Marico Limited vs The Deputy Commissioner of Income Tax

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Marico Limited vs The Deputy Commissioner Of Income Tax ... on 18 March, 2026

Author: B. P. Colabawalla

Bench: B. P. Colabawalla

2026:BHC-OS:6999-DB

                                                              9-WP-1120-2026.doc

                  IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                      ORDINARY ORIGINAL CIVIL JURISDICTION

                            WRIT PETITION NO. 1120 OF 2026

       Marico Limited                                           .. Petitioner

                Versus

       The Deputy Commissioner of Income
       Tax, Circle 4(3)(1), Mumbai and Ors.                     .. Respondents

            Senior Advocate J.D. Mistri, a/w Adv. Priyanka Jain, Adv.
            Pankaj Soni, Adv. Avanish Patil, i/b Vaish Associates Advocates, for
            the Petitioner.

            Adv. Sushma Nagaraj, a/w Adv. Abhinav Palsikar, for the
            Respondents.

                            CORAM: B. P. COLABAWALLA &
                                        FIRDOSH P. POONIWALLA, JJ. DATE:      MARCH 18, 2026

       P. C. 1.              Heard Mr. Mistri learned Senior Counsel for the Petitioner and

       Ms. Sushma Nagaraj learned Counsel for the Respondents. An affidavit in

       reply dated 13th March 2026 has been filed by the Respondents. As pleadings

       are complete, with the consent of the parties we have heard the Petition

       finally at the admission stage. Accordingly, we issue Rule. The Respondents

       waive service. By consent of the parties, Rule is made returnable forthwith

       and heard finally.

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1. The above Writ Petition is filed challenging the notice dated 23rd

August, 2024 issued under Section 148A(b) of the Income Tax Act, 1961

("the IT Act "), an order dated 30th August, 2024 passed under [Section

148A(d)](https://indiankanoon.org/doc/21606493/) of the IT Act and a notice dated 30th August, 2024 issued under Section 148 of the IT Act issued by the jurisdictional assessing officer i.e.

Respondent No. 1 for Assessment Year 2018-19, mainly, on the following

grounds:

a) Reassessment proceedings are initiated based on a
change of opinion by Respondent No.1, and hence are
beyond jurisdiction.

b) Reassessment proceedings are initiated on the basis
of the opinion of the audit wing of the income tax
department, and not on any factual error or omission
in the original assessment order, and hence, the
reopening of assessment is invalid.

c) Reassessment proceedings have been undertaken
based on audit objections without any independent
application of mind by the assessing officer, and hence
reopening of assessment is bad in law .

d) Reassessment proceedings have been initiated and
continued by Respondent No.1 adopting diametrically
opposite and contradictory stands, with regard to

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findings arrived at in the preceding Assessment Year
2016-17, where on identical facts and information in
the form of audit objection, the proposed reassessment
proceedings were withdrawn as being contrary to well
settled law.

e) there is no question of income chargeable to tax
having escaped assessment in the present case as it is
well settled that deduction under Section 80G of the IT
Act in respect of expenses incurred on Corporate Social
Responsibility (CSR) is allowable.

f) the issuance of Section 148 notice by Respondent No.
1 is in contravention of the procedure prescribed for
faceless assessment of income escaping assessment
prescribed under Section 151A of the IT Act.
g) as the Petitioner had not been provided with a copy
of the purported prior approval obtained under Section
151 of the IT Act, the reassessment proceedings ought
to be struck down.

1. The relevant facts in the present case are that the Petitioner's

case was selected for complete scrutiny for the relevant Assessment Year.

This assessment culminated in an order dated 25th November, 2021, passed

by Respondent No.3, being the Assessment Unit, National Faceless

Assessment Centre, i.e. faceless assessing officer under Section 143(3) read

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with Sections 144C(3) and 144B of the IT Act, determining the total income at

Rs. 7,83,00,68,530/-.

