PR COMMISSIONER OF INCOME TAX, PANCHKULA vs. M/S VENUS REMEDIES LIMITED

127

PR COMMIS V/S M/S VENUS

PR. COMMIS

V/S M/S VENUS

PR. COMMIS

V/S M/S VENUS

CORAM: H

Present M

M f

SANJEEV P 1.

A 2024 are bein involved in th IN THE HIGH COURT OF PUN AT CHANDIGA I D SSIONER OF INCOME TAX, PA REMEDIES LIMITED I D SSIONER OF INCOME TAX, P REMEDIES LIMITED I D SSIONER OF INCOME TAX, P REMEDIES LIMITED

HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN Mr. Saurabh Kapoor, Sr. Standin Ms. Pridhi Jaswinder Sandhu, Ju for the appellant(s).

***

RAKASH SHARMA, J.(Oral) Appeal No.10-2024, Appeal N ng dealt with together as comm he same. Facts are being extracte NJAB AND HARYANA ARH ITA-10-2024 (O&M) Date of Decision: 02.08.2024 ANCHKULA …Appellant

…Respondent ITA-11-2024 (O&M) Date of Decision: 02.08.2024 PANCHKULA …Appellant

…Respondent ITA-12-2024 Date of Decision: 02.08.2024 PANCHKULA …Appellant

…Respondent NJEEV PRAKASH SHARMA NJAY VASHISTH ng Counsel along with nior Standing Counsel

) No.11-2024 and Appeal No.12- mon question of law and facts is ed from Appeal No.10-2024.

- s RAJESH KUMAR 2024.08.07 11:08 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

ITA-10-2024 2.

T the Income T (hereinafter re directed to expenditure in 11 and 2011- 115JB of the I 3.

L and it is a se taken up the application un powers under ought to have already filed under the hea merely becau affirmed by t revenue, the a 1961 on acco High Court re 4.

W counsel and e there is any s in the present

[2] (O&M) and connected cases.

The appellant has assailed the or Tax Appellate Tribunal, Chand eferred to as ‘the ITAT’), wher compute book profit after a ncurred by the assessee compan -12 respectively and compute th Income Tax Act, 1961 (for short Learned counsel submits that th econd round of appellate proce matter against the order of C nder Section 154 of the Act, r Section 154 of the Act, 1961 e filed a revised return and not with regard to the amount ded ad ‘Patents IPR Technologies’. use the judgment passed by th the Hon’ble Supreme Court by assessee could not have moved ount of the interpretation of the elating to Section 115J and 115JB We have carefully considered examined the order passed by the ubstantial question of law arises appeal. rder dated 24.08.2023, passed by digarh Bench “B”, Chandigarh, reby the Assessing Officer was allowing deduction of whole ny for the assessment year 2010- he MAT liability under Section t ‘the Act, 1961’) accordingly. he case had a checkered history eedings where the assessee had CIT (Appeals) disallowing the 1961. It is submitted that the 1, are limited and the assessee correction in the original return ducted in the books of account Learned counsel submits that he Karnataka High Court was y dismissal of the LPA of the application U/s 154 of the Act, law as taken by the Karnataka B of the Act, 1961. d the submissions of learned e ITAT so as to find out whether s for consideration of this Court

y , s e - n y d e e e n t t s e , a d r t RAJESH KUMAR 2024.08.07 11:08 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

ITA-10-2024 5.

T passed by the year 2009-10 for the purpos book profit w case was se documentatio Section 143(3 provision was

A Section 154 o record relating Rs.35,67,94,8 book profits f been allowed placed on the and Detergen dismissed by

H application on facts. Wherea vide order da for passing a f

A by both the r

[3] (O&M) and connected cases.

This appeal has a checkered hi e ITAT that the assessee had fi on 30.09.2009, declaring the in ses of MAT liability under Sect was declared as Rs.48,92,35,02 elected for scrutiny and after n, the assessment order was 3) of the Act, 1961, wherein s determined as Rs.48,92,35,027/ At this stage, the assessee filed of the Act, 1961, stating that th g to revenue expenditure incurre 891/-. It was stated that the same for the purpose of calculation o d by computing the book profit decision of the Hon’ble Suprem nts Limited, SLP (C) No.19860 the Hon’ble Supreme Court on 1 However, the Assessing Offic n the ground that it would am after, an appeal was preferred t ated 13.06.2017, remanding the fresh speaking order. Against the order of the CIT (Ap revenue as well as assessee and istory. We find from the order led its return of income for the ncome of Rs.12,91,67,010/- and tion 115JB of the Act, 1961, the 7/-. Subsequently, the assessee r calling for information and passed on 30.12.2011, under the income under the normal /-, which was accepted as it is. d rectification application under here was a mistake apparent on ed by the company amounting to e was liable to be deducted from of MAT liability which had not ts and in support, reliance was me Court in M/s Karnataka Soaps of 2015, wherein the SLP was 16.11.2015. cer, rejected the rectification mount to fresh determination of to CIT(A), which was disposed matter to the Assessing Officer ppeals), an appeal was preferred d the ITAT vide its order dated

r e d e e d r l r n o m t s s s n f d r d d RAJESH KUMAR 2024.08.07 11:08 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

ITA-10-2024 22.01.2018, r adjudicate the

T order dated 0 ITAT, wherei 6.

