The Bombay High Court has quashed the reassessment in opposition to Knight Riders Sport and held {that a} change of opinion doesn’t represent justification to consider earnings chargeable to tax escaped evaluation.

The bench of Justice Ok. R. Shriram and Justice Kamal Khata has noticed that there’s a change of opinion as a result of as soon as a question has been raised in the course of the evaluation and has been answered and accepted by the AO whereas passing the evaluation order, it follows that the question raised was a topic of consideration of the AO whereas finishing the evaluation.

The petitioner/assessee is within the enterprise of working and operating a workforce within the Indian Premier League, i.e., Kolkata Knight Riders.

During the course of the evaluation proceedings, the petitioner obtained varied notices underneath Section 142(1). In the discover, the petitioner was known as upon to furnish in writing and confirm within the prescribed method data to justify the outward remittances to any non-resident (not being an organization) or to a international firm, and in that regard, additionally submit related 15CA and 15CB certificates.

The petitioner offered particulars of the bills that have been incurred by non-residents or international corporations. As regards Form 15CA and Form 15CB, the petitioner acknowledged that for the reason that information have been voluminous, it could assist if a particular listing of bills for which the 2 kinds are required have been made accessible.

Another discover underneath Section 142(1) was issued, wherein the petitioner was known as upon to offer particulars of international funds. The identify of the gamers or events, their deal with, and the quantity paid, Tax Deducted at Source (TDS), with narration, have been to be offered.

The petitioner offered the small print within the format requested for. The petitioner particularly offered that consulting and workforce administration charges have been paid, and a breakup was additionally offered. In the breakup, the quantity of Rs. 1.90 crore paid to Insignia is talked about, and no TDS was deducted.

The evaluation order underneath Section 143(3) was handed. The evaluation order particularly refers back to the varied notices issued to the petitioner underneath Section 142(1). The funds made to Insignia or non-deduction of TDS have been, nevertheless, not mentioned within the evaluation order.

The petitioner obtained the impugned discover underneath Section 148A(b), alleging that there was data suggesting that earnings chargeable to tax has escaped evaluation throughout the that means of Section 147.

The assessee contended that the subject material of the knowledge, i.e., cost to Insignia and non-deduction of TDS, was a topic of consideration in the course of the evaluation proceedings. The reopening of the evaluation was merely on the idea of a change of opinion by the AO.

The courtroom held that the reopening of the evaluation by the impugned discover is merely on the idea of a change of opinion from that held earlier in the course of the course of evaluation proceedings that led to the passing of the evaluation order.

Counsel For Petitioner: J.D. Mistri

Counsel For Respondent: Vipul Bajpayee

Case Title: Knight Riders Sports Pvt. Ltd. Versus ACIT

Case No.: Writ Petition No.2269 Of 2023

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