1. One of the reasons for selecting the case for scrutiny, as recorded

in the assessment order itself, was "xii. Deduction from Total Income under

Chapter VI-A", which included deductions claimed by the Petitioner under Section 80G of the IT Act. In the Return of Income, the Petitioner had

disallowed the donations and expenses on account of CSR debited to Profit &

Loss Account in accordance with Explanation 2 to Section 37 of the IT Act in

"Schedule Part A-OI" of the Income -Tax Return (ITR). Some of the amounts

disallowed, which were paid to charitable trusts/institutions as donations,

were claimed as a deduction under Section 80G of the IT Act, amounting to

Rs. 8,29,31,138/- (eligible for deduction @50% i.e. Rs. 4,14,65,569/-). The

details of the donations on which deduction under Section 80G was claimed

in the Return of Income are given in the table below, and the same was

examined by the Respondent No.3 while completing the assessment under Section 143(3) of the IT Act:

Name of the Amount
PAN
Trust/Foundation Donated
Foundation to
5,30,05,853 AABCF1718L
Educate Girls
Give India 2,25,285 AABCG2322D

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             Jsw Foundation       25,00,000     AAATJ0601J
             Marathwada
                               50,00,000        AAATM4512B
             Navnirman Lokayat
             Marico Innovation
                                  2,22,00,000   AAGCM7606M
             Foundation 5.              In response to a notice dated 22nd September, 2019, issued

under Section 143(2), the Petitioner submitted complete details of the

amounts claimed under Section 80G of the IT Act alongwith copies of

donation receipts and certificates, vide reply dated 3rd October, 2019.

1. After considering the reply of the Petitioner, Respondent No.3

vide notice dated 16th September, 2021 asked for further supporting

documents and a reconciliation in relation to the claim of deductions under Section 80G arising from donations made to "Give India" and "Marico

Innovation Foundation" as the amount(s) of donation mentioned in the ITR

and the copy of actual receipts submitted by the Petitioner were not

matching. The said notice also required the Petitioner to show cause as to

why in the absence of the receipts, the corresponding deduction should not

be disallowed under Section 80G of the IT Act.

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1. Thereafter, vide notice dated 21st September, 2021, the

Petitioner was again issued a show cause notice cum draft order of

assessment, the relevant portion of which is reproduced below:

"17. 80G deduction:17.1. Assessee has claimed 50%
deduction on the amounts given to Give India and Marico
Innovation foundation of Rs. 2,25,285/- and 2,22,00,000/-
respectively u/s 80G. However, assessee has provided
receipts only for 1,45,680/- and 2,18,50,000/- in the above-
mentioned amount. Assessee is issued a notice u/s 142(1) to
reconcile the same and provide supporting documents.
However, assessee is yet to reply to the said notice. Hence it
is not possible for this office to verify the claim of the
assessee. Thus, assessee has not provided receipts for the
amount of 4,29,605/-. Accordingly, 50% of Rs.4,29,605/- i.e
Rs. 2,14,806/- of deduction u/s 80G is rejected. Penalty
proceedings u/s 270A for under reporting of income is
initiated separately."
8. The Petitioner, vide reply dated 23rd September, 2021,

submitted the complete details as asked for with the receipts for deduction

claimed under Section 80G of the IT Act. The Petitioner vide reply dated 25th

September, 2021 also stated that since the Petitioner had erroneously

considered the donation amount related to Give India at Rs. 2,25,285/-

instead of Rs. 2,21,503/-, hence a disallowance of 50% of Rs. 3782/- i.e.

Rs.1891/- can be effected out of the claim under Section 80G of the IT Act.

1.          After due verification and examination of the claim under [Section 80G](https://indiankanoon.org/doc/1846831/) of the IT Act and in view of the Petitioner's submissions, a total
   
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disallowance of 50% of donation of Rs. 3782/- i.e. Rs.1891/- was made under Section 80G in the original assessment order dated 25th November, 2021

under Section 143(3) read with Section 144C(3) read with Section 144B of the

IT Act, while the balance deduction on account of donation made to approved

donees was accepted and allowed.

