Bombay HC junks tax dept notice for re-assessment of Pfizer's income
This story was originally published at 17:59 IST on 20 March 2025
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NEW DELHI – The Bombay High Court on Thursday quashed the income tax department's notice for re-assessment of Pfizer Ltd.'s income for assessment year 2009-10 (Apr-Mar). The tax department had said that the income of Pfizer to the extent of INR 38.76 million had escaped assessment for assessment year 2009-10 and accordingly a notice was issued to the company.
"Therefore, in our view, the pre-condition required by first proviso to Section 147 of the (Income Tax) Act based on the admission made in the reasons for reopening are not satisfied and therefore on this short ground itself, the impugned notice dated Mar. 29, 2016 is required to be quashed and set aside," said the court.
According to the tax department, the income of Pfizer in assessment year 2009-10 was assessed at INR 1.15 billion after completion of scrutiny. The tax department said that the verification of records revealed that during the course of scrutiny, the assessing officer discussed allowance of promotional expenses by way of promotional articles, which are also known as reminder items in medical parlance.
The promotion articles are distributed to doctors for promotion of assessee's products. The assessing officer disallowed one-third of such expenses amounting to INR 19.38 million and allowed balance expense of INR 38.76 million on the ground that recipient details and documentary evidence thereof was not furnished, said the department. In view of a 2012 Central Board of Direct Taxes circular, the entire expenditure on promotional articles should have been disallowed. This resulted in under assessment of income by INR 38.76 million involving tax effect of INR 13.17 million, said the department.
On Thursday, the shares of Pfizer ended 1.2% higher at INR 4,115.35 on the National Stock Exchange. End
Reported by Surya Tripathi
Edited by Akul Nishant Akhoury
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