TaxTMI 
TaxTMI 
2018 (3) TMI 1161
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....ent of income alleging non-disclosure of full and true material facts necessary for assessment; within six years. The Assessing Officer included the interest income of Rs. 34,51,954/-, which was not earlier returned, to carry out a re-assessment as is seen from Annexure-A. 3. The learned Senior Counsel appearing for the Revenue would contend that the interest income which was taxed on re-assessment was never disclosed by the assessee. The assessee had filed a return of income for the subject assessment year disclosing a total income of Rs. 3,14,050/-. What was so disclosed was also interest income, since the assessee had not commenced production in the subject year. Only later, the interest income amounting to almost Rs. 38,35,504/- was revealed, which was not returned. It was hence a notice was issued under Section 148 for re-assessment on the allegation of non-disclosure of full and true material facts. 4. The learned Counsel for the respondent/assessee would however contend that full disclosure was made in the profit and loss account, which was available with the Assessing Officer. It is also argued that the reason for re-assessment was the decision of the Honourable Supre....
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....sessee. The contentions were rejected and Annexure-A1 assessment order passed determining total income on that returned and levying tax thereof. There could then be no further reassessment made making additions to taxable income; of interest income which could have been done at the time of regular assessment, is the argument. 7. We do not see anything from the order at Annexure-A to indicate that the Assessing Officer was apprised of the fact of there being interest income in addition to that disclosed in the return. The contentions raised were only with respect to the income returned and though the very same contentions were available against the interest income that was not disclosed in the return, there is no reference made to that by the Accounts Officer of the assessee. In this context, we have to notice Calcutta Discount Co.Ltd. (supra), in which reassessment was proceeded with on the allegation of non-disclosure of full and true materials. 8. The allegation in Calcutta Discount Co.Ltd. (supra) was with respect to the non-disclosure of the assessee having indulged in regular business of trading in shares. The assessee had produced the audited accounts, in which the sale....
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.... interest income available in the books of accounts but not disclosed in the return. If the said income had been pointed out to the A.O. then the inference would have been the same in regular assessment. Explanation-I to Section 147 squarely applies. 12. We extract the dictum of the decision as available in para 8,9,10 & 13, herein below, which if applied to the facts of the instant appeal, will stand against the assessee: "8. Before we proceed to consider the materials on record to see whether the appellant has succeeded in showing that the Income Tax Officer could have no reason, on the materials before him, to believe that there had been any omission to disclose material facts, as mentioned in the section, it is necessary to examine the precise scope of disclosure which the section demands. The words used are "omission or failure to disclose fully and truly all material facts necessary for his assessment for that year". It postulates a duty on every assessee to disclose fully and truly all material facts necessary for his assessment. What facts are material, and necessary for assessment will differ from case to case. In every assessment proceeding, the assessing auth....
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....concerned, it is the assessee's duty to disclose all of them - including particular entries in account books, particular portions of documents and documents, and other evidence, which could have been discovered by the assessing authority, from the documents and other evidence disclosed. 10. Does the duty however extend beyond the full and truthful disclosure of all primary facts? In our opinion, the answer to this question must be in the negative. Once all the primary facts are before the assessing authority, he requires no further assistance by way of disclosure. It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. It is not for somebody else - far less the assessee - to tell the assessing authority what inferences whether of facts or - law should be drawn. Indeed, when it is remembered that people often differ as regards what inferences should be drawn from given facts, it will be meaningless to demand that the assessee must disclose what inferences - whether of facts or law he would draw from the primary facts. xxx xxx xxx xxx 13. We have therefore come to the conclusion that wh....