ACIT Vs Asian Paints Limited. (Supreme Court of India)
The Supreme Court of India, while dismissing the special leave petitions filed by the Revenue, affirmed the judgment of the Bombay High Court which had quashed the reassessment proceedings initiated under Section 148 of the Income-tax Act, 1961. The Supreme Court noted that the notice for reopening had been issued after the expiry of four years from the end of the relevant assessment year and that the High Court had recorded a categorical finding that the assessee had placed full material facts before the Assessing Officer during the regular assessment proceedings. Finding no merit in the Revenue’s challenge, the Supreme Court dismissed the appeals.
Read HC Judgment: Reassessment Quashed for Change of Opinion on Promotional Expenditure
Before the High Court, the assessee had challenged the notice dated 31 March 2021 seeking to reopen the assessment for Assessment Year (AY) 2013–14 and the order rejecting objections to such reopening. The assessee had filed its return for AY 2013–14, which was selected for scrutiny. During the scrutiny assessment, the Assessing Officer issued a show cause notice calling for details of advertisement and sales promotion expenses. In response, the assessee furnished a detailed break-up, which specifically included expenditure incurred on “Colour Idea Stores,” amounting to about ₹17.41 crore.
