Court validates Income Tax Act Section 148 notices for reassessment based on tangible material.

The court upheld the validity of two notices issued under Section 148 of the Income Tax Act, allowing the Assessing Officer to proceed with reassessment for Assessment Year 2009-10 and 2010-11. The notices were based on tangible material obtained during survey proceedings, highlighting discrepancies in the valuation and existence of intangible assets. Despite the petitioner's objection that the notices constituted a mere change of opinion, the court found that the reassessment was justified due to incorrect valuation of assets, particularly Goodwill. The court dismissed the petitions, emphasizing the importance of proper valuation examination during reassessment.

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Issues:
1) Challenge to two notices dated 20 November 2013 issued under Section 148 of the Income Tax Act, 1961 for Assessment Year 2009-10 and 2010-11.
2) Claim of depreciation on intangible assets and valuation discrepancies.
3) Reopening of assessment based on fresh tangible material obtained during survey proceedings.
4) Jurisdiction of Assessing Officer to proceed with reassessment.

Analysis:
1) The petitions challenged two notices issued under Section 148 of the Income Tax Act, seeking to reopen assessments for 2009-10 and 2010-11 within 4 years from the end of the assessment year. The petitions raised identical issues, with differences in figures claimed for depreciation. The focus was on the claim of depreciation on intangible assets, particularly Goodwill, for which no depreciation was claimed in 2009-10 but was claimed in 2010-11.

2) The petitioner filed its return of income for 2009-10 valuing intangible assets, including Goodwill, Product Research & Development, and Product Design & Drawing. Depreciation was claimed on research and development assets, but not on Goodwill. The Assessing Officer assessed income at a certain amount after accepting the depreciation claim. A survey under Section 133A in 2013 raised concerns about the valuation and existence of intangible assets, leading to the issuance of impugned notices.

3) The impugned notices were based on tangible material obtained during the survey, where discrepancies in valuation and existence of intangible assets were highlighted. The petitioner's objection that the notices were a mere change of opinion was rejected by the Assessing Officer, who found that the depreciation claim was based on incorrect valuation, justifying the reopening of assessments under Section 147.

4) The petitioner contended that the notices lacked jurisdiction due to being based on a change of opinion. However, the court upheld the validity of the notices, stating that tangible material from the survey proceedings provided grounds for reassessment. The court dismissed the petitions, allowing the Assessing Officer to proceed with reassessment for both years, emphasizing the need for proper valuation examination during reassessment without influence from the court's observations.

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