Chittewan v. The Assistant Commissioner Of Income-Taxcircle 2(1)(1), Room

Chittewan IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.685 OF 2016 ABBOTT INDIA LIMITED,(As successor of Solvay Pharma India Ltd.)Unit 3-4, Corporate Park, Sion-Trombay Road,Bombay-400 071.…Petitioner Versus 1. The Assistant Commissioner of Income-taxCircle 2(1)(1), Room No.561, 5[th] Floor,Aayakar Bhavan, Maharshi Karve Road,Mumbai-400 020 2. The Commissioner of Income tax-2,Aayakar Bhavan, Maharshi Karve Road,Mumbai-400 020. 3. Union of IndiaThrough the Secretary,Department of Revenue, Ministry of Finance, Government of India,North Block, New Delhi-110 001…Respondents *** Mr. Madhur Agarwal i/b Atul K. Jasani for the Petitioner.Mr. Suresh Kumar for the Respondents. *** CORAM : DHIRAJ SINGH THAKUR & KAMAL KHATA, JJ. RESERVED ON : 4 JANUARY 2023 PRONOUNCED ON : 10 FEBRUARY 2023 : J U D G M E N T : Per DHIRAJ SINGH THAKUR, J. .In the present Petition, the Petitioner challenges the noticedated 27 March 2015 issued by Respondent No.1 issued underSection 148 of the Income Tax Act, 1961 (“the Act”) for the purposeof reopening of the assessment for the assessment year 2008-09.The Petitioner also challenges the Order dated 16 December 2015passed by Respondent No.1 rejecting objections fled by thePetitioner challenging the validity of the re-assessmentproceedings. 2Briefly stated the material facts are as under : 3The Petitioner claims that it is engaged in the business ofpharmaceutical formulations. M/s Solvay Pharma India Ltd., whichwas engaged in a similar business, was merged with the Petitionercompany with effect from 1 January 2011. The present Petition iswith regard to the assessment pertaining to assessment year 2008-09 and accordingly it is stated that reference to the Petitioner in thepresent Petition should be deemed to mean and include reference tothe erstwhile Solvay Pharma India Limited. Chittewan 4A return of income was fled for the assessment year 2008-09on 30 September 2008, in which the Petitioner inter alia claimedRs.48,34,49,690/- as expenditure on gifts as a part of salespromotion expenses. Besides this, the Petitioner claimed anamount of Rs.2,24,14,000/- as expenditure on account ofdistribution of samples of medicines manufactured by the Petitionerand debited under the category ‘physician sample’. Both theseexpenses were claimed as deduction in computing the total incomeof the Petitioner. 5The Petitioner’s case was selected for scrutiny assessment. Adetailed questionnaire dated 9 August 2011 was served upon thePetitioner requiring the Petitioner to furnish the details as regards : (i) Publicity and propaganda(ii) Legal and professional(iii) Conference Expenses 6A detailed response dated 23 November 2011 was fled to theaforesaid show cause notice under Section 143(2) of the Act givingdetails as were sought. The same are also on record in the presentPetition. 7Finally an Order of assessment came to be passed underSection 144C read with Section 143(3) of the Act. 8With regard to issue of dis-allowance on account of giftexpenses, the Order of assessment reads as under : 5The Petitioner’s case was selected for scrutiny assessment. Adetailed questionnaire dated 9 August 2011 was served upon thePetitioner requiring the Petitioner to furnish the details as regards : (i) Publicity and propaganda(ii) Legal and professional(iii) Conference Expenses 6A detailed response dated 23 November 2011 was fled to theaforesaid show cause notice under Section 143(2) of the Act givingdetails as were sought. The same are also on record in the presentPetition. 7Finally an Order of assessment came to be passed underSection 144C read with Section 143(3) of the Act. 8With regard to issue of dis-allowance on account of giftexpenses, the Order of assessment reads as under : “The assessee had claimed gifts amounting toRs.2,31,82,889/- during the year as apart of salepromotion expenses. The assessee was asked to furnishthe details of these gifts made along with the name ofthe recipient of the gift, the reason for giving these giftsand resultant beneft accrued to the company. Theassessee was not able to furnish these details, in asmuch as the names of the recipients could not befurnished. Accordingly, the genuineness of theseexpenses is in doubt and the assessee has not been ableto establish that these have been incurred wholly andexclusively for the purpose of business. Accordingly, onan estimate basis, 10% of these expenses are disallowedand an addition of Rs.23,18,288/- is made to the totalincome of the assessee. Penalty proceedings u/s 271(1)(c) have been initiated.” 