I provisions of of mistake. Se “ ( r ( A ( s ( ( 2 ( p r m b s h ( c ( m

[4] (O&M) and connected cases.

remand the matter back to CIT e matter afresh. The CIT (Appeals) dismissed t 02.09.2019. An appeal was th in, the impugned order has been In order to appreciate the cont f Section 154 of the Act, 1961, ection 154 of the Act, 1961, is re “154. Rectification of mistake. (1) With a view to rectifying a record an income-tax authority re (a) amend any order passed by Act; (b) amend any intimation or section (1) of section 143; (c) amend any intimation under s (d) amend any intimation und 206CB. (1A) Where any matter has been proceeding by way of appeal o referred to in sub-section (1), th may, notwithstanding anything c being in force, amend the order u sub-section in relation to any ma has been so considered and decid (2) Subject to the other provisio concerned (a) may make an amendment un motion, and T (Appeals) with a direction to the appeal of the assessee vide hus, again preferred before the passed. troversy, we may examine the which provides for rectification eproduced as under:- any mistake apparent from the eferred to in section 116 may, it under the provisions of this deemed intimation under sub- sub-section (1) of section 200A; der sub-section (1) of section n considered and decided in any or revision relating to an order he authority passing such order contained in any law for the time under that atter other than the matter which ded. ons of this section, the authority nder sub-section (1) of its own

o e e e n e s - n y r r e h y n RAJESH KUMAR 2024.08.07 11:08 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

ITA-10-2024 ( w d c O ( a l n h c o b ( s c ( a t a [ ( a i c t d s s a ( o

[5] (O&M) and connected cases.

(b) shall make such amendment which has been brought to its no deductor,] [or by the collecto concerned is the [Commissioner Officer] also. (3) An amendment, which ha assessment or reducing a refun iability of [the assessee or the d not be made under this section has given notice to [the asses collector] of its intention so to d or the deductor] or the collecto being heard. (4) Where an amendment is ma shall be passed in writing concerned. (5) Where any such amendment assessment or otherwise reducin he deductor [or the collector], th any refund which may be due to [or the collector]. (6) Where any such amendment assessment or reducing a refun ncreasing the liability of the as collector], the Assessing Officer he deductor [or the collector], a demand in the prescribed form s such notice of demand shall b section 156 and the provisio accordingly. (7) Save as otherwise provided i of section 186 no amendment u for rectifying any such mistake otice [by the assessee or by the or], and where the authority r (Appeals)], by the 9[Assessing as the effect of enhancing an nd or otherwise increasing the deductor] [or the collector], shall unless the authority concerned ssee or the deductor] [or the do and has allowed [the assessee or] a reasonable opportunity of ade under this section, an order by the income-tax authority t has the effect of reducing the g the liability of the assessee or he Assessing Officer shall make o such assessee or the deductor has the effect of enhancing the nd [already made or otherwise ssessee or the deductor [or the r shall serve on the assessee or as the case may be] a notice of specifying the sum payable, and be deemed to be issued under ons of this Act shall apply in section 155 or sub-section (4) under this section shall be made

e e y g n e l d e e f r y e r e r e e e r f d r y ) e RAJESH KUMAR 2024.08.07 11:08 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

ITA-10-2024 a i ( a a 1 s o i ( ( 7.

F apparent that amendments, in law for the matter which 8.

T wider and he application so 9.