1. Subsequently, an audit memo dated 22nd August, 2024, was

issued by the Internal Audit Wing of the Department stating that the

contributions made by the Petitioner towards CSR expenditure, which were

disallowed under Section 37 of the IT Act, had been claimed as a deduction

under Section 80G of the IT Act and therefore required to be disallowed.

1. Based solely on the aforesaid audit memo, Respondent No. 1

issued a notice dated 23rd August, 2024 under Section 148A(b) of the IT Act.

Respondent No. 1, thereafter, passed the impugned order dated 30th August,

2024 under Section 148A(d) of the IT Act, holding that income chargeable to

tax had escaped assessment in the case of the Petitioner and that it was a fit

case for issuance of a notice under Section 148 of the IT Act. Pursuant

thereto, a notice under Section 148 of the IT Act dated 30th August, 2024 was

issued to the Petitioner.

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1. In this factual backdrop, Mr. Mistri, the learned Senior

Advocate, urged that it is not in dispute that the claim of deduction under Section 80G of the IT Act was thoroughly scrutinised during the original

assessment proceedings and allowed after due consideration of the claim.

The assessment order itself records that one of the reasons for the selection of

the case for scrutiny was the deduction claimed under Chapter VI-A, which

included the deduction under Section 80G of the IT Act. The Petitioner had

also made the required disclosure regarding expenditure by way of CSR and

deductions under Section 80G of the IT Act, in the annual accounts, the tax

audit report and the Return of Income, which had already been considered

while passing the original assessment order. A portion of the deduction under Section 80G of the IT Act was specifically disallowed in the original

assessment order. It is the contention of the Petitioner that all the conditions

for the grant of deduction under Section 80G of the IT Act were fulfilled, and

the fact that the donations made are also part of amounts spent by way of

CSR is not a reason to disallow the claim.

1. Mr. Mistri further submitted that reassessment proceedings

have been initiated purely based on the audit objection, expressing a different

view on a question of law.

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1. It was contended that in accordance with well-settled law,

Respondent No.1 was required to take an informed decision on whether the

issue raised in the audit objection was, in the first place, valid, and

furthermore, had been considered and decided in the assessment

proceedings. It was urged that Respondent No.1 could not rely solely on an

audit objection and automatically issue a notice under Section 148 of the IT

Act.

1. The learned Senior Counsel also pointed out that for the

Assessment Year 2016-17, the Petitioner was issued a notice under [Section

148A(b)](https://indiankanoon.org/doc/187753113/) dated 25th May, 2022 based on various objections raised by the

Comptroller and Auditor General, which included inter alia the identical

issue as in the present Assessment Year. However, in relation to Assessment

Year 2016-17, vide order under Section 148A(d) of the IT Act dated 30th July,

2022, the proposed reassessment proceedings, in so far as the present issue is

concerned, were dropped by Respondent No.1 for the reason that during the

original assessment proceedings, the Petitioner had submitted all the

relevant details and certificates for claim under Section 80G and thus the

deduction was allowed only after verification of the documents. The claim of

deduction under Section 80G though based on donations which are

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disallowed in the computation of income since they were CSR expenses, is

prima facie acceptable.

1. It was contended that in view of the aforesaid, the impugned

reassessment proceedings for the present Assessment Year 2018-19 ought to

have been dropped as in the case of reassessment proceedings on this issue in

Assessment Year 2016-17.

1. On the other hand, Ms. Nagaraj, learned Counsel for the

Revenue, submitted that the records showed that Respondent No.1 had

independently examined the merit of the audit objection and came to the

conclusion that income had escaped assessment. The said decision stood

approved by the specified authority under Section 151(ii) of the IT Act. Post

the amendment in Section 148 by insertion of amended clause (ii) by [Finance

Act](https://indiankanoon.org/doc/75703920/) 2022, an audit objection is independently 'information' suggesting

escapement of income.

