PCIT Vs Maneesh Pharmaceuticals Limited (Bombay High Court)
Completed Assessments Protected: Bombay HC Rejects Additions Without Search Evidence; Section 153A Not a Second Chance: Bombay HC Upholds Deletion of Additions; Search Without Evidence Cannot Trigger Additions: Bombay HC Clarifies Section 153A Scope; No Fresh Additions in Unabated Assessments Without Evidence: Bombay HC Ruling.
The appeals were filed by the Revenue under Section 260A of the Income Tax Act, 1961 challenging a common order dated 25 October 2021 passed by the Income Tax Appellate Tribunal (ITAT), which upheld the orders of the Commissioner of Income Tax (Appeals) [CIT(A)] and deleted additions made by the Assessing Officer (AO). The appeals pertained to Assessment Years 2006–07, 2007–08, 2008–09, and 2009–10.
The issues raised by the Revenue were common across the appeals and related to deletion of additions made on account of arm’s length price (ALP) adjustments, deduction under Section 10B, and exceptional items written off. The Revenue argued that the Tribunal erred in relying on judicial precedents despite the fact that, in some years, assessments were completed under Section 143(1) and not under Section 143(3), and that the precedent relied upon had not been accepted by the Department.
The assessee had originally filed returns of income for the relevant assessment years. A search under Section 132 was conducted on 29 August 2011, following which proceedings were initiated under Section 153A. The AO completed assessments under Section 153A read with Section 143(3) and made various additions.
