The Tax Publishers2020 TaxPub(DT) 2921 (Mum-Trib) : (2020) 207 TTJ 0143

INCOME TAX ACT, 1961

Section 147

Since entire exercise for reopening the concluded assessment was embarked upon by AO not on the basis of any fresh tangible material or any new information which had came to his notice subsequent to culmination of original assessment proceedings, but on the basis of same set of facts as were there before his predecessor while framing of original assessment under section 143(3), therefore, reassessment was nothing but merely 'change of opinion' and was, therefore, quashed as invalid.

Reassessment - Reason to believe - Change of opinion -

Assessee was a pharmaceutical company. AO reopened assessment for the reason, that a perusal of sales promotion expenses booked by assessee-company revealed that it had inter alia claimed deduction for various expenses which were clearly prohibited as per the MCI guidelines, and thus, disallowable as per the 'Explanation to section 37(1). Assessee challenged this on the ground of no fresh tangible material.Held: A perusal of reasons recorded for reopening of assessment revealed that entire exercise for reopening the concluded assessment was embarked upon by AO not on the basis of any fresh tangible material or any new information which had came to his notice subsequent to culmination of original assessment proceedings, but on the basis of same set of facts as were there before his predecessor while framing of original assessment under section 143(3). AO After conscious deliberations in the course of regular assessment proceedings, had as per his wisdom concluded, that only expenses to the extent incurred by the assessee for giving gifts to doctors amounting (out of the sale promotion expenses) were to be disallowed under section 37(1). As per the IMC regulations (as amended by the MCI on 14-12-2009) and the CBDT Circlar No. 5/2012, dated 1-8-2012. Accordingly, reassessment was nothing but merely 'change of opinion' and was, therefore, quashed as invalid especially when assessee claim was also allowable on merits.

Supported by:CIT v. Kelvinator of India (2010) 320 ITR 561 (SC), NYK Lime (India) Ltd. v. Dy.CIt (No.2) (2012) 346 ITR 361 (Bom) : 2012 TaxPub(DT0 2561 (Bom-HC), Purity Tech Textile (P) Ltd. v. Asstt. CIt & anr. (20190) 325 ITR 459 (Bom) : 2010 TaxPub(DT0 1463 (Bom-HC) and Asstt. CIT v. Rajesh Jhaveri Stock Brokers (P) Ltd. 92007) 291 ITR 500 (SC) : 2007 TaxPub(DT0 1257 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2012-13


INCOME TAX ACT, 1961

Section 143(3)

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