1. Ms. Nagaraj contended that reassessment proceedings had been

validly initiated under Section 147 on the basis of tangible material, and this

is not a mere change of opinion or mechanical adoption of an audit objection,

as alleged by the Petitioner. It was submitted that the said audit memo

specifically pointed out that deduction under Section 80G had been

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erroneously allowed on CSR expenditure, which is not permissible in view of

Explanation 2 to Section 37(1) read with the scheme of Section 80G of the IT

Act, and thus clearly constituted "information" within the meaning of clause

(ii) of Explanation 1 to Section 148 of the IT Act suggesting escapement of

income, thereby validly empowering the assessing officer to issue notice

under Section 148A(b) and thereafter under Section 148.

1. Having heard the parties, we are of the view that we need not go

into all the grounds and rival contentions. In the present case, it is clear that,

prior to the passing of the original assessment order, the Respondents have

looked into the relevant details and particulars of deductions claimed under Section 80G of the IT Act. Specific queries were raised vide notices dated 16th

September 2021 and 21st September 2021, each of which were duly

responded to by the Petitioner. It was clear from the ITR that CSR

expenditure, which had been disallowed in the return, had been claimed as

donations under Section 80G of the IT Act. Copies of receipts of donations

were also provided as proof of donation. All these details were clear from the

Return of Income. The Petitioner has, therefore, submitted a detailed

explanation along with supporting documents during the original assessment

proceedings, and the Respondents had taken a decision to allow the same.

We agree with Mr. Mistri's submission that the view that donations given to

                           MARCH 18, 2026

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eligible trusts would qualify for deduction under Section 80G of the IT Act,

even if the contribution is out of the CSR funds, is a possible view. Further,

clearly, Respondent No.1 has examined all these aspects while passing the

original assessment order.

1. It is settled law that the proceedings under Section 148 of the IT

Act cannot be initiated to review the earlier stand adopted by the assessing

officer. The assessing officer cannot initiate reassessment proceedings to

have a re-look or re-examine the documents that were filed and considered

by him in the original assessment proceedings. The principles governing the

reopening of concluded assessments have been consistently laid down by this

Court in several decisions, some of which are :

• Bharat Petroleum Corporation Ltd. v. ACIT: [2025] 176

taxmann.com 103 (Bom)

•    Shri Dilip Laximan Powar v. ITO : [2025] 474 ITR 72 (Bom)
  

• Lupin Ltd. V. DCIT: [2025] 172 taxmann.com 158 (Bom)

•         The aforesaid proposition has been again reiterated by a Division
  

Bench of this Court [to which one of us (B.P. Colabawalla, J.) was a party] in

                            MARCH 18, 2026

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the case of Sir Jamsetjee Jejeebhoy Charity Fund v. ITO : [2025]

180 taxmann.com 401 (Bom) In this case, the assessing officer passed an

order under Section 148A(d) by relying on an internal audit objection that

resolution of trustees was passed beyond due date of return and Form 10. The

assessing officer opined that the prescribed Form had ample space to clearly

mention the 'Specific Purpose' for which the amount had been accumulated.

He, thus, held that the Assessee had not complied with the provisions of Section 11(2), and disallowed the Assessee's claim for accumulation under Section 11(2) and added the same to the total income of the Assessee for

Assessment Year 2018-19. In this case, all the required documents and

information were given to the assessing officer during the original

assessment proceedings, which included the Resolution of the Trustees of the

Petitioner, as well as the information about the details of accumulation made

in the last 10 years and the details of utilisation, etc. The Division Bench,

after relying upon a decision of another Division Bench in the case of

Siemens Financial Services (P.) Ltd. v. Dy. CIT [2023] 154

taxmann.com 159/457 ITR 647 (Bombay) culled out the aforesaid

proposition that the Assessing Officer cannot now initiate proceedings under Section 148 of the IT Act to review the earlier stand adopted by the assessing

officer. The relevant extract of the decision in Sir Jamsetjee Jejeebhoy

Charity Fund (supra) is reproduced as under:

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"....

