TaxTMI 
TaxTMI 
2023 (3) TMI 551
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....9;ble Tribunal; 2. That, the Ld. CIT (A) while passing the Impugned Order has assumed jurisdiction, outside the scope of its jurisdiction under the IT Act and has rendered a 'conclusive and a sweeping finding that the Appellant Company is in violation of "all related laws" pertaining to sales and marketing of infant and child nutrition food traded by the Appellant, including the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 (IC Regulations') and the Infant Milk Substitutes, Feeding Bottles and Infant Foods (Regulation of Production, Supply and Distribution) Act (in short 'IMS Act'): 3. That, the Ld. CIT (A) ought to have exercised jurisdiction and confined the scope of its enquiry limited to its powers conferred upon it under the IT Act. In the present case, the Ld. CIT (A) has illegally assumed jurisdiction under the IMC Regulations and IMS Act and has illegally rendered erroneous finding that the Appellant company is in violation of "all related laws" including the IMC Regulations and IMS Act, which are ex-facie without jurisdiction and uncalled for; 4. That, the Ld. CIT (A) ought to have confined its enquiry and findi....
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.... an order of a quasi-judicial authority given in violation of the principles of natural justice is an order without jurisdiction and a nullity; 10. That the finding of the Ld. CIT (A) that the Appellant company had violated all related laws pertaining to sales and marketing of infant and child nutrition food traded by it including the IMC Regulations and IMS Act is erroneous, based on wrongful interpretation of the provisions of the IMC Regulations and IMS Act by the Ld. CIT (A) in its own subject wisdom; 2. Briefly stated, facts of the case are that the assessee company is engaged in the business of trading of 'infant& 'children nutrition food'. For the year under consideration, the assessee filed return of income on 30.11.2012 declaring total income of Rs.3,67,59,810/- under section 139(1) of the Income-tax Act, 1961 (in short 'the Act'). The return of income filed by the assessee was selected for scrutiny and statutory notices under the Act were issued and complied with. In the scrutiny assessment completed u/s 143(3) of the Act, the Assessing Officer made disallowance of expenses on account of free samples amounting to Rs.1,66,083/- and disallowance of conference & seminar e....
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.... claim. Evidently, the appellant is consciously trying to escape verification in this regard. 6.4.Therefore, in the case of the appellant authenticity or genuineness ofthe claim was put in question by the AO. In conclusion, what remained unproven or dubious is reliability of expenses incurred, not its legitimacy. In this way, in absence of any verifiable data regarding expenditure incurred on distribution of free samples, estimated addition made by the AO appears to be justified. This ground of appeal is thus, decided against the appellant. 6.5.Before departing from this issue, it is pertinent to refer that referenceto the case of PHL (Pharma) (P) Ltd. will not come to the rescue of the appellant, as this decision no longer holds good after the decisions in the cases of Apex Laboratories (P.) Ltd., [2022] 135 taxmann.com 286 (SC) and Peerless Hospitex Hospital and Research Center Ltd., [2022] 137 taxmann.com 359 (Calcutta). discussed herein below. Therefore, on both counts addition made by the AO is upheld." 5.1 Before us, also no such list of recipients of free samples has been provided by the assessee. Further, on perusal of section 4 of the Infant Milk Substitutes, Feeding ....
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.... Hospitex Hospital and Research Center Ltd. [2002] 137 taxmann.com 359 (Calcutta). The Ld. CIT(A) also found the activity of the assessee in violation of provisions of Infant Foods (Regulation of Production, Supply and Distribution) Act, 1992. The relevant observations are reproduced as under: "8. As the appellant company has argued that being a trader of infant and child nutrition products it is not covered under "allied healthcare", let me briefly discuss the Infant Milk Substitutes, Feeding Bottles, and Infant Foods (IMS) Act. In 1992, India adopted the Infant Milk Substitutes, Feeding Bottles, and InfantFoods (IMS) Act. It was further amended in 2003 to strengthen certain provisions and close any loopholes infant formula companies had found. The IMS Act comprehensively bans all forms of promotion of foods marketed to children up to two years of age. It also bans sponsorship to health care professionals and health organizations by these infant formula companies. Violation of the IMS act is a criminal offense and may result in fines and imprisonment. 8.1 Thus, IMS Act prohibits: 1. Advertising and promotion of infant milk substitutes, feeding bottles, or infant foods. 2. ....
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.... under the relevant laws, the assessee's action invites for penalty/prosecution. The relevant observation of the Ld. CIT(A) is reproduced as under: "9. The appellant company conclusively had violated all related laws pertaining to sales and marketing of infant and child nutrition food traded by it. Whether it is violation of Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 ('IMC Regulations') or the Infant Milk Substitutes, Feeding Bottles, and Infant Foods (IMS) Act, the appellant's action calls for penalty &/or prosecution 9.1.This once again brings us to the judgment in the case of Peerless Hospitex Hospital and Research Center Ltd., [2022] 137 taxmann.com 359 (Calcutta), wherein the Hon'ble High court, after going through a plethora of case laws, including that of Apex Laboratories (P.) Ltd. (supra), held, 26.........In my considered opinion petitioner being a participant in an act which is an offence and is prohibited by law is not entitled for any deduction under section 37(1) of the Income-tax Act, 1961". Similar views were expressed by the Hon'ble Supreme Court while dealing with the case of Apex Laboratories (P....