Limitation Period not applicable When There is No Full and True Disclosure: Madras HC [Read Order]

The Madras High Court has recently in a writ petition filed before it, held that limitation period will not be applicable when there is no full and true disclosure by the petitioner.

The aforesaid observation was made by the High Court when a writ petition was filed before it by the petitioner M/s.RKR.Gold P. Ltd., under Article 226 of the Constitution, as against the proceedings for re-assessment under the provisions of the Income Tax Act, 1961, for the assessment year A.Y.2011- 2012.

The facts of the case being that the petitioner had filed the return of income in time, accompanied by the required annexures, the return was taken up for scrutiny and a notice under Section 143(2) was issued on 31.07.2012.

Inter alia, the assessing authority having called for the attendance of the petitioner to his office to finalise the assessment, parallelly and separately a notice had been issued by the Income Tax Officer in the Intelligence and Criminal Investigation wing of the Income Tax Department (ITO(I&CI)), on 05.10.2012.

Following the same, the ITO and I&CI had called upon the petitioner to furnish information under Section 133(6) of the Act, including bank statements relating to cash deposits in excess of Rs.2 lakhs, and on 15.10.2012, the petitioner responded to the same by enclosing copies of statements in ICICI, Dhanlaxmi, Axis and other banks wherein the he held deposits.

Further, on 26.11.2012, the petitioner had also filed before the assessing officer, copies of bank statements in Axis, Dhanalaxmi, Yes and Standard Chartered banks, though not the statement relating to ICICI bank which was produced before the ITO(ICI).

And the situation being an admitted position that the statement of the account in ICICI Bank was not enclosed and that there was nothing either in the communication dated 26.11.2012 filed before the assessing officer or any other record/communication that could lead to a conclusion that this statement had been enclosed, it was submitted by the counsel for the petitioner that the only reason justifying the reassessment is the failure of the officer to verify the deposits in the ICICI Bank, R.S. Puram Branch at the first instance, and that there no fault attributed to the petitioner in that regard.

However, this submission being seen as erroneous by the Court in light of the statement of the officer at paragraph 6, wherein he clearly stated that the assessing authority had verified the assessment records containing the submissions made by the assessee in response to notices issued during assessment, and then only has come to the conclusion that the assessee has not fully and truly disclosed the necessary facts, the High Court observed as follows:

“In fact, the apparent difference in the communications addressed to the assessing authority on the one hand and the ITO (ICI) on the other, would itself illustrate the difference in the disclosures made before the two authorities. Records have been summoned and produced by the standing counsel, that confirm the averment in counter to the effect that there was no disclosure of the account in ICICI bank R S Puram at the time of assessment.”

Thus, confirming the order of the Authorities and dismissing the petitioner’s writ petition, the High Court ruled:

“In the absence of a full and true disclosure by the petitioner at the first instance, the assumption of jurisdiction by the assessing authority beyond the period of four years is not barred by limitation, and cannot be faulted.”

To Read the full text of the Order CLICK HERE

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