TMI Blog2006 (5) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... r 1991-92. It was further stated by the assessee that the excise department has directed the assessee to refund the amount by letter dated 5-10-1992. Thereafter, on 30-3-1998, the Assessing Officer issued notice under section 148 for assessing the amount of refund as income of the present year. No reason was mentioned in the said notice. However, reason for reopening the assessment was furnished to the assessee by letter dated 30-10-1999 by the Assessing Officer. According to the Assessing Officer, the amount received by the assessee by way of refund was not shown as income of the year. Hence, there was escapement of income. Accordingly, notice under section 148 was issued for reassessment. The assessee filed its reply dated 7-10-1999 stating inter alia that the said excise duty refund has been directed by the Excise Department to return to the department. Hence, the amount has lost its character as refund. A writ has been filed in Karnataka High Court. Hence, according to the assessee, it is liability and not a trading receipt. It was already mentioned by the assessee before issuance of notice that the amount has been shown in the accounts as current liability. In that letter th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... close fully and truly all material facts necessary for assessment. Therefore, it has been submitted that the order of reassessment is bad in law. 3.2 On the other hand, learned DR Smt. Swathi S. Patil, CIT has relied upon the orders passed by the revenue authorities. She also furnished before us a copy of the reasons recorded by the Assessing Officer for reopening of the assessment wherein it has been mentioned that the "refund of excise duty was not shown as income during the year; hence, income escaped assessment". It was argued by learned DR Smt. Patil, CIT that the Assessing Officer was justified in issuance of notice under section 148 beyond the period of 4 years and it has duly mentioned in the reason that the assessee did not disclose the refund of excise duty as income. According to the learned DR that itself specifies the condition that the assessee failed to disclose fully and truly all material facts necessary for his assessment. Therefore, the case laws relied upon by assessee is not applicable. 4. We have heard both the sides and perused the material on record. For better appreciation of the case, let us consider the provision of section 147 of the Act, the sco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sclose and open his mind through reasons recorded by him. He has to speak through his reasons. It is for the Assessing Officer to reach the conclusion as to whether there was failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the concerned assessment year. It is for the Assessing Officer to form his opinion. It is for him to put his opinion on record in black and white. The reason recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. The reasons are the manifestation of the mind of the Assessing Officer. The reasons recorded should be self-explanatory and should not keep the assessee guessing for the reasons. Reasons provide the link between the conclusion and evidence. The reasons recorded must be based on evidence. The Assessing Officer, in the event of challenge to the reasons, must be able to justify the same based on material available on record. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish the vital link be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re in the said notice it has been mentioned that the assessee has failed to disclose fully and truly all material facts necessary for his assessment. Even the columns of the notice are not filled up. The reason recorded by the Assessing Officer for issuance of notice under section 148 which was sent to the assessee is quoted as below : "With reference to the above, I am furnishing the reasons recorded by the Assessing Officer for issue of notice under section 148 as under : During the year assessee was in receipt of refund from Central Excise Authorities being excess paid. Total amount received was Rs. 1,29,00,924. Later, Excise Authorities called back the refund amount from assessee, but assessee contested and got stay from Karnataka High Court. It paid part amount and Rs. 1,01,24,871 is with assessee. Unless and until the amount/refund from Excise Authorities paid back or distributed to ultimate beneficiaries, the amount is trading receipt in the hands of the assessee. Assessee would get deduction as and when the same is paid. The refund of excise duty was not as income during the year. Hence, income escaped assessment. Accordingly notice under section 148 issued to reopen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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