Fresenius Kabi Oncology Limited Vs CIT (Appeals) (ITAT Delhi)
Reassessment Based Solely on Audit Objection Quashed as Invalid beyond Four Years
The Delhi Bench of the ITAT, in the case of Fresenius Kabi Oncology Limited for AY 2011-12, quashed the reassessment proceedings initiated under sections 147/148, holding the reopening to be bad in law.
The Tribunal found that the reassessment was triggered exclusively on the basis of an audit objection, without any independent application of mind or tangible material by the Assessing Officer. Such reopening, the Bench held, amounts to a mere change of opinion, which is impermissible in law. Importantly, all relevant details relating to disallowance of bad debts written off through provisions and expenditure adjusted in book profits under section 115JB had already been fully and truly disclosed by the assessee during the original scrutiny assessment.
Further, since the notice under section 148 was issued beyond four years from the end of the relevant assessment year, and the recorded reasons failed to allege any failure on the part of the assessee to disclose material facts, the mandatory conditions of the proviso to section 147 were not satisfied.
Relying on settled principles that reassessment cannot be founded solely on audit objections and cannot revisit concluded issues without fresh tangible material, the ITAT allowed the appeal and quashed the reassessment order in entirety.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is preferred by the assessee against the order dated 17.02.2025 of the Ld. Commissioner of Income-tax (Appeals)-26 (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in Appeal No.44/10276/2018-19 arising out of the order dated 19.12.2018 u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the DCIT, Circle-9(2) for AY: 2011-12.
