TMI Blog2008 (6) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Petitioner. Manish R. Bhatt for the Respondent. JUDGMENT The judgment of the court was delivered by D.A. MEHTA J. - This petition challenges notice issued under section 148 of the Income Tax Act,1961 ('the Act') dated 19.03.1999 for Assessment year 1988-89. 2. The petitioner, a Public Limited Company is engaged in the business of manufacturing Carbon-black. On 17.03.1998 search proceedings took place under section 132 of the Act. After detailed inquiry calling for various details and evidence on the basis of discrepancies found during the course of search operation the assessing officer recorded as under: "Since the assessee has already taken into account all the expense relating to purchase, mfg. and sales, as su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is any failure as stipulated by the Proviso to Section 147 of the Act as can be seen from the reasons recorded which form part of the Affidavit-in-Reply tendered by the respondent authority. That in fact, in relation to the so called excess stock of carbon-black valued at Rs.21,36,131/- the authorities had after application of mind and scrutiny given the set-off as can be seen from the discussion in the assessment order and hence the impugned notice was bad in law. In support of the submissions made reliance has been placed on the following two decisions of this Court: Mohamed Nasim Abdul Razak Mistry v. Wealth Tax Officer - (1995) 216 ITR 104(Guj); and Swastik Engineering and Manufacturing Co. Pvt. Ltd. v. Income Tax Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k as per books of account on the date of search by Rs. 26,59,600/-. Out of total excess stock found, excess stock of finished goods (carbon black) weighing 136.234 MT valued at Rs.21,36,131/- was found. As per order dated 30.12.96, addition of Rs.3,26,69,900/- was made on account of low yield of carbon black. However, the value of excess stock of carbon black of Rs.21,36,131/- found at the time of search was reduced from the addition on account of low yield considering that the excess stock of carbon black found was part of the low yield determined. No separate addition on account of excess stock found of carbon black was made. A perusal of the case records reveals that the assessee has neither shown the sale of this stock of finished g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. In the aforesaid set of facts and circumstances of the case it is not possible to state that there is any failure on part of the assessee to fully and truly disclose all material facts relevant for the assessment of the assessment year in question. At the most, it can be termed to be a case wherein the assessing officer has formed an incorrect opinion as per opinion of the successor assessing officer. In the circumstances, the successor assessing officer cannot treat the assessee to be in default of non-disclosure. Considering the fact that admittedly the impugned notice under section 148 of the Act is issued beyond a period of four years from the end of the relevant Assessment Year the said notice is required to be quashed. 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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