Case Law Details
Tumkur Minerals Pvt. Ltd. Vs Joint Commissioner of Income Tax (Bombay High Court)
This is a case where the Petitioner disclosed all material facts necessary for his assessment for AY 20 12-13. In the reasons furnished to the Petitioner, the AO omitted to point out the material facts, which according to him, the Petitioner had failed to disclose fully and truly. Since the disclosures were made in the annual accounts and audit reports, Explanation (1) to Section 147 of IT Act was not attracted. Besides, there is no dispute that the amount which the AO claims has escaped assessment during AY 2013-14 was eventually received by the Petitioner in the subsequent year, and the same was offered to tax in AY 2014- 15 Therefore, this income was duly assessed and taxed at a higher rate of 34%.
Ms Razaq, however, contended that the income that the Petitioner may have actually received in the subsequent year was accrued to the Petitioner during AY 20 12-13. Therefore, she contended that this amount should have been offered to tax in AY 2012-13 itself. Mr Jain advanced several contentions to support his contention that the amount had not accrued during AY 20 12- However, we need not go into this issue as long as there was disclosure of the material facts necessary for the Petitioner’s assessment during AY 2012-13. Additionally, even if Mr Jain’s accrual contention was wrong, given the disclosures, the AO could have taxed the accrued income or re-opened the assessment within four years. A mere incorrect claim based on full disclosures cannot be reassessed after four years by invoking sections 147 and 148 of the IT act.
In Titanor Components Ltd. V/s. Assistant Commissioner of Income Tax17, the Division Bench of this Court pointed out that there is a notable difference between a wrong claim by an Assessee after disclosing the true and material facts and the wrong claim made by the Assessee by withholding material facts fully and truly. Only in the latter case would the Assessing Officer be entitled to re-open the assessment after four years.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
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