TaxTMI 
TaxTMI 
1985 (6) TMI 75
X X X X Extracts X X X X
X X X X Extracts X X X X
..... The assessee is a registered firm. The original assessments for the asst. yrs. 1974-75 and 1975-76 were completed by the ITO on 24th March, 1975 and 18th March, 1978 on total income of Rs. 99,720 and Rs. 1,48,930 respectively. later on, the ITO came to know that the assessee firm received an amount of Rs. 13,061 from the Sales-tax Deptt. as refund, but the said amount was taken to the Sales-tax reserve account and was no offered for assessment for that year. For the asst. yr. 1975-76 the assessee firm received an amount of Rs. 21,258 as sales-tax refund from its suppliers and the said amount was also not taken to the P&L A/c but was taken to the sales-tax reserve account. However, in the return of income filed for this year, at p. 3, the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r the asst. yr. 1975-76 the ITO completed the assessment under s. 144 of the IT Act on a total income of Rs. 1,70,800 by an order dt. 4th Feb., 1983 after including the sales-tax refund received from the suppliers amounting to Rs. 21,258. For the asst. yr. 1975-76, the assessee moved an application under s. 146 of the IT Act challenging the assessment made under s. 144 of the IT Act, but the said application was rejected by the ITO. 3. Against the orders passed by the ITO, the assessee went in appeal. Before, the CIT(A), the assessee mainly challenged the reopening of the assessments under s. 147(a) of the Act in respect of both the assessment years. He also submitted that at the time when the assessee received the refunds from the sale-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee, alongwith the return of income, had filed a copy of typed balance sheet in English in which the sales-tax refund of Rs. 13,061 was shown in the sales-tax reserve account and the said entry in the balance sheet was also ticked by the ITO. As regards the asst. yr. 1975-76, the ld. counsel submitted that in the original return for the year, the assessee at page 3 had given a note to the effect that "sales-tax reserve account" has not been adjusted because finalisation of the case by the ST authorities is pending (Rs. 21,258). The ld. counsel for the assessee submitted that in the balance sheet also this item was shown as sales-tax reserve account. According to the ld. counsel, all the material facts were fully and truly disclosed in the or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y was received from the ITO and, hence, there was no non-compliance of the notice under s. 148 and, hence, the assessment made under s. 144 of the Act was also bad in law. 5. The ld. Departmental Representative on the other hand, submitted that the sales-tax refund received by the assessee during asst. yrs. 1974-75 and 1975-76 was clearly assessable in the year of receipt, and, hence, they were rightly subjected to tax during the above assessment years by reopening the original assessment made for these years. 6. In our considered opinion, a decision on question of the legality of the initiation of proceedings under s. 147(a) of the IT Act in respect of these two years would clinch the issue. Now, we find that for the asst. yr. 1974-7....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in this balance sheet sales-tax reserve account has been clearly shown and even tickmarked by the ITO. For the asst. yr. 1975-76 the assessee clearly gave a note in the return of income itself as reproduced earlier. The above facts clearly go to show that as far as the assessee is concerned, it had placed the primary facts before the ITO and after some routine enquiry, the ITO could have assessed the income on the basis of such information. However, it was not open for him to invoke the provisions for s. 147(a) of the Act and reopen assessments even though he may have omitted to notice the facts mentioned in the return of income by oversight. In taking this view we place reliance on the decision of the Hon'ble Madhya Pradesh High Court in ....