The Madras High Court in the case RKR. Gold P. Ltd Versus ACIT observed and has held that the criminal investigation wing is a separate and distinct from the assessment wing and that disclosure made before one wing will not exonerate the assessee from the requirement of making a “full and true disclosure” in an assessment before the assessing officer.
The Single bench comprising of Justice Anitha Sumanth observed that in the absence of full and true disclosure in the first instance. Thus the assessing authority assuming the jurisdiction beyond the period of four years is not barred by limitation, and cannot be faulted.
It has been challenged by the assessee/petitioner the proceedings for re-assessment under the provisions of the Income Tax Act, 1961 for the assessment year Annual Year 2011-2012. The return of income on time has been filled by the petitioner accompanied by the required annexures. However, the return was been taken for scrutiny and a notice under Section 143(2) was issued on July 31, 2012.
In the present case, the assessing authority calls for the attendance of the petitioner at his office to finalise the assessment. Thus, the notice has been issued by the Income Tax Officer in the Intelligence and Criminal Investigation wing of the Income Tax Department (ITO (I&CI)) on October, 5, 2012.
The petitioner is been called upon by ITO (I&CI) for furnishing information under Section 133(6), including bank statements relating to cash deposits in excess of Rs. 2 lakhs. On 15.10.2012, it was responded by the petitioner by enclosing copies of statements from ICICI, Dhanlaxmi, Axis, and other banks wherein the petitioner holds deposits.
Further, there being an exchange of responses and notices between the petitioner and the respondent, and the reply of the petitioner dated 24.10.2013 also referring to “Details of bank accounts of the company and its directors” that without any reference to ICICI Bank and that the order of the assessment has come to be passed by that of the assessing officer on January 28, 2014 under Section 143(3) of the Act, based upon the materials available.
However, the petitioner was in receipt of a notice under Section 148 on 29.03.2018 beyond the period of four years from the end of the relevant assessment year. Thus, department was to satisfy the additional condition set out under the provision to Section 147 to the effect that the petitioner had made an incomplete and untrue disclosure of relevant facts at the initial stage.
It has been noted by the court that post finalisation of the assessment, the information has been received by the department regarding the suspicious bank transactions between the periods of 01.02.2011 and 31.02.2011. A certain amount of Rs. 42.29 crores have been deposited in cash and immediately debited through RTGS. The proceedings for that of the re-assessment have come to be initiated based upon the information received regarding the aforesaid modus operandi and to verify the same.
While dismissing the petition, the court stated that the responses/communications of the petitioner during the original assessment did not reveal the existence of the bank account at ICICI, R.S. Puram Branch. In this regard, the mere reference to the bank account in the communication addressed to the ITO (ICI) will be of no aid to the petitioner.