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TMI Blog2021 (12) TMI 1183X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment under Section 143 (3) of the Income Tax Act, 1961. In the facts and circumstances of the case invoking of provision of Section 147 read with Section 148 of the Act by the Assessing Officer for reopening the assessment of the assessee on the self-same material which were very much available to the Assessing Officer at the time of scrutiny assessment under Section 143 (3) of the Income Tax Act, 1961 is not justified by taking a view different from his predecessor who had already allowed to tax the nom-compete fees in question as Long Term Capital Gain in scrutiny assessment and by taking a view that the same should be treated as income from business under Section 28 (V-A) of the Income Tax Act, 1961 instead of Long Term Capital Gain. In the facts and in the circumstances of the case the respondent assessing authority is legally not justified in reopening the assessment in question under Section 147 of the Income Tax Act, 1961 by ignoring the fact that non-compete fees in question had already been treated and taxed as capital gains by the Assessing Officer during the scrutiny assessment proceedings under Section 143 (3) of the Act by accepting the claim of the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th Section 148 of the Act by the Assessing Officer on the self-same material which were very much available to the Assessing Officer at the time of scrutiny assessment under Section 143 (3) of the Income Tax Act, 1961, is justified by taking a view different from his predecessor who had allowed to tax the non-compete fees in question as Long Term Capital Gain in scrutiny assessment and by taking a view that the same should be treated as income from business under Section 28 (V-A) of the Income Tax Act, 1961 instead of Long Term Capital Gain ? (iii) Whether on the facts and in the circumstances of the case the respondent assessing Officer is legally justified in reopening the assessment under Section 147 of the Income Tax Act, 1961 by ignoring the fact that noncompete fees in question had already been treated and taxed as capital gains by the Assessing Officer during the scrutiny assessment proceedings under Section 143 (3) of the Act by accepting the claim of the petitioner after examining, verifying and scrutinising all the facts, relevant documents, details and particulars which were requisitioned by the assessing officer in course of scrutiny assessment and which are mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing officer issued impugned notice under Section 148 of the Act on 29th March, 2019 relating to the relevant assessment year 2012-13 admittedly after expiry of 4 years from the end of relevant assessment year on the ground of escapement of income chargeable to tax on the noncompete fees in question by contending that it was taxable as business income under Section 28 (V-A) of the Act instead of income under the head capital gain and recorded reason was furnished to the petitioner on 19th June, 2019 to which the petitioner had made an objection on 19th September, 2019 which was rejected by the respondent Assessing Officer by his order dated 19th September, 2019 which is annexed to the Writ Petition being annexure P-15 at Page - 305 and Paragraph 3 of the said rejection order is very relevant in this case which is quoted hereunder: in this regard I would like to state that the assessee has itself confirmed that these transactions have taken place during the financial year under consideration and non-compete fees have been offered to taxation as LTCG. However, as per the provisions of Section 28 (V-A) of the Income Tax Act, 1961 these receipts of non-compete fees qual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e investigating wing subsequent to the regular assessment, is nothing new and it is the same material which were already available at the time of regular assessment and were considered. It also appears from the order of rejection of the petitioner s objection to the impugned notice under Section 148 of the Act that the Assessing Officer himself has not referred or discussed at all or reiterated about his stand of reliance on the information received from the office of the investigating wing in his recorded reason and the Assessing Officer in this regard is totally silent in its order of rejection of the objection of the petitioner against the impugned notice under Section 148 of the Act. In his order of rejection of objection of the petitioner he has simply justified the reopening of assessment under Section 147 of the Act only on the ground that the non-compete fees in question which were offered for taxation as Long Term Capital Gain was qualified for taxation under Section 28 (V-A) of the Act and under the heading business receipt . Learned Advocate appearing for the petitioner in support of his contention has relied on the decision of the Hon ble Supreme Court in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said two categories and the details filed do not reveal proportional allocation of common expenses be made to these categories. Even the said show cause notice suggested how proportional allocation should be done. All these things leads to an unavoidable conclusion that the question as to how and to what extent deduction should be allowed under Section 10A of the IT Act was well considered in the original assessment proceedings itself. Hence, initiation of the re-assessment proceedings under Section 147 by issuing a notice under Section 148 merely because of the fact that now the Assessing Officer is of the view that the deduction under Section 10A was allowed in excess, was based on nothing but a change of opinion on the same facts and circumstances which were already in his knowledge even during the original assessment proceedings. Mr. Roychowdhury Learned Advocate appearing for the respondent Income Tax authority opposing the Writ Petition has simply relied on the recorded reason for reopening of the assessment in question and justified the order of rejection of petitioner s objection to the impugned notice under Section 148 of the Act in his submission and in the affidavi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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