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3.2. The respondent was under the impression that, since, these were deemed exports, it would be entitled to deduction under Section 80 HHC of the Income Tax Act, 1961 (in short 'the 1961 Act').

3.3. We are informed by the counsel for the respondent; a fact, is not disputed by the learned counsel for the Revenue, that the returns, in the usual and normal course, were filed in respect of the aforementioned period, wherein, deduction under Section 80HHC of the 1961 Act, had been claimed qua local sales made to Rosy Jewellery Exports Limited.

6. In the first place, the deduction claimed by the assesses u/s 80HHC in respect of the local sales made to certain concerns, situated in the Export Promotion Zones (EPZ) by treating the same as 'Deemed Exports' is not at all based upon the relevant statutory provisions in this regard. Any misreading of the provisions or misinterpretation thereof cannot confer any benefit on the assesses. Neither the same can be treated as a bona fide claim. The assesses has not been able to justify his claim in the above matter by relying upon any direct decision of the jurisdictional High Court or Hon'ble Supreme Court. Neither the assesses can take shelter behind the mistake, if any, committed by the Assessing Officer in this regard, as such mistakes cannot confer any vested right in the assesses.

7. The most important and relevant fact in this case is that the claim of deduction u/s 80HHC on the alleged 'Deemed Exports' had been made by the assesses in the original returns and it was never withdrawn voluntarily by the assesses by filing revised returns before the completion of the original assessments. As a matter of fact, the assesses has neither filed revised returns of income suo motto (sic suo motu) within a reasonable time, withdrawing its claim for deduction u/s 80HHC on the alleged deemed exports, even after the appellate order was passed by the CIT(A) in the assessee's own case for the Assessment year 2001-02 on 27.08.2004. It is found that the assessee waited for the receipt of the notice u/s 148 from the Assessing Officer in the above matter. Hence, the income offered by the assessee in the returns filed in response to the notice issued u/s 148 by withdrawing the deduction u/s 80HHC to certain extent cannot be said to be a voluntary act on the part of the assessee. It is a clear case of detection of income escaping assessment owing to the wrong claim by the assessee. The payment of tax by the assessee in respect of the filing of the returns of income consequent upon the notice u/s 148 of the Act cannot be treated at par with Advance-tax. The judgement relied upon by the AR in the case of Dr.Prannoy Roy and Another -vs- CIT and Another 254 ITR 755 (SC) is clearly distinguishable on the facts of the present case, as in the above judgement, it was held by the Hon'ble Supreme Court that interest would be payable in a case, where tax has not been deposited prior to the due date of filing of the income-tax return. The increase in the quantum of interest charged u/s 234A, 234B, 234C of the Act in this case is mainly due to the increase in the total income finally assessed as per the reassessment orders. The contention of the assessee that since he has paid the tax, no interest is chargeable in this case is not in conformity with the provisions of the IT Act. The other case laws relied upon by the AR, as mentioned above, are, therefore, found to be not applicable on the facts of the present case. In view of the aforesaid facts, such as, detection of concealment of income by the Assessing Officer, non-submission of voluntary returns before the above detection and non-disclosure of true and correct income in the original returns are the relevant issues, wherein the assessee has totally failed to establish its case within the four comers of the CBDT'S Circular in F.N.400/29/2002-IT (B) dated 26.06.2006.

10. On the other hand, Mr.Jayakumar, who appears for the respondent, submits that the respondent was under a bona fide belief that, since, the local sales, which were made to a company situate in SEEPZ, could be treated as a deemed export, it would further be entitled to deduction under Section 80 HHC of the 1961 Act.

10.1. Learned counsel further submitted that, since, the necessary discretion was available to the Chief Commissioner, in terms of the Circular dated 26.06.2006, he ought to have taken into account, the said circumstances, which were obtaining in the matter and then, come to a conclusion one way or the other, as to whether or not, interest ought to be waived under Sections 234A, 234B and 234C of the 1961 Act.