9Notice dated 27 March 2015 impugned in the present Petition,was issued under Section 148 of the Act, which sought to re-assessthe income of the Petitioner for the assessment year 2008-09 on theground that the assessessing offcer had reason to believe that theincome of the Petitioner for the relevant assessment year hadescaped assessment within the meaning of Section 147 of the Act.Reasons were furnished to the Petitioner vide communication dated9 September 2015, which read as under : “Board vide Circular No.5/2012 (F.No.225/142/2012-ITA.II), dated 01.08.2012 stated that Indian MedicalCouncil (Professional Conduct, Etiquette and Ethics)Regulations, 2002 (the regulations) on 10.12.2009imposed a prohibition on the medical practitioner andtheir professional associations from taking any Gift,Travel facility, Hospitality, Cash or monetary grantfrom the pharmaceutical and allied health sectorIndustries). Section 37(1) of Income Tax Act provides fordeduction of any revenue expenditure (other thanthose failing under Sections 30 to 36) from thebusiness Income if such expense is laid out/expendedwholly or exclusively for the purpose of business orprofession. However, the explanation appended to thissub-section denies claim of any such expenses, if thesame has been incurred for a purpose which is eitheran offence or prohibited by law. Thus, the claim of any expense incurred inproviding above mentioned or similar freebees inviolation of the provisions of Indian Medical Council(Professional Conduct, Etiquette and Ethics)Regulations, 2002 is not be admissible under Section37(1) of the Income Tax Act being an expenseprohibited by the law. Verifcation of records revealed that the assesseehad debited expenses on physician sample of Rs.224.14lakhs. It was further noticed that the assessee hadincurred expenses on gift item given to healthcareprofessional of Rs.231.82 lakhs. The expenses as gifts,travel facility, hospitality, cash or money grant given tomedical practitioner and their professionalassociations are prohibited as per above circular. TheBoard Circular is retrospective in nature andapplicable to A.Y. 2008-09 also. Verifcation of records revealed that the assesseehad debited expenses on physician sample of Rs.224.14lakhs. It was further noticed that the assessee hadincurred expenses on gift item given to healthcareprofessional of Rs.231.82 lakhs. The expenses as gifts,travel facility, hospitality, cash or money grant given tomedical practitioner and their professionalassociations are prohibited as per above circular. TheBoard Circular is retrospective in nature andapplicable to A.Y. 2008-09 also. Therefore, I have reason to believe that incomechargeable to tax has escaped assessment for A.Y.2008-09 by reason of the failure on the part of theassessee to disclose fully and truly all material factsnecessary for assessment. Accordingly, theassessment for A.Y. 2008-9 is reopened u/s 147 byissue of notice u/s 148 of the I.T. Act 1961. The noticeis being issued of the seeking approval for re-opening 10From a reading of the reasons, it thus, becomes clear thatthe basis for re-opening of the assessment was based upon thefollowing :- (i) that the Indian Medical Council (ProfessionalConduct, Etiquette and Ethics) Regulations, 2002 on10 December 2009 imposed a prohibition on themedical practitioner and their professionalassociations form taking any Gifts, Travel facility,Hospitality, Cash or monetary grant from thepharmaceutical and allied health sector industries.Conduct, Etiquette and Ethics) Regulations, 2002 on10 December 2009 imposed a prohibition on themedical practitioner and their professionalassociations form taking any Gifts, Travel facility,Hospitality, Cash or monetary grant from thepharmaceutical and allied health sector industries. (iii) that the Board had issued a Circular No.5 of 2012 inthat regard.that regard. (iii) that since there was a prohibition as