ITA No. 5693/Mum/2025 & CO No. 306/MUM/2025 (A.Y. 2013-14)

Parties Involved

Facts Summary

The assessee company, Pfizer Limited, is engaged in the business of manufacturing and trading of pharmaceutical drugs and medicine. A survey under section 133B(2) of the Income-tax Act, 1961 was conducted on 24.08.2018. During the proceedings under section 201(1) of the Act, the Assessing Officer observed that the assessee had not deducted tax at source on the year-end provisions of Rs. 16,02,03,102/- and also failed to deduct TDS on stockist margins of Rs. 149,20,37,573/-. The AO passed an order under sections 201(1) and 201(1A) of the Act on 23.03.2020, raising a consolidated demand of Rs. 28,29,18,337/- for non-deduction of tax at source under sections 194C, 194H, 194I, and 194J of the Act. Aggrieved by the order of AO, the assessee preferred an appeal before the Commissioner of Income-Tax (Appeals). The CIT(A) allowed the assessee's appeal on both grounds by relying upon the decision of the ITAT in the appellant's own case for A.Ys. 2007-08, 2004-05, 2005-06, 2006-07, 2008-09, and 2009-10. Aggrieved by the order of CIT(A), the revenue has filed the present appeal and the appellant has raised cross-objection.…

Legal Issues

• 1. Whether the order of the Ld. Addl.CIT/JCIT (A) deleting the demand raised on account of non-deduction of TDS on Provisions created for expenses without appreciating the provisions of sub-section (2) of section 194C, Explanation (iv) to section 194H and Explanation (ii) to section 194I is contrary to law and to the facts and circumstances of the case?
• 2. Whether the Addl./JCIT(A) has erred in deleting the short/non deduction of tax by holding that in view of disallowance u/s 40(a)(i)/40(a)(ia), no demand can be raised u/s 201(1)/201(1A) of the Act?
• 3. Whether the learned Commissioner of Income-tax (Appeals) erred in directing the learned Assessing Officer to recompute/levy interest under section 201(1A) of the Income-tax Act, 1961 in relation to TDS on year-end provisions?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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