Law: Income Tax Act, 1961

Section: 147,148,149

Income-tax---Re-assessment---Limitation---Effect of proviso to S. 1477 --- Limitation of four years applies where there is no failure to file return or to disclose fully and truly material facts necessary for assessment---Re-assessment on ground that refund, of excise duty had not been included in original assessment because matter was sub judice---No failure to file return or to disclose material facts necessary for assessment---Limitation of four years applied---Indian Income Tax Act, 1961, Ss. 147, 148 & 149. The clear import of the proviso to section 147 of the Income Tax Act, 1961, is that where there is no default on the part of the assessee in filing the return as required under the Act, either under section 139 or in pursuance of notice under subsection (1) of section 142 or section 148 or there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the assessment-year in question notwithstanding the fact that the reason for escape of income from assessment exists, action cannot be taken after the expiry of four years from the end of the. relevant assessment year. Held, that, in the instant case, the reasons recorded by the Assessing Officer clearly disclosed that the Assessing Officer did not entertain any belief that income had escaped assessment because there had been any failure on the part of the assessee to file a return. Regular assessment had been made under section 143. The reasons also disclosed that the Assessing Officer believed that income had escaped assessment in the original assessment on account of not including the amount of refund of excise duty during the assessment year in question- because the Assessing Officer had accepted the plea of the assessee that since the matter about refund was sub-judice and the question of refund had not become final, liability to pay excise duty had not come to an end as the assessee was maintaining accounts on mercantile basis, and the said amount could not be brought to tax under section 41. However, subsequent to that, as a result of the Allahabad High Court m Swarup Vegetable Products v. CIT (1991) 187 ITR 412, the Assessing…

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