referred toabove, by explanation to Section 37(1), whichenvisages denial of expenses which are incurred forthe purpose, either offence or prohibited by law.above, by explanation to Section 37(1), whichenvisages denial of expenses which are incurred forthe purpose, either offence or prohibited by law. (iv) that the claim of the expenses being expenses prohibited by law were inadmissible under Section 37(1).prohibited by law were inadmissible under Section 37(1). (v)that, therefore, the expenses incurred on gift items,travel facility, hospitality, cash or monetary grantgiven to the heath care professionals amounting toRs.231.82 lakhs being prohibited, could not havebeen allowed as revenue expenditures.travel facility, hospitality, cash or monetary grantgiven to the heath care professionals amounting toRs.231.82 lakhs being prohibited, could not havebeen allowed as revenue expenditures. (vi) that the assessing offcer had reason to believe thatthe income chargeable to tax escaped assessment byreason of the failure on the part of the assessee todisclose fully and truly all material facts necessaryfor assessment.the income chargeable to tax escaped assessment byreason of the failure on the part of the assessee todisclose fully and truly all material facts necessaryfor assessment. 11Objections were fled to the reopening notice issued underSection 148 of the Act, which came to be rejected by virtue of the Order dated 16 December 2015. In its Order dated 16 December2015, while rejecting the objections to re-opening, the assessingoffcer inter alia held as under : “2. …… (vi) that the assessing offcer had reason to believe thatthe income chargeable to tax escaped assessment byreason of the failure on the part of the assessee todisclose fully and truly all material facts necessaryfor assessment.the income chargeable to tax escaped assessment byreason of the failure on the part of the assessee todisclose fully and truly all material facts necessaryfor assessment. 11Objections were fled to the reopening notice issued underSection 148 of the Act, which came to be rejected by virtue of the Order dated 16 December 2015. In its Order dated 16 December2015, while rejecting the objections to re-opening, the assessingoffcer inter alia held as under : “2. …… Para 2.1.2 – The assessee has claimed expenditureunder the head ‘physicians Sample’ and ‘Gifts toHealthcare Professionals’ at Rs.224.14 lacs andRs.231.82 lakhs respectively. These expenditures areconsidered as non-admissible being prohibited by law.The assessee to that extent has failed to disclose fulland true materials facts. The assessee was aware ofthe decision taken on 18.12.2009 by the MedicalCouncil and thus should not have claimed suchdeduction. Even otherwise the claim being prohibitedby law can be withdraw by re-opening of the case.” 12The basis of the challenge to the re-opening of the assessmentis primarily on the ground, frstly, that there was no failure on thepart of the Petitioner to disclose fully and truly the material factswhich was a condition precedent as per Section 147. Secondly, thatthe action for re-assessment was nothing but a change of opinionand, lastly, that there was no tangible material based upon whichthe assessment could be re-opened. 13Mr. Suresh Kumar, learned Counsel for the Revenue, on theother hand, contended that the case of the Petitioner was a ft casefor re-opening inasmuch as a claim which was otherwise prohibited by the terms of regulations framed by Medical Council of Indiacould not have been allowed as deduction in terms of the specifcprohibition contained under Section 37(1) of the Act. It is statedstated that the Board Circular dated 1 August 2012 had reiteratedthe regulations of Medical Council of India and that it wereretrospective in nature and applicable for the assessment year2008-09 also. 14We have heard learned Counsel for the parties. 