TMI Blog1999 (4) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... y and truly all material facts necessary for assessment during the assessment proceedings, recourse to section 147 for reassessment could not have been taken after the expiry of four years from the end of the relevant assessment year. As four years have already expired since the end of each of the relevant assessment years in respect of which notices have been issued, the initiation of proceedings and assumption of jurisdiction by the Assessing Officer is wholly without authority of law. It has also been urged that reasons recorded before issuance of notices go to show that they are a mere pretence and the Assessing Officer, could not reasonably hold the belief that income for the relevant assessment years has escaped assessment for the rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the assessment year 1974-75 but was held liable to tax under section 41(1) only after April, 1976, when the proceedings in review/revision were dropped. Until then the claim of refund was held to be in jeopardy not liable to be taxed under section 41(1). The court held : "In view of the pendency of the review or revisional proceedings, the assessee's claim for refund of the excise duty was in jeopardy. In other words, there was no final decision on the question whether or not the assessee was entitled to claim refund of excise duty of Rs. 1,81,427. It was only when the review or revisional proceedings were dropped on April 30, 1976, that the assessee became finally entitled to claim refund of Rs. 1,81,427. The year of account of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x court in Sugauli Sugar Works [1999] 236 ITR 518, while interpreting the provision, in which the Legislature has used the expression "has obtained some benefit in respect of a trading liability by way of remission or cessation" has laid down that the section contemplates the obtaining by the assessee of an amount either in cash or in any other manner whatsoever by way of remission or cessation and it should be of a particular amount obtained by him. Thus, obtaining by the assessee of an amount or a benefit by virtue of remission or cessation is sine qua non for the application of this section. It is in this context that it becomes important to notice, at the pains of repetition, that this court in Bharat Iron and Steel Industries [1993] 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efit as a result of remission or cessation of a trading liability". Apart from the aforesaid legal position, we are further clearly of the opinion that, on the facts of the case, initiation of action in respect of the assessment years 1988-89 to 1991-92 on February 1, 1999, was clearly inhibited by the proviso to section 147 with reference to which the power has been exercised by the Assessing Officer. The proviso to section 147 envisages that "where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 41(1) once the actual obtaining of benefit is complete. In this connection, learned counsel for the respondent vehemently urged that though receipt of a particular sum as a result of refund of excise duty was disclosed in the note attached to the balance-sheet, but the fact that the receipt has been made under the orders of the High Court in special civil application filed by the petitioner on condition of furnishing the bank guarantee has not been disclosed. We fail to see any link between furnishing of bank guarantee by way of security for restitution of the sum which the petitioner may become ultimately liable to refund as a result of his failure in the pending proceeding has anything to do with chargeability of the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8-89 to 1991-92 was not falling within the province of a case where such escapement can be held to be by reason of failure on the part of the assessee to disclose truly and fully all material facts necessary for the assessment, nor such belief has been held to be entertained by the Assessing Officer in the reasons recorded by him for the purpose of initiating action under section 147. The disclosure of primary facts, viz., allowance of excise duty paid as trading liability as deduction in earlier assessment years, the receipt of refund amount during the assessment year in question and pendency of an appeal against the order resulting in refund with plea of the assessee about its non-adjustment are not disputed. Law is well settled. When pri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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