TMI Blog2011 (12) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... or Respondent : Ms. Suruchi Aggarwal, Sr. Standing Counsel SANJIV KHANNA,J: (ORAL) The petitioner BLB Ltd. has filed the present writ petition impugning notice under Section 148 dated 01.02.2010 and the order dated 16.9.2010 passed by the Assessing Officer dismissing their objections to the re-opening. 2. Reasons given for re-opening of the assessment for assessment year 2003-04 under Section 147/148 of the Income Tax Act, 1961 (Act, for short) are as under:- The return in this case for the AY 2003-04 was filed on 31.10.2003 declaring on income of Rs.22447176/- at MAT u/s 115JB which was processed u/s 143(1) of the I.T. Act. 1961on 22.03.2004. The case was selected for scrutiny and the asstt. was completed u/s 143(3) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... four years from the end of the assessment year. Proviso to Section 147 of the Act is applicable. Failure or omission on the part of petitioner-assessee to disclose fully and truly material facts is a jurisdictional pre-condition which must be satisfied for valid initiation of the reassessment proceedings. 5. The contention of the petitioner is that the issue/question of tax ability of the non-compete fee was specifically examined with reference to the law relevant to assessment year 2003-04 before the original assessment order dated 30.01.2006 was passed. 6. The petitioner assessee has placed on record the letter dated 28.1.2006 written to the Assessing Officer in reply to the queries raised. The relevant portion of the letter dated 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3-04 onwards. In this view of the matter, the non-compete fees received by the recipient is of the Income-tax Act. As a natural corollary, the expenditure is allowable as revenue expenditure in the hands of payer . 7. This letter is specifically referred to and mentioned in para 2.4(ii) and (iii) of the writ petition. The respondent in the counter affidavit has not specifically dealt with the said averment. However, during the course of arguments it was submitted that this letter dated 28.01.2006 though available in the Department s file, might have been subsequently introduced and placed on record. It was submitted that the questionnaire in response to which this letter was written, is not available on record and, therefore, the suspic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit Gains of Business and Profession as per newly inserted clause (va) of section 28 of the Income Tax Act which reads as follows: (va) any sum, whether received or receivable, in cash or kind, under an agreement for a) Not carrying out any activity in relation to any business; or b) Not sharing any know-how, patent, copyright, trademark, licence, franchise or any other business or commercial right of similar nature or information or technique likely to assist in the manufacture of processing of goods or provision for services; 9. We have not reproduced the entire contents of the reply of the Assessing Officer in response to the audit objection, as what has been reproduced above is sufficient. It is apparent from the afo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich, we are afraid, section 147 would give arbitrary powers to the Assessing Officer to reopen assessments on the basis of "mere change of opinion", which cannot be per se reason to reopen. We must also keep in mind the conceptual difference between power to review and power to reassess. The Assessing Officer has no power to review ; he has the power to reassess. But reassessment has to be based on fulfillment of certain pre-conditions and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of reopening the assessment, review would take place. One must treat the concept of "change of opinion" as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1st April ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer was legally wrong and had misapplied and wrongly understood the law/legal position. 12. In the present case, it is noticeable that the assessee had disclosed fully and truly all material facts relevant for the assessment. The reasons recorded above do not disclose or state that there was failure or omission to disclose fully and truly all material facts. There is no indication and it is not alleged that there was some material or information available on record when reasons to reopen were recorded, to show that the assessee had concealed or had not disclosed fully and truly all material facts. The material facts were on record and had been disclosed by the asssesee. The factual matrix above indicates that the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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