1. Further, after considering the facts and circumstances and
   perusing the record, we are of the view that the Assessing Officer
   has looked into the relevant details and particulars of
   accumulation during the course of the original assessment, and
   the Petitioner had provided all the details and documents during
   the original assessment proceedings. It is settled law that the
   proceedings under Section 148 of the Act cannot be initiated to
   review the earlier stand adopted by the Assessing Officer. The
   Assessing Officer cannot initiate reassessment proceedings to
   have a re-look or reexamine the documents that were filed and
   considered by him in the original assessment proceedings.

2. Our view is supported by the judgment of this Court in Chandrakant Narayan Patkar Charitable Trust v. ITO
   (Exemption) [2022] 138 taxmann.com 564/287 Taxman 685
   (Bombay). In this case, this Court has taken a view that when
   there is no tangible material or no new information and no fresh
   material was placed before the Revenue, then the Revenue cannot
   justify the reopening of the assessment. The reopening cannot be
   based on a change of opinion. In the present case, all the material
   particulars and documents were before the Assessing Officer
   when the original assessment was conducted. There is no new
   material before the Revenue, nor are there any new facts or
   information to justify the reopening of the assessment.
   ......

This decision in Siemens Financial (supra) is not affected by the
decision of the Hon'ble Supreme Court in Union of India v. Rajeev
Bansal (2024) 469 ITR 46 (SC) insofar as the present issue is
concerned. Therefore, we find that the reassessment proceedings
initiated by the 1st Respondent are not justified on any count. In
the present case, we find that the order initiating the re-
assessment has been based not only on a change of mind but also
on the nonapplication of the mind."

1. Similarly, in [Castrol India Ltd. v. Deputy Commissioner

of Income Tax](https://indiankanoon.org/doc/42094270/) [2024] 299 Taxman 71 (Bombay), the assessment was

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sought to be reopened as the Audit Wing of the Department had raised

objections with respect to original assessment order including in respect of

the grant of deductions under Section 80G of the IT Act. In this case, the

Petitioner had filed its Return of Income for the A.Y. 2017-18 declaring total

income of Rs.1043,79,64,000/- and made a disallowance of an amount of

Rs.15,27,42,467/- being the CSR amount in consonance with Explanation 2

to Section 37 of the IT Act. An amount of Rs.6,18,60,803/- (being 50% of the

aggregate donation) was deducted and claimed under Section 80G of the IT

Act. This amount was donation in respect of approved trusts/institutions, for

the purposes of Section 80G of the IT Act. The details of the donations were

given in the computation of income, which formed part of the Return of

Income. Prior to the passing of the original assessment order, the Assessing

Officer has raised queries, each of which were duly responded by Petitioner

and the copies of receipts of donations were also provided as proof of

donation. All these details were also included in the computation of income.

Accordingly, this Court held as under:-

"14. The notice providing the reasons to believe itself is based on
verification of the profit and loss account and computation of
income showing the amount of CSR expenses debited under the
head 'other expenses' and the said amount being added back and
claimed as deduction under Chapter VA as donation. The notice
further goes on to say that during the course of original
assessment proceedings, neither the AO has asked for any details
and information on this issue from Assessee nor has Assessee
volunteered any details.....

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1. From the perusal of the documents, two glaring facts emerge.
   One is that all material/documents necessary for computing the
   income were disclosed and submitted by Petitioner during the
   course of assessment proceedings leading to an irrefutable
   conclusion that there was no failure on the part of Petitioner to
   disclose fully and truly all material facts. Secondly, there is a
   notable absence of any fresh tangible material coming to the
   knowledge of the AO and the reopening of assessment is purely on
   a re-examination of the very same material on the basis of which
   the original assessment order was passed.

