By TIOL News Service

MUMBAI, JULY 10, 2018: THE ISSUE BEFORE THE DIVISION BENCH IS - Whether non acceptance of a bonafide claim made by taxpayer leading to disclosed income, will per se render the application for settlement as bad for failure to make full disclosure. NO IS THE VERDICT.

Facts of the case:

The assessee company preferred present petition challenging the order passed by Income-Tax Settlement Commission u/s 245(D)(4) dismissing the application for settlement made by assessee in pending cases for A.Ys 2008-09 to 2014-15. Consequently, the pending assessments were restored to the AO to complete the assessment in accordance with law. The said application for settlement was rejected on the ground that there was failure to make a full and true disclosure of its income on the part of assessee.

High Court held that,

++ it is found that assessees had made a full and complete disclosure of primary facts. It is on the undisputed facts, that a bonafide claim was made leading to the disclosed income. Non-acceptance of the claim would not ipso-facto lead to making the application for settlement bad for failure to make full and true disclosure of income. Infact this Court in Principal Commissioner of Income-Tax V/s. Income-Tax Settlement Commission - 2017-TIOL-362-HC-MUM-IT has held, that to establish there was failure to make a full and true disclosure of income as required under Section 254(C)(1), it would be necessary for the Revenue to prove that there was a non-disclosure of primary facts and not merely non-acceptance of certain claims made before the Commission. Moreover, in the present facts, so far as, retention money is concerned, the claim was made by assessee on the basis of the decision of this Court in Commissioner of Income-Tax V/s. Associated Cables Pvt. Ltd, [2006] 286 ITR 596 (Bom). Therefore, there shall be interim relief in all of the petitions.

(See 2018-TIOL-1303-HC-MUM-IT)