Law:

Section:

Section 147 of the Income-tax Act 1961 - Income escaping assessment - General - Assessment year 1999-2000 Where assessment was reopened after four years from end of relevant assessment year to disallow assessee's claim for deduction of excise duty on stock on ground that it was not actually paid when, admittedly, this material fact was fully and correctly disclosed and available even at time of assessment itself, reopening of assessment was bad in law [In favour of assessee] The assessee had claimed deduction of excise duty on stock in bonded warehouse under section 43B from the excise duty on closing stock. Later on, the Department found that the said excise duty was not actually paid during the relevant year as the goods had not been cleared before the close of the previous year and, therefore, the contention of the Department was that such a deduction could not be claimed for that assessment year and, therefore, the Assessing Officer disallowed the said deduction in the reassessment on the reopening of the case. The Tribunal held that the reassessment having been initiated after four years from the end of the assessment year and there being no finding that there was any failure on the part of the assessee to make a full and true disclosure of material facts, the reassessment was bad in law. Held that, it was not the case of the Department that the assessee had not at all revealed the payment of excise duty, but what they had stated was that they had shown the expenditure, claiming exemption under section 43B. Since the goods were not cleared in that particular year, they ought not to have claimed the exemption during the relevant year. Admittedly, this material fact was fully and correctly disclosed and available even at the time of assessment itself. The Assessing Officer or the authority concerned had not given any reason, much less sufficient reason, to say that this matter was not brought to the knowledge of the Department and that there was a wilful suppression of material so as to treat this as an escaped assessment. The reopening of assessment, therefore, was bad in law. Arun Kurian Joseph for the Appellant. JUDGMENT B. Rajendran, J. - The assessee…

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