Devinder Kumar Jain JUDGMENT
Arijit Pasayat, J.
1. Leave granted.
2. Challenge in this appeal filed by the revenue is to the correctness of the decision rendered by a Division Bench of the Gujarat High Court allowing the Special Civil Application filed by the appellant.
3. Background facts in a nutshell are as follows:
4. The respondent-a Private Limited Company filed its return of income for Assessment year 2001-02 on 30th October, 2001 declaring total loss of Rs. 2,70,85,105/-. The said return was processed under Section 143(1) of the Income Tax Act, 1961 (in short the 'Act') accepting the loss returned by the respondent. Notice under Section 148 of the Act was issued on the ground that claim of bad debts as expenditure was not acceptable. On 12th May, 2004 a return of income declaring the loss at the same figure, as declared in the original return, was filed by the respondent under protest. Copy of the reasons recorded was furnished by the appellant on the respondents request some time in November, 2004. The respondent raised various objections, both on jurisdiction and merits of the subject matter recorded in the reasons. On 4th February, 2005 the appellant disposed of the objections holding that the initiation of reassessment proceedings was valid and he had jurisdiction to undertake such an exercise. It is in the aforesaid backdrop of facts that the impugned notice under Section 148 of the Act dated 12th May, 2004 was challenged by the respondent.
5. The High Court allowed the writ petition following the decision of the High Court in Adani Exports v. Deputy Commissioner of Income Tax (Assessment) 
MANU/GJ/0106/1998 : [1999]240ITR224(Guj) .
6. In support of the appeal learned Counsel for the appellant submitted that the factual position involved in Adani Exports- case (supra) was entirely different. That was a case relating to Section 143(3) of the Act and the present case relates to Section 143(1) of the Act. It is pointed out that return was filed by the respondent for the concerned assessment year i.e. 2001-2002 on 30.10.2001. The return was processed under Section 143(1) of the Act on 26.11. 2001. The revenue audit raised an objection relating to a debit of Rs. 1285.72 lakh as bad debt out of total expenditure of Rs. 1307.64. Since the conditions stipulated under Section