Per Shri Manzoor Ahmed Bakhshi J.M. - Appellant is a registered firm. Its appeal relating to assessment year 1985-86 is directed against the order dated 18-9-1990 of CIT (A), Karnal. The issue involved is as to whether Assessing Officer was justified in initiating proceedings under section 147(b) and in disallowing the claim of the assessee under section 80-I on the ground that the assessee had not filed the report of the auditors in Form No. 10CCB along with the return of income. In this case original assessment had been completed on 31st January, 1986 at an income of Rs. 5,09,786. This assessment was modified under section 154 to Rs. 4,42,000 vide order dated 7-3-1986. On the basis of the internal audit objection, Assessing Officer initiated proceedings against the assessee on the ground that deduction under section 80-I amounting to Rs. 61,379 had been wrongly allowed to the assessee. Besides a trading loss amounting to Rs. 51,581 was also considered to have wrongly been allowed to the assessee. In pursuance to the initiation of proceedings under section 147(b) a notice under section 148 had been served upon the assessee on 13-5-1988. The assessee filed a return of income o