TaxTMI 
TaxTMI 
2015 (8) TMI 991
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..... Initially, the assessee offered to pay tax on the same but later retracted and claimed that the same would be exempted under Section 80HHC of the Income Tax Act, 1961 (for short 'the Act') claiming that the said income was derived from export of the films and the revenue earned was in foreign currency which had been received by the assessee within six months of such export. 3. By communication dated 07.08.1998, the Department made some queries with regard to the claim of the assessee for exemption of the aforesaid amount from payment of income tax under Section 80HHC, to which a response was given by the assessee on 20.08.1998. On the same date, the assessee also filed a return of income before the Assessing Officer for assessment year 1994-95, acknowledgment of which was duly given to the assessee by the Income Tax Office on 20.08.1998 itself. Nearly three years later, on 29.05.2001, a search was conducted under Section 132 of the Act in the premises of the group companies of the assessee and consequently proceedings under Section 158BD of the Act were initiated against the petitioner, which was with regard to undisclosed income of same Rs. 88,00,505/- on the ground tha....
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....nswering the substantial question of law in favour of the Revenue. 6. Per contra, learned counsel for the respondent has submitted that a return of income filed by an assessee may be a valid, invalid or irregular return but the same would always remain a return of income for the purposes of disclosure made by the assessee. According to the respondent-assessee, the return filed on 20.08.1998 may be termed as an irregular return but by filing such return, the intention of the assessee would be clear that he did not want to conceal the said income from the Department and had disclosed (may be at a later stage) the true position as it stood. It is contended that even if the said return of income is to be treated as an invalid return under Section 139 of the Act, then too information supplied under the said return would be a disclosure of his income by the assessee which could have been used by the Department for initiating proceedings under Sections 148/147 of the Act. It is thus submitted that once the information regarding his income for the relevant assessment year has been given, or disclosure made, by the assesseee to the Department, which may be by way of valid, invalid or irreg....
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....as a Scheme of the Department for voluntary disclosure of income not assessed to tax, the asseesee, under the impression that the said income may be subjected to tax, offered the same for tax vide disclosure dated 31.12.1997. Then, on advice given to the assessee that the said income would be exempted under Section 80HHC of the Act as the income derived was on account of export and received in foreign exchange within six months of the export of films, the assessee withdrew the disclosure, regarding which the Department itself raised certain queries vide communication dated 07.08.2008 requiring the assessee to furnish information with regard to the claim of exemption under Section 80HHC of the Act. To such query, the assessee gave its response on 20.08.1998 and also, on the same date, filed its return of income for the relevant assessment year, which was duly received and acknowledged by the Department. Admittedly, it was the communication dated 20.08.1998 (and not the return filed on 20.08.1998), which was found during search conducted on 29.05.2001, which formed basis of the undisclosed income of Rs. 88,00,505/- of the assessee. 10. From the aforesaid, what we clearly find is tha....
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....rn filed by the assessee on 20.08.1998 was not under either of the provisions. In support of his submission, he relied on the decision of the Apex Court in the case of Assistant Commissioner of Income Tax -vs- A.R. Enterprises (2013) 350 ITR 489. 12. We have gone through the said judgment which relates to the claim of having made disclosure on the basis that advance tax had been duly deposited after deducting TDS. On such basis, the assessee therein was claiming that there was disclosure of income made by it and that in such circumstances, it would not amount to undisclosed income. The Apex Court held that while dealing with a case of payment of advance tax, there would be a distinction when the search has been conducted before the period of filing of return and when search is conducted after search is conducted. Considering further that advance tax was based on estimated income, and hence it could not result in the disclosure of the total income assessable and chargeable to tax, the Supreme Court rebutted the claim of the assessee and did not grant benefit of the alleged disclosure said to be made by payment of advance tax. It was while considering such facts of the case that in ....