Colgate Palmolive (India) Limited Vs PCIT (ITAT Mumbai)
Judicial Discipline Reaffirmed – PCIT Cannot Disagree With Coordinate Bench- ITAT Mumbai Quashes PCIT’s 263 Revision Against Colgate Palmolive
ITAT Mumbai has quashed the revisionary order passed u/s 263 by PCIT, thereby restoring the assessment framed by AO. Tribunal held that the action of the PCIT in disagreeing with a Coordinate Bench decision in assessee’s own case for earlier year was not in consonance with judicial discipline & that mere pendency of Revenue appeal before Supreme Court cannot justify revision under section 263.
Assessee had filed its return declaring income of Rs.9924.66 crores. Assessment was completed u/s 143(3) r.w.s. 144C(13) determining total income at Rs.16308.04 crores. During the assessment, AO had allowed deduction u/s 80G of Rs.1.50 crores on donations, after the Assessee had suo moto disallowed CSR expenses. AO had also accepted the claim of Rs.9.22 crores towards ESOP expenditure u/s 37(1) after adding back Ind-AS adjustments. Subsequently, PCIT invoked section 263 based on Revenue audit objections alleging that both these claims were wrongly allowed. PCIT brushed aside the binding ITAT order in Assessee’s own case for AY 2017-18 (ITA No.2645/Mum/2024 dated 29.07.2024) which had upheld such claims, by observing that the Karnataka High Court ruling in Biocon Ltd. [121 taxmann.com 351] was pending before Supreme Court. PCIT therefore directed AO to re-enquire & reassess the income.
