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When it comes to reopening a case the Madras High Court in (2021] 17 ITR-OL 489 (Mad) recalled the Calcutta Discount case on disclosure of primary facts and further pointed out that what constitutes primary facts for the purposes of “full and true dis- closure” must be seen in the context of the assessment of a source of income over the years as the Assessing Officer has understood it meaning thereby that before reopening a case on a subject he is also expected to verify the method of revenue recognition in preceding and later years and only if there is a departure from such consistent basis should he invoke reopening and not otherwise.
In this case, the methodology followed for recognition of revenue is the same, both prior and subsequent to the relevant assessment. The Court thus held that there appears no justification for the present proposal to reassess the income, seen in the light of the fact that for previous years, the accounts of the petitioner have been accepted by the Department. The absence of any note in the financials for carrying forward of income to subsequent year did not make mean any less a disclosure as long as the assessee followed a consistent basis of accounting.

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