2023 (1) TMI 1034 - HC - Income Tax
Reopening of assessment u/s 147 - allocation of costs and the characterization thereafter has been deliberately camouflaged leading to a disclosure which is neither full nor true - characterization of the expenses to determine whether there has been a claim of ineligible pre-operative capital expenditures in respect of the years prior to 2015-16, when the Vizag unit of the petitioner commenced commercial production - HELD THAT:- Details in regard to the expenditures incurred in connection with the Vizag segment and the manner of characterization of the same have been provided before the officer and in my view, the assessee has made a full disclosure of primary as well as secondary materials before both the Assessing and the Transfer Pricing Officers.
There are instances where re-assessments are initiated based on information obtained from different units/sources with the Income Tax Department including the Criminal Investigation Department or All India Information. Queries may have been raised by those Departments and material may have been placed by assessee for their consideration.
In such cases a probable view is that such materials as produced before those Departments have not come into the notice of the Assessing Authority for the determination of full and true disclosure. However, in this case all materials have admittedly been placed before the TPO who is integral to the conduct of assessment proceedings. All materials filed by an assessee before the TPO are well available as part of the assessment records.
There has been a full and true disclosure by the petitioner as a result that proceedings for re-assessment beyond a period of four years must fail. The impugned order rejecting the objections of the petitioner to assumption of jurisdiction under Section 147, has taken recourse to Explanation 1 to Section 147 of the Act. Reiterating the view in M/s.Asianet Star Communications Private Limited [2019 (6) TMI 356 - MADRAS HIGH COURT] hold that Explanation 1 cannot override the statutory condition under the proviso to Section 147.
Explanation 1 would apply only in a situation where the materials filed by an assessee are so voluminous as make a proper verification nugatory, and the revenue establishes conscious intent on the part of the assessee to camouflage materials in the hope that such materials escape the attention of the authority. This is not the case of the revenue before me in the present matters. Thus the impugned orders and notices are set aside and these writ petitions are allowed.