Bombay High Court Quashes Reassessment Order On Asian Paints In View Of Full Disclosure
The Bombay High Court has quashed the reassessment order as the assessee, Asian Paints, disclosed fully and truly all facts material and necessary for the assessment.The division bench of Justice Dhiraj Singh Thakur and Justice Valmiki SA Menezes has observed that the reasons do not disclose what material or fact was not disclosed by the assessee.The petitioner/assessee is a public...
The Bombay High Court has quashed the reassessment order as the assessee, Asian Paints, disclosed fully and truly all facts material and necessary for the assessment.
The division bench of Justice Dhiraj Singh Thakur and Justice Valmiki SA Menezes has observed that the reasons do not disclose what material or fact was not disclosed by the assessee.
The petitioner/assessee is a public limited company engaged in the business of manufacturing and selling paints, varnish, primer, etc. The business is carried on through various dealers who purchase the goods from the petitioner on a principal-to-principal basis and sell them to the ultimate customers.
A return of income for the assessment year 2014–15 was filed by the petitioner, declaring a total income of Rs. 1403.68 crores, which was subsequently revised to Rs. 1382.57 crores. The case of the petitioner was selected for scrutiny assessment, during which a show cause notice dated October 7th, 2016 was issued by the AO requiring it to submit the details of the "advertising and sales promotion expenses."
The petitioner urged that there was no failure to disclose fully and truly any material fact necessary for the assessment, which was a condition precedent for reopening the assessment in terms of Section 148.
The department contended that the reassessment proceedings would not be held to be bad as the AO while passing the order of assessment, had not expressed any specific opinion in regard to the expenditure incurred on "Colour Idea Stores." Therefore, the reassessment proceedings could not be scuttled.
The court held that the notice does not satisfy the jurisdictional requirement of section 147 and, therefore, is held to be unsustainable.
Case Title: Asian Paints Ltd. Versus The Assistant Commissioner of Income-tax
Case No. - Writ Petition No. 1416 Of 2022
Citation - 2023 LiveLaw (Bom) 23
Date: 09.01.2023
Counsel For Appellant: Advocates Madhur Agrawal, Fenil Bhatt, Atul K. Jasani
Counsel For Respondent: Advocate Akhileshwar Sharma