N.V. Vasudevan, Judicial Member. - ITA 2898/Del/2005 is an appeal by the assessee against the order, dated 31-3-2005 of learned CIT, Moradabad, passed under section 263 of the Act, relating to the assessment year 2001-02.

ITA 3039/Del/2005 is an appeal by the assessee against the order, dated 12-4-2005 of CIT, Moradabad passed under section 263 of the Act, relating to assessment year 2002-03 ITA 3041/Del/2005 is an appeal by the assessee against the order, dated 12-4-2005 of CIT, Moradabad passed under section 263 of the Act, relating to the assessment year 2001-02.

2. All the above appeals pertain to different assessees and are directed against the order of the CIT passed under section 263 of the Act. The facts and circumstances under which the order under section 263 was passed by the CIT are identical in all the cases. The grounds of appeal raised by the assessee in all these appeals are also identical. These appeals were heard together and we deem it convenient to pass a consolidated order.

3. The assessees in all these cases are manufacturers and exporters of handicraft items. The assessee in ITA 2898/Del/2005 filed return of the income for assessment year 2001-02 on 30-7-2001 declaring total income at nil. The assessee had claimed deduction under section 80HHC and 80-IB of the Act. The case of the assessee was selected for a limited scrutiny by issue of a notice under section 143(2)(i) of the Act. The copy of the notice so issued is at page Nos. 2 and 3 of the assessee’s paper book and is dated 23-7-2002 and 30-12-2002 respectively. The only issue which was considered necessary for determination in the limited scrutiny proceedings was the deduction claimed by the assessee under section 80-IB of the Act. After seeking necessary explanation from the assessee the Assessing Officer passed order dated 10-4-2003; the Assessing Officer completed the assessment under section 143(3)(i) of the Act allowing the claim of the assessee for deduction under section 80-IB of the Act.

4. In the case of assessee in ITA 3039/Del/2005 return of income was filed on 28-10-2002 declaring total income of Rs. 2,76,210 for the assessment year 2002-03. This was later revised and the total income declared in the revised return filed on 31-3-2002 was Rs. 46,040. Assessee claimed deduction under section 80-IB in the revised return of income which was not claimed in the original return of income. The Assessing Officer issued notice dated 2-9-2003 under section 143(2)(i) of the Act. The only issue in respect of which the limited scrutiny assessment was sought to be made by the Assessing Officer was verification of claim for deduction under section 80-IB of the Act. After considering the explanation filed by the assessee the Assessing Officer allowed the claim of the assessee for deduction under section 80-IB of the Act. The order of the Assessing Officer under section 143(3)(i) of the Act was passed on 8-9-2003.

5. The assessee in ITA 3039/Del/2005 filed its return of income on 14-3-2002 for the assessment year 2001-02 declaring nil income. The assessee had claimed a deduction under section 80-IB of the Act at Rs. 74,928. His case was taken up for limited scrutiny by issue of a notice dated 5-8-2003 under section 143(2)(i) of the Act. The notice for limited scrutiny was issued only for the purpose of verification of the claim of the assessee under section 80-IB of the Act. After the assessee filed the necessary details the Assessing Officer was satisfied with the claim of the assessee for deduction under section 80-IB of the Act. The Assessing Officer passed the order under section 143(3) of the Act dated 29-12-2003.

6. The CIT, Moradabad in exercise of his powers under section 263 of the Act sought to revise the aforesaid orders passed by the Assessing Officers on the ground that they were erroneous and prejudicial to the interest of the revenue. In the case of the assessee in ITA 2898/Del/2005 there were two show-cause notices, the first one dated 27-1