2001 (6) TMI 50 - HC - Income Tax

Court sets aside notice under section 148 for assessment year 1995-96, emphasizing timely duty payment.

The court allowed the writ petition, setting aside the notice issued under section 148 of the Income-tax Act for the assessment year 1995-96. The ... Reassessment, Notice, Income Escaping Assessment Issues involved: Validity of notice u/s 148 of the Income-tax Act for assessment year 1995-96 due to alleged escapement of income from assessment regarding excise/customs duty provision on stocks in bonded warehouse.Facts:The petitioner, a manufacturing company, had not provided for excise/customs duty on stocks in bonded warehouse in their accounts for the year ending March 31, 1995. Despite paying the duty before the due date of filing returns, the Assessing Officer issued a notice u/s 148 in March 2000 alleging income escapement.Arguments:Petitioner argued duty was payable only on removal of goods, not at year-end, and non-inclusion had no revenue effect. Payment before due date complied with section 43B. Department contended duty should have been included in closing stock valuation for correct profit calculation.Reasoning:The duty of Rs. 11.25 crores was paid before the due date of filing returns, certified by the chartered accountant, satisfying section 43B. Assessing Officer's reasons for notice did not consider this crucial fact. Previous assessment order for another year supported petitioner's position on duty provision.Conclusion:The writ petition was allowed, setting aside the impugned notice dated March 31, 2000, with no costs awarded. The judgment highlighted the importance of timely duty payment and adherence to tax provisions in assessing income.