15Admittedly, the impugned notice issued under Section 148 ofthe Act in the present case had been issued on 27 March 2015 inregard to assessment year 2008-09. It was, thus, issued beyond theperiod of four years from the end of the relevant assessment year.According to the proviso to Section 147, in a case where anassessment under sub-section (3) of Section 143 or this Section hasbeen made for the relevant assessment year, no action shall betaken under this section after the expiry of four years from the endof the relevant assessment year, unless any income chargeable tothe tax has escaped assessment for such assessment year by reasonof the failure on the part of the assessee to make a return underSection 139 or in response to a notice issued under sub-section (1) of Section 142 or Section 148 or to disclose inter alia fully and trulyall material facts necessary for his assessment for that assessmentyear. It is also an admitted fact that in the present case the Orderof assessment dated 16 December 2015 passed by the assessingoffcer was an Order under Section 143(3) of the Act. of Section 142 or Section 148 or to disclose inter alia fully and trulyall material facts necessary for his assessment for that assessmentyear. It is also an admitted fact that in the present case the Orderof assessment dated 16 December 2015 passed by the assessingoffcer was an Order under Section 143(3) of the Act. 16On the basis of the reasons furnished to the Petitioner, whichform basis for re-assessment, it is seen that while the assessingoffcer had alleged that that the assessee had failed to disclose fullyand truly all material facts necessary for assessment, the reasonsdo not at all reflect as to what were those material facts, which hadnot been disclosed by the Petitioner, which if disclosed would haveled the assessing offcer to bring to tax such income in the scrutinyassessment. Infact, in the case of Hindustan Lever Ltd. Vs. R.B.Wadkar, Assistant Commissioner of Income-Tax and Others[1], thisCourt held : “ …….The reasons recorded should be clear andunambiguous and should not suffer from anyvagueness. The reasons recorded must disclose hismind. The reasons are the manifestation of the mindof the Assessing Offcer. The reasons recorded shouldbe self-explanatory and should not keep the assesseeguessing for the reasons. Reasons provide the linkbetween conclusion and evidence. The reasonsrecorded must be based on evidence. The Assessing Offcer, in the event of challenge to the reasons, mustbe able to justify the same based on material availableon record. He must disclose in the reasons as to whichfact or material was not disclosed by the assesseefully and truly necessary for assessment of thatassessment year, so as to establish the vital linkbetween the reasons and evidence. That vital link isthe safeguard against arbitrary reopening of theconcluded assessment.” 17On a perusal of the reasons furnished to the Petitioner andreferred to in earlier paragraphs hereinabove, it is clear that theassessing offcer had not at all discussed as to what was thematerial which was not disclosed by the assessee fully and truly,which was otherwise necessary for assessment. On the contrary, itcan be seen from the record that during the scrutiny assessment,the assessing offcer had called upon the Petitioner to give requisitedetails as regards the claim on account of expenses incurred onpublicity and propaganda, which were furnished by virtue ofcommunication dated 23 November 2011. Although in the Order ofassessment, the assessing offcer had entertained a doubt regardinggenuineness of the expenses, which as per him had not at all beenestablished to have been incurred wholly and exclusively for thepurpose of business, yet he had proceeded to disallow on anestimate basis expenses to the tune of 10 per cent and made anaddition of Rs.2,31,82,889/- to the total income of the assessee. Therefore, it cannot be said that the Petitioner had not disclosed therelevant material facts during the assessment proceedings. ThePetitioner was only obliged to disclose the material primary factsand was certainly not obliged to refer to the statutory provisions orthe regulations of 2002 at the time of fling the return or during thecourse of the assessment proceedings. 18The argument of learned Counsel for the Revenue justifyingan action of the assessing offcer for re-opening the assessment isuntenable for the reason that the assessment u/s 143(3) of the Actcould only be re-opened in terms of Section 147 of the Act and nototherwise. The argument that the claim was allowed contrary tothe Board Circular issued in the year 2012 would not by itselfauthorize the assessing offcer unless the jurisdictional conditionsprescribed under the proviso to Section 147 had been satisfed,which in the present case, does not appear to have been satisfed atall. The impugned notice is liable to be quashed and set aside onthis ground alone. 