Law:

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Section 147, read with section 148 of the Income-tax Act, 1961 - Income escaping assessment - Non-disclosure of primary facts - Assessment year 2004-05 - Assessee, a partner in a solicitor firm, retired during assessment year in question - He was paid Rs. 21.65 lakhs for relinquishing his rights in partnership firm which included non-competing with firm's professional activities for three years - Since assessee had not declared said sum as taxable income, Assessing Officer opined that income chargeable to tax had escaped assessment - He, thus, initiated reassessment proceedings by issuing a notice under section 148 - Assessee filed instant petition challenging initiation of reassessment proceedings - It was noted that in case of Balkrishna Hiralal Wani v. ITO[2010] 321 ITR 519 (Bom.), assessment sought to be reopened on similar grounds was held to be bad in law - Whether following order passed in aforesaid case, impugned notice issued under section 148 was to be quashed - Held, yes CASE REVIEW Balkrishna Hiralal Wani v. ITO[2010] 321 ITR 519 (Bom.)followed & relied upon. CASES REFERRED TO Balkrishna Hiralal Wani v. ITO[2010] 321 ITR 519 (Bom.). P.J. Pardiwala and A.K. Jasani for the Petitioner. D.K. Kamwal for the Respondent. JUDGMENT 1. Heard. 2. Rule. Returnable forthwith. By consent of the parties the petition is taken up for final hearing. 3. The petitioners have challenged the notice dated 25-3-2010 issued under section 148 of the Income-tax Act, 1961. By the said notice the assessment for the assessment year 2004-05 is sought to be reopened by recording the following reasons : "On a perusal of the records, it is seen that the assessee was a partner in M/s. Little and Co. a solicitor firm, and retired on 23-3-2004. During the year relevant to the assessment year 2004-05 the assessee was paid Rs. 21,65,625 on his retirement by the firm. The said amount has been reflected in the assessee's capital account as receipt from M/s. Little and Co. and also confirmed by the assessee's representative's letter dated 11-12-2006. On a perusal of the memo of income it is seen that the assessee has listed the exempted income but the said sum of Rs. 21,65,625 has not…

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