H Assessing Of the Assessing existing law, calculation of ITAT in its misinterpretat facts or accou

[6] (O&M) and connected cases.

after the expiry of four years [fro n which the order sought to be a (8) Without prejudice to the prov an application for amendment un assessee or by the deductor] [or 1st day of June, 2001 to an inco sub-section (1), the authority sha order, within a period of six mo n which the application is receiv (a) making the amendment; or (b) refusing to allow the claim From the bare perusal of Secti t the same allows the Incom corrections and even pass such o e time being in force and in relat might have been so considered b Thus, the scope and powers of e can even amend its earlier or o moved for such rectification. Herein it is a case which was fficer and an order has been pas g Officer could have examined the deductions from the boo f MAT liability could have been s order, the inadvertent mist tion, can always be corrected. I unts have been introduced in th om the end of the financial year amended was passed]. visions of sub-section (7), where nder this section is made [by the by the collector] on or after the ome-tax authority referred to in all pass an onths from the end of the month ved by it,— on 154 of the Act, 1961, it is me Tax Authorities to make orders notwithstanding anything tion to any matter other than the by way of appeal or revision. the Assessing Officer are quite rder suo-moto as well as on an s taken up for scrutiny by the ssed subsequently. At this stage, the position of law and as per ok profits for the purpose of n waived and as noticed by the take occurred on account of It is not a case where any new e books of accounts. The ITAT

r e e e n h s e g e e n e , r f e f w T RAJESH KUMAR 2024.08.07 11:08 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

ITA-10-2024 has factually e appeal in para 3 p r r c e P d o A ‘A d d d s d a p d p c r t

[7] (O&M) and connected cases.

examined the balance sheets and a No.30 and 31 of its order. The s 30. In the instant case, on pe particulars Schedule – E, we find revenue expenditure of Rs.35,67, registration, Clinical Trials, p consultancy expenses, process va expenditure are treated as d Patent/IPR/Technology for write during the year under considerat of Rs.1,53,13,959/- has been wri Account as apparent from S ‘Administrative & Other Expe dispute that the assessee has during the year however only debited in the P&L Account and shown in the balance sheet. Wh determined in terms of prof accordance with Part II Schedul profit and loss account shall b disclose the results of the work period and shall disclose eve credits or receipts and debits o recurring transactions or transa the whole of the revenue expend d discussed at length the facts in same read as under:- erusal of the balance sheet, in d that the assessee has incurred 7,94,891/- on Patents/Trademark product launching registration, alidation etc. and these revenue deferred expenses under head e off over the next few years and tion, out of the same, an amount itten off and claimed in the P&L Schedule Q under the head enses”. Therefore, there is no incurred revenue expenditure a part has been shown and the remaining amount has been here the book profit have to be ofit/loss account prepared in le VI of the Companies Act, the be so made out as clearly to king of the company during the ery material feature including or expenses in respect of non- actions of an exceptional nature, diture incurred by the assessee

n n d k

e d d t L d o e d n e n e o e g -

e RAJESH KUMAR 2024.08.07 11:08 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

ITA-10-2024 a s h c S a p a h o 3 t r a a u d A d f f S a 1 H

[8] (O&M) and connected cases.

amounting to Rs.35,67,94,891/- shown currently at Rs.1,53,13,9 has to be reduced while calcula concept of part recognition of Schedule VI of the Companies assessee has debited a part of profit/loss account, the profit/los accordance with Part II Schedul has apparently been done for pr of the shareholders. 31. We therefore find that these f the books of accounts so prepa reflected on the face of the balan and does not require any long analysis and therefore where the under Section 115JB of the Ac determined in terms of Part II of Act which necessarily include deduction for whole of the Reve find that the facts of the present facts as well as the issue (Seciton Section 115JB) before Hon’ble application of the assessee seek 154 of the Act, drawn support r Hon’ble Karnataka High Court. (and not just a part thereof as 959/-) during the previous year ating the net profit. There is no revenue expenditure in Part II Act, and therefore, where the the revenue expenditure in the ss account so prepared is not in le VI of the Companies Act and resentation to and consumption facts are clearly emerging from ared by the assessee and as so nce sheet and profit/loss account drawn process of reasoning or e tax liability has been computed ct, the book profit have to be f Schedule VI of the Companies the book profit after allowing enue expenditure. We therefore t case are pari materia with the n 115JA has been substituted by Karnataka High Court and the king rectification under Section rightly from the decision of the

s r o I e e n d n m o t r d e s g e e y e n e RAJESH KUMAR 2024.08.07 11:08 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.

ITA-10-2024 10.

T to the books misinterpretat rectified in ter 11.

I for further co accordingly d 12.

02.08.2024 rajesh

1 2

[9] (O&M) and connected cases.

Thus, we are satisfied that there of accounts and the mistake wh tion of law in submission of IT rms of Section 154 of the Act, 19 In view thereto, no substantial q onsideration of this Court. The dismissed. All pending misc. application(s)

(SANJ

is no introduction of new facts hich had occurred on account of R, can always be corrected and 961. question of law therefore, arises appeals therefore, fail and are also stand disposed of. JEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE : Yes/No : Yes/No

s f d s e RAJESH KUMAR 2024.08.07 11:08 I attest to the accuracy and authenticity of this order/judgment. Punjab & Haryana High Court, Chandigarh.