Act.

(b) On 25.10.2001, the Respondent filed its return of income for the Assessment Year (AY) 2001-02 declaring a loss of Rs. 3,31,301/-. The Respondent, while filing the return for the aforementioned period, has declared its income from two sources, namely, software development and human resource development but claimed expenses commonl