The Madras High Court while ruling against the assessee held that the attempt to blame the Chartered Accountant cannot result in the assessee’s exoneration and claimed in absolute terms.
The Assessing Officer noticed that the assessee, M/s. Gangotri Textiles Ltd. had sold two landed properties at Kalapatti and Dharapuram and the capital gain was worked out for both the properties at Rs.1,37,31,142.
However the assessee did not disclose about the sale of the lands and windmill in the return of income, which was clear from the perusal of the return of income and in the relevant column, it is stated as ‘Nil’.
The assessee relied upon the annual report and substantial portion of the report was read to us by the learned counsel to impress that the assessee’s non-disclosure was bonafide and an inadvertent mistake.
Firstly, the annual report is not a report, which is filed under the Income Tax Act. Furthermore, on facts, it is admitted that this annual report was never filed with the Income Tax Department. The Chartered Accountant has reported the captial gains as Nil and this has been signed by the Managing Director of the Company.
The court further noted that the information came to the Department through the AIR, which was forwarded by the Registration Department and after verifying the same, when notice was issued under Section 143(2), the assessee, for the first time stated that due to inadvertence, they did not disclose the particulars relating to the capital gains.
“The above facts will clearly show that the assessee did not act bonafidely and the belated explanation sought to be offered deserves to be rejected,” the court said.Subscribe Taxscan AdFree to view the Judgment