18The argument of learned Counsel for the Revenue justifyingan action of the assessing offcer for re-opening the assessment isuntenable for the reason that the assessment u/s 143(3) of the Actcould only be re-opened in terms of Section 147 of the Act and nototherwise. The argument that the claim was allowed contrary tothe Board Circular issued in the year 2012 would not by itselfauthorize the assessing offcer unless the jurisdictional conditionsprescribed under the proviso to Section 147 had been satisfed,which in the present case, does not appear to have been satisfed atall. The impugned notice is liable to be quashed and set aside onthis ground alone. 19The other contention of Mr. Madhur Agarwal, learned Counselfor the Petitioner was that the Circular dated 1 August 2012 issuedby the CBDT and the amendment incorporated in regulation 6.4 of the Regulations of 2002 in 2009 were not at all applicable to theassessment year 2008-09 and, therefore, it was urged that theassessing offcer could not have any basis for his ‘reason to believe’that the claim was prohibited in terms of Section 37 r/w the CBDTcircular dated Circular No.5/2012 (F.No.225/142/2012-ITA.II), dated01.08.2012 and the regulations of 2002. 20In this context it becomes necessary to briefly refer to theregulations of 2002 as also the CBDT circular dated 1 August 2012. 21The Medical Council of India in exercise of powers conferredunder the MCI Act 1956 framed the regulations called the IndianMedical Council (Professional Conduct, Etiquette and Ethics)Regulations, 2002. These regulations pertain to the professionalconduct, etiquette and ethics for medical practitioners. 22Chapter 6 of the regulations in particular deals with certainacts which would be construed as unethical like advertising hisprofessional skill or practice soliciting patients directly orindirectly etc. Regulation 6.4 of the said regulations envisaged as under : 6.4 Rebates and Commission: 6.4.1 A physician shall not give, solicit, or receive nor shallhe offer to give solicit or receive, any gift, gratuity,commission or bonus in consideration of or return forthe referring, recommending or procuring of anypatient for medical, surgical or other treatment. Aphysician shall not directly or indirectly, participatein or be a party to act of division, transference,assignment, subordination, rebating, splitting orrefunding of any fee for medical, surgical or othertreatment.he offer to give solicit or receive, any gift, gratuity,commission or bonus in consideration of or return forthe referring, recommending or procuring of anypatient for medical, surgical or other treatment. Aphysician shall not directly or indirectly, participatein or be a party to act of division, transference,assignment, subordination, rebating, splitting orrefunding of any fee for medical, surgical or othertreatment. 6.4.2Provisions of para 6.4.1 shall apply with equal force tothe referring, recommending or procuring by aphysician or any person, specimen or material fordiagnostic purposes or other study/work. Nothing inthis section, however, shall prohibit payment orsalaries by a qualifed physician to other duly qualifedperson rendering medical care under his supervision.the referring, recommending or procuring by aphysician or any person, specimen or material fordiagnostic purposes or other study/work. Nothing inthis section, however, shall prohibit payment orsalaries by a qualifed physician to other duly qualifedperson rendering medical care under his supervision. 