ANIL RADHAKRISHNA WANI Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) Rule, by consent made returnable forthwith. Coun-sel for respondents waives service. With the consent of Counsel, petition is taken up for final hearing.

(2.) The petitioner who is a solicitor and Advocate, was a partner of Little & Company. He retired on 30th September, 2002. Upon his retirement, the petitioner has continued to practice as a lawyer as a partner of a firm by the name ANS Law Associates. On his retirement, the petitioner was entitled to the payment of an amount of Rs. 1,36,12,500/ -in eight installments in pursuance of Clause 38 of the Deed of Partnership. In the relevant assessment year 2003-2004, the petitioner received from the firm an instalment of Rs. 17,01,562/-. On 18th December, 2003, the petitioner filed his return of income for as-sessment year 2003-2004. The return was processed under section 143(1). Subse-quently, the case of the petitioner was se-lected for scrutiny. An order of assessment was passed on 19th August, 2005 under sec-tion 143(3). A notice was issued to the peti-tioner on 31st March, 2009 proposing to reo-pen the assessment for assessment year 2003-2004. The reasons which have been re-corded in support of the exercise of the juris-diction under section 147 read with section 148, stated that on his retirement, the peti-tioner received a certain amount from Little & Company. The reasons specifically contain a statement that the bank summary of Cen-tral Bank of India submitted by the petitioner reflects that an amount of Rs. 17,01,562/-was shown to be received from Little & Com-pany during the assessment year 2003-2004.

(3.) Two submissions have been urged on behalf of the petitioner. Firstly, it has been submitted that the assessment in the present case was beyond a period of four years and the condition precedent to the exercise of the jurisdiction to reopen an assessment has not been fulfilled. The petitioner, it is urged, had fully and truly disclosed all material facts dur-ing the course of assessment and this in-cluded the amount which was received and receivable from Little & Company on account of his retirement. The attention of the Court was drawn to the fact that during the course of assessment, to the specific query raised by the Assessing Officer, the petitioner fur-nished a detailed reply explaining the nature of the amounts received from Little & Com-pany on his retirement as a partner of the firm. In these circumstances, it was submit-ted that there was no failure on the part of the petitioner to disclose fully and truly all the material facts necessary for assessment for that assessment year. Secondly, it was sought to be submitted that Clause 35 of the Deed of Partnership merely provides that a retiring partner shall not solicit the clients of the firm for a period of three years and the inference which is sought to be drawn by the Assessing Officer to the effect that the amount was paid to the petitioner on his re-tirement in consideration of a renunciation of his right to freely practice his profession is ex facie perverse. Counsel submitted that as a matter of fact the petitioner continued to practise as a lawyer upon retirement from Little & Company, as a partner in another firm, to which the attention of the Assessing Officer was drawn. Clause 35 of the Deed of Partnership did not contain any covenant for renouncing the right to practise the profes-sion of a lawyer.