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TMI Blog2025 (3) TMI 1015X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings and 1/3rd of the promotional expenses were disallowed and the balance expenses were allowed. If this is an admitted position as per the reasons recorded, then we fail to understand how the precondition of failure to disclose fully and truly all material facts necessary for the assessment can at all be satisfied. If at all, there is a failure, it was on the part of the assessing officer to have not disallowed the entire expenditure and not the failure on the part of the petitioner-assessee. Therefore, the pre-condition required by first proviso to Section 147 of the Act based on the admission made in the reasons for reopening are not satisfied and therefore on this short ground itself, the impugned notice dated 29 March 2016 is r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ef Facts: 2. The original income return for AY 2009-10 was filed on 30 September 2009 and revised on 25 March 2011. The return was selected for scrutiny assessment by issuing notice under Section 142 (1) of the Act. 3. During the assessment proceedings, various details were sought for including details relating to promotional expenses and allowability of such expenses in the light of the CBDT Circular No. 5 of 2012. The petitioner vide various letters filed the details of these promotional articles and the submissions on allowability of such expenditure in the light of CBDT Circular No. 5 of 2012. 4. In the assessment order under Section 143 (3) of the Act passed on 18 April 2013, 1/3rd of the expenses on promotional article were disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct the view of the predecessor and since in the assessment order, there was ad hoc disallowance, the impugned proceedings cannot be said to be based on change of opinion. 6. It is on the above backdrop that the petition was filed and was admitted by this Court. Submissions of the Petitioner: 7. Mr. Agrawal, learned counsel for the petitioner submits that the issue for which the reopening is sought was subject matter of detail enquiry in the course of the assessment proceedings including the applicability of CBDT Circular No. 5 of 2012 and therefore pre-conditions provided in first proviso to Section 147 of the Act is not satisfied. He further submitted that the subject matter of allowability of promotional expenses was already decided b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e instant case, the income of the assessee was assessed at Rs. 1, 14, 73, 60, 286/- after completion of scrutiny. Verification of records revealed that during the course of scrutiny the assessing officer vide para 4 of the order discussed on allowance of promotional expenses by way of promotional articles (also known as reminder items in medical parlance). These are distributed to doctors for promotion of assessee's products. The assessing officer disallowed 1/3rd of such expenses amounting to Rs. 1, 93, 80, 002/- and allowed balance expense of Rs. 3, 87, 60, 006/ on the ground that recipient details and documentary evidence thereof was not furnished. In view of the CBDT Circular 5 of 2012, the entire expenditure on promotional articles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecorded, then we fail to understand how the precondition of failure to disclose fully and truly all material facts necessary for the assessment can at all be satisfied. If at all, there is a failure, it was on the part of the assessing officer to have not disallowed the entire expenditure and not the failure on the part of the petitioner-assessee. Therefore, in our view, the pre-condition required by first proviso to Section 147 of the Act based on the admission made in the reasons for reopening are not satisfied and therefore on this short ground itself, the impugned notice dated 29 March 2016 is required to be quashed and set aside. 13. Even otherwise, during the assessment proceedings, the assessing officer vide notice dated 25 October ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower the Act does not confer upon the assessing officer under Section 147 of the Act. Furthermore, third proviso to Section 147 of the Act is clear that if the issue is pending before the Appellate Authority, then reassessment proceedings cannot be initiated. In the instant case, the issue was already concluded by the CIT(A) before the initiation of the impugned proceedings and therefore even on this count, the impugned proceedings are without jurisdiction. 15. The petitioner is justified in relying upon this Court's decision in Abbot India Ltd. vs. ACIT (2023) 157 Taxmann.com 423, in which, on a similar fact situation, reassessment proceedings were quashed. 16. We are not making any finding with respect to the other submissions made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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