The Supreme Court has recently delivered a pivotal ruling concerning Section 245H of the Income Tax Act, 1961. This section bestows the Settlement Commission with the authority to grant immunity from prosecution and penalty to assessees, but with a condition. The assessee must have
“co-operated with the Settlement Commission and has made ‘full and true disclosure of his income’.”
The crux of the Supreme Court’s clarification revolves around the interpretation of the disclosure by the assessee. The Court firmly stated that Section 245H
“cannot be saddled with an artificial requirement that the material ‘disclosed’ by the assessee before the Commission must be something apart from what was ‘discovered’ by the Assessing Officer.”
This interpretation by the apex court ensures that the provisions of the Act are applied equitably, without placing undue burdens on taxpayers. It emphasizes the importance of truthful and complete disclosure, rather than the novelty of the information provided to the Commission.
