Vide  450 ITR 1 (SC) the AO cannot choose to have parellel actions u/s154 nd 147 on the same dispute. It so happened that the assessee claimed export deduction in one year and in the subsequent year booked a bad debt against such export which prompted the AO to initiate rectification in earlier year and later also reopening action too without dropping the rectification notice.
The SC quashed the reassessment stating that it is not permissible on the part of the Revenue to initiate the proceedings under section 147/148 of the Act during the pendency of the proceedings under section 154 of the Act.
One is failing to understand why did the department were to reopen or rectify in the first instance as anyways the bad debt next year would not be allowable for failing to meet the condition of income offering in the first instance.
27 years of legal battle may have been avoided in this case by simply disallowing bad debt deduction in subsequent year to the extent it is not offered to tax in the computation on account of 80HHC relief.