Law:

Section:

Section 147 of the Income-tax Act, 1961 - Income escaping assessment - Non-disclosure of primary facts - Assessment years 1997-98 to 2000-01 - Whether merely because Assessing Officer feels that he has failed to do what he ought to have done in original assessment proceedings, it can be a valid ground for seeking initiation of reassessment proceedings under section 147/148 - Held, no - For relevant assessment year, assessee's case was selected for scrutiny and queries were raised from time-to-time by Assessing Officer during course of assessment proceedings which were duly replied to by assessee to satisfaction of Assessing Officer - Assessments were completed under section 143(3) - Thereafter, Assessing Officer issued notices under section 147/148 on grounds that there was suppression of sales; that excess depreciation had been allowed on certain assets; and that assessee was inadvertently allowed claim of deposits made in respect of employees' contribution towards PF and ESI schemes, which were deposited beyond due date stipulated for that purpose in respective statutes - Whether since reasons given for reopening assessment simply relied upon record which was already available before Assessing Officer while completing assessment proceedings under section 143(3), there was no scope for reassessment proceedings and, therefore, impugned notices were liable to be quashed - Held, yes FACTS The assessee-company was engaged in the business of rice and was also trading in pulses, rice, etc. For the assessment years in question, it had filed its returns of income. Thereafter, the case was selected for scrutiny and queries were raised from time-to-time by the Assessing Officer during the course of the assessment proceedings, which were duly replied to by the assessee to the satisfaction of the Assessing Officer. On providing the necessary details, clarifications and information to the Assessing Officer, the assessments with respect to those assessment years were completed under section 143(3). Thereafter, the Assessing Officer issued notices under section 147/148 on the grounds that when average rate of closing stock was applied to the quantity of sales during the…

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