23However, vide notifcation dated 10 December 2009 theaforementioned regulations were amended to include Clause 6.8.This was incorporated for the reason that the existing regulationsprescribed conditions and regulations for medical practitioners onlyand did not cover their relationship with the pharmaceutical andallied health industry. The regulation prescribed as under : 23However, vide notifcation dated 10 December 2009 theaforementioned regulations were amended to include Clause 6.8.This was incorporated for the reason that the existing regulationsprescribed conditions and regulations for medical practitioners onlyand did not cover their relationship with the pharmaceutical andallied health industry. The regulation prescribed as under : 6.8.1 In dealing with pharmaceutical and allied health sector industry; a medical practitioner shallfollow and adhere to the stipulations givenbelow :- (a) Gifts : A medical practitioner shall not receiveany gift from any pharmaceutical or allied healthcare industry and their sales people orrepresentatives.any gift from any pharmaceutical or allied healthcare industry and their sales people orrepresentatives. (b)Travel facilities : A medical practitioner shall notaccept any travel facility inside the country oroutside, including rail, air, ship, cruise tickets,paid vacations, etc. from any pharmaceutical oralliedhealthcareindustryortheirrepresentatives for self and family members forvacation or for attending conferences, seminars,workshops, CME programme etc. as a delegate.accept any travel facility inside the country oroutside, including rail, air, ship, cruise tickets,paid vacations, etc. from any pharmaceutical oralliedhealthcareindustryortheirrepresentatives for self and family members forvacation or for attending conferences, seminars,workshops, CME programme etc. as a delegate. (c)Hospitality : A medical practitioner shall notaccept individually and hospitality like hotelaccommodation for self and family membersunder any pretext.accept individually and hospitality like hotelaccommodation for self and family membersunder any pretext. (d)Cash or monetary grants : A medical practitionershall not receive any cash or monetary grantsfrom any pharmaceutical and allied healthcareindustry for individual purpose in individualcapacity under any pretext. Funding for medicalresearch, study etc. can only be received throughapproved institutions by modalities laid down bylaw/rules/guidelines adopted by such approvedinstitutions, in a transparent manner. It shallshall not receive any cash or monetary grantsfrom any pharmaceutical and allied healthcareindustry for individual purpose in individualcapacity under any pretext. Funding for medicalresearch, study etc. can only be received throughapproved institutions by modalities laid down bylaw/rules/guidelines adopted by such approvedinstitutions, in a transparent manner. It shall always be fully disclosed. (e)…..(f)…..(g)…..(h)….. 24It was in the aforementioned backdrop that the Board issuedthe Circular No.5/2012 dated 1 August 2012 for sensitizing itsoffcers that receipt of gifts, cash, travel facilities and hospitalityfrom the pharmaceutical or allied health sector being prohibitedunder the regulations of 2002 would be inadmissible under Section37 being prohibited by law. The Circular reads as under : “Inadmissibility of expenses incurred in providingfreebees to Medical Practitioner by Pharmaceuticaland allied Heath Sector Industry. It has been brought to the notice of the Board thatsome pharmaceutical and allied health sectorIndustries are providing freebees (freebies) to medicalpractitioners and their professional associations inviolation of the regulations issued by Medical Councilof India (the ‘Council’) which is a regulatory bodyconstituted under the Medical Council Act, 1956. 2.The council in exercise of its statutorypowers amended the Indian Medical Council(Professional Conduct, Etiquette and Ethics)Regulations, 2002 (the regulations) on 10-12-2009imposing a prohibition on the medical practitionerand their professional associations from taking anyGift, Travel facility, Hospitality, Cash and monetarygrant from the pharmaceutical and allied health sector industries. It has been brought to the notice of the Board thatsome pharmaceutical and allied health sectorIndustries are providing freebees (freebies) to medicalpractitioners and their professional associations inviolation of the regulations issued by Medical Councilof India (the ‘Council’) which is a regulatory bodyconstituted under the Medical Council Act, 1956. 