Law:

Section:

Section 148 of the Income-tax Act, 1961 - Income escaping assessment - Issue of notice for Reopening of assessment concluded under section 143(3) on basis of search on ground that value of scrap generated was not correctly disclosed, was not justified where Tribunal had found that material information was available with Assessing Officer when assessment was made under section 143(3) The assessee's assessment was completed under section 143(3). Later on, a search was carried out and a statement was recorded under section 132(4). From the said statement it was noticed that the brass scrap and plastic powder scrap generated in the manufacturing process was of significant quantity and value. On the basis of the observations made by the search party and from the statements of directors/partners, who were examined, it was noticed that the brass scrap was about 45 per cent of the total consumption of brass item and plastic scrap could be as much as 12 per cent of the consumption of plastic powder and that for the assessment year 1977-78, the assessee had not shown any value of scrap. On the ground that there was suppression of profits by non disclosure of scrap, the assessee's assessment was reopened. Held that the Tribunal had accepted the manner in which the scrap generated was disposed of. It was no doubt true that the stock register of the scrap generated was not maintained. But the information was available to the Assessing Officer when the assessment was made under section 143(3). Therefore, there were no reasons to believe warranting the reopening of the concluded assessment. JUDGMENT F.I. Rebello, J.-The petitioners by the present petition have challenged the notices issued under section 148 for reopening of assessments for the assessment years 1977-78 and 1978-79. The notices are dated March 30, 1989. The reasons for the reassessment have been annexed to the reply filed by the respondents as annexures to the affidavit of Mr. Y.S. Sonawane. It is recorded therein that the search operations were carried out in the concerns belonging to the petitioner and the group companies and the employees were examined. Their statements were also recorded under section…

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