Law:

Section:

Section 147 of the Income-tax Act, 1961 - Income escaping assessment - Position after 1-4-1989 - Assessment year 1994-95 - It was specifically set out in return of income filed by assessee that excise duty on finished goods and customs duty on raw materials and components lying in bonded warehouse on 31-3-1994 were neither provided for in books nor included in valuation of closing stock as per practice consistently followed by assessee - Method adopted by assessee had been accepted by revenue in subsequent years - Whether when method of accounting followed by assessee had been accepted by revenue for subsequent years, there was no reason to believe that income had escaped assessment so as to empower Assessing Officer to initiate proceedings under section 148 for assessment year in question - Held, yes Section 145 of the Income-tax Act, 1961 - Method of accounting - Valuation of stock - Assessment year 1994-95 - Whether taxable event for purpose of excise duty is date of manufacture, but as held by Apex Court in case of CCE v. Polyset Corpn. [2000] 10 SCC 241, relevant date for payment of excise duty is date of clearance of excisable goods and not date of manufacture of excisable goods - Held, yes FACTS For the assessment year 1994-95, the assessee filed the return and it was specifically set out in the return of the income that excise duty on finished goods and the customs duty on raw materials and components lying in the bonded warehouses were neither provided in the books nor included in the valuation of closing stock as per the practice consistently followed by the assessee. The same were accounted at the time of clearance of goods and that accounting statement had no impact on the profits. The Assessing Officer passed the assessment order under section 143(3) accepting the return. The Assessing Officer later issued a notice under section 154 seeking to rectify the assessment on account of the excise duty and customs duty, being not included in valuing the closing stock. However, being satisfied with the assessee's explanation, the Assessing Officer dropped the rectification. Later by a notice under section 148, the Assessing Officer sought to reopen the…

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