2.The council in exercise of its statutorypowers amended the Indian Medical Council(Professional Conduct, Etiquette and Ethics)Regulations, 2002 (the regulations) on 10-12-2009imposing a prohibition on the medical practitionerand their professional associations from taking anyGift, Travel facility, Hospitality, Cash and monetarygrant from the pharmaceutical and allied health sector industries. 3Section 37(1) of Income Tax Act provides fordeduction of any revenue expenditure (other thanthose falling under sections 30 to 36) from thebusiness Income if such expense is laid out/expendedwholly or exclusively for the purpose of business orprofession. However, the explanation appended tothis sub-section denies claim of any such expense, ifthe same has been incurred for a purpose which iseither an offence or prohibited by law. Thus…. 4. It is…..” 25It is, thus, clear that the Circular No.5/2012 referred to theposition of the regulations of 2002 after its amendment in the year2009 and, therefore, neither the circular nor regulation 6.8incorporated w.e.f. 10 December 2009 would be applicable to theinstant case pertaining to assessment year 2008-09. 26 It is settled that law to be applied is the one that is in force inthe relevant assessment year, unless otherwise provided expresslyor by necessary implication - CIT Vs. Insthmian Steamship Lines[2]and Reliance Jute & Industries Ltd. Vs. Commissioner of Income-tax[3]. 2[1951] 20 ITR 572 (SC) 3[1979] 2 Taxman 417 (SC) 27Learned Counsel for the Respondents, Mr. SureshKumar, placed reliance upon the case of Apex Laboratories (P) Ltd.Vs. Deputy Commissioner of Income-tax LTU[4]. This was a casewhere the assessee being a pharmaceutical company had incurredexpenditure by giving freebies to the medical practitioners andaccordingly, claimed exemption for the said expenditure underSection 37(1) of the Act for the assessment year 2010-11. Theassessing offcer partially allowed the exemption claimed by theassessee on the expenses so incurred by placing reliance uponCircular No.5/12. The CIT (Appeals), Tribunal, as also thejurisdictional High Court upheld the said Order and subsequently,also by the Apex Court. 28However, in the aforementioned case, two features needs to behighlighted, frstly, that the claim before the Apex Court pertainedto the assessment yea 2010-11, to which amendment incorporatedin the Regulations 2009 was squarely applicable. The second thingwhich needs to be highlighted is that in the aforementioned case,the revenue had permitted partial exemption for expenses incurredtill 14 December 2009 and held the assessee eligible for the beneftunder Section 37(1) but disallowed the expenses incurredthereafter in view of the amendment of 2009. The Apex Court in4[2022] 135 taxmann.com 286 (SC) fact in the judgment Apex Laboratories (P.) Ltd. (supra), has alsoclearly held that “the CBDT Circular being clarifcatory in natureand was in effect from the date of implementation of Regulation 6.8of 2002 Regulations, i.e. from 14 December 2009.” 29In our opinion, since the CBDT Circular No.5/12 as alsoRegulation 6.8 of 2002, were not applicable to the case of thePetitioner for the relevant assessment year 2008-09, there wouldbe no tangible material or basis for the assessing offcer to have‘reason to believe’ that income for the said assessment year2008-09 had escaped assessment. 30Be that as it may, we allow this Petition and set asidethe impugned notice 27 March 2015 and impugned Order dated16 December 2015 are quashed with no Order as to costs. fact in the judgment Apex Laboratories (P.) Ltd. (supra), has alsoclearly held that “the CBDT Circular being clarifcatory in natureand was in effect from the date of implementation of Regulation 6.8of 2002 Regulations, i.e. from 14 December 2009.” 29In our opinion, since the CBDT Circular No.5/12 as alsoRegulation 6.8 of 2002, were not applicable to the case of thePetitioner for the relevant assessment year 2008-09, there wouldbe no tangible material or basis for the assessing offcer to have‘reason to believe’ that income for the said assessment year2008-09 had escaped assessment. 30Be that as it may, we allow this Petition and set asidethe impugned notice 27 March 2015 and impugned Order dated16 December 2015 are quashed with no Order as to costs. (KAMAL KHATA, J.) (DHIRAJ SINGH THAKUR, J.) Digitally signed byRAJESHRAJESH VASANTVASANTCHITTEWANCHITTEWANDate: 2023.02.1018:40:52 +0530