Reopening to disallow deduction allowed during scrutiny assessment not permissible

Briefly stated the facts of the case are : assessment of the assessee qua the assessment year 2005-06 was completed u/s 143(3) of the Income-tax Act, 1961 (hereinafter ‘the Act’) at an income of Rs.8,48,440/-. The assessee claimed an exemption of Rs. 16,74,971/- inclusive of duty drawback amounting to Rs.3,72,186/- under section 10BA of the Act which was allowed by the Assessing Officer. Subsequently, the AO found that the income chargeable to tax amounting to Rs.3,72,186/- has escaped assessment and consequently, issued the notice u/s 148 read with section

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