Law:

Section:

â- Section 147 of the Income-tax Act, 1961 - Income escaping assessment - Position prior to 1-4-1989 - Assessment years 1978-79 and 1979-80 - Assessee-company filed its revised returns claiming deduction in respect of additional sales tax liability - Assessing Officer observing that assessee had collected sales tax and central sales tax but did not deposit same with State Government reopened assessment - Whether Tribunal was justified in holding that proceedings for reassessment were validly initiated by Assessing Officer under section 147 - Held, yes â-¡Section 4 of the Income-tax Act, 1961 - Income - Chargeable as - Assessment years 1978-79 and 1979-80 - Whether excess amount of sales tax collected by assessee, without there being corresponding liability is income liable to be taxed in hands of assessee - Held, yes FACTS The assessee-company filed its revised return claiming deductions on account of additional liability of sales tax out of the profit declared in its original return. After completion of the assessment, the Assessing Officer observed that the assessee had collected the sales tax and central sales tax on sale price of vanaspati including the amount of excise duty chargeable on vanaspati but did not deposit the same with the State Government. He was of the view that the same was liable to be included in the total income which had escaped assessment and, therefore, reopened the assessment by issuing notice under section 148. After hearing the assessee, the Assessing Officer noted that the taxable turnover, as returned by the assessee to the sales-tax department, was the same as assessed by them. Therefore, the assessee was fully aware at the time of filing of the said returns that it had collected excess sales tax. He, accordingly, treated the amount of excess sales tax and excess cost collected as assessee's income, which had escaped assessment and made an addition on that account. The Commissioner (Appeals) dismissed the appeal. On further appeal, Tribunal held that the reopening of the assessment under section 147(a) was valid and justified because of non-disclosure of true facts in regard to said sales tax liability payable for the years…

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