2. It is a well settled principle of law that an AO has no power to
   review and this power is not to be confused with the power to
   reassess. The Apex Court in CIT v. Kelvinator of India Ltd. [2010]
   187 Taxman 312/320 ITR 561/2 SCC 723, has reiterated that mere
   change of opinion cannot be a ground for reopening concluded
   assessment. The observations made in paragraphs 6 and 7 read
   as below:

.........

1. However, Assessing Officers without appreciating the true import of the aforesaid decision of the Supreme Court, continue to reopen assessments on the ground of income having escaped assessment despite the fact that all the material and information was already available with him while passing the original assessment order. Furthermore, while conclusive proof of escapement of income may not be necessary to reopen an assessment, the least that is required is a requisite belief based on tangible material which was Shivgan not accessible to the AO or that which was deliberately withheld by Assessee, which then would amount to non-disclosure of relevant information. When an assessment is sought to be reopened within a period of four years of the end of the relevant assessment year, the test to be applied is whether there is tangible material to do so. What is tangible is something which is not illusory, hypothetical or a matter of conjecture. An AO, who has plainly ignored relevant materials in arriving at an assessment acts contrary to law. The facts in the present case clearly show that the AO was infact in the knowledge of and in possession of all the relevant details regarding the deductions on account of CSR. The computation sheets, the tax audit report, the receipts from the donees and the other relevant documents were all provided and disclosed by Petitioner. It is thus

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a clear case of 'change of opinion' by the AO. The notice of
reopening assessment does not by any measure disclose any
material leave aside any information leading to formation of
cogent and requisite belief. ..."
The SLP against the aforesaid order has been dismissed vide order dated 7th

April, 2025 in [2025] 304 Taxman 658.

1. Applying the principles laid down by this Court to the facts of the

present case, the material on record clearly indicates that the deduction

claimed under Section 80G had been examined during the course of the

original scrutiny assessment. Queries were raised by Respondent No.3, the

Petitioner furnished complete details and supporting documents, and upon

consideration thereof, the assessment order dated 25th November, 2021,

came to be passed under Section 143(3) read with Sections 144C(3) and 144B of the IT Act, wherein the deduction was substantially allowed except for a

minor disallowance.

1. The reopening of the assessment has been initiated on the very

same material merely because the audit party has expressed a different view

regarding the allowability of the deduction.

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1. In our view, such reopening would amount to nothing but a

review of the earlier assessment order, which is not permissible under the

scheme of Section 147 of the IT Act.

1. In view of the foregoing discussion, we hereby quash and set

aside the (i) notice dated 23rd August, 2024 issued under Section 148A(b) of

the IT Act (Exhibit-A); (ii) order dated 30th August, 2024 passed under Section 148A(d) of the IT Act (Exhibit-B); (iii) notice dated 30th August,

2024 issued under Section 148 of the IT Act (Exhibit-C).

1. Rule is made absolute in the aforesaid terms and the Writ

Petition is also disposed of in terms thereof. However, there shall be no order

as to costs.

1. We clarify that we have expressed no opinion on the merits of

the other grounds raised in the Petition and have disposed of this Petition on

the sole ground that the impugned reassessment proceedings are based on a

mere change of opinion. All other contentions of the parties in respect of the

said proceedings are expressly kept open.

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1.         This order will be digitally signed by the Private Secretary/
   
                 Personal Assistant of this Court. All concerned will act on production by fax
   
                 or email of a digitally signed copy of this order.
   
                 [FIRDOSH P. POONIWALLA, J.]                     [B. P. COLABAWALLA, J.]
   
                                                MARCH 18, 2026
                 Darshan Patil
   

Signed by: Darshan Patil
Designation: PA To Honourable Judge
Date: 24/03/2026 11:26:55