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6. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. The ld. Authorized Representative (for short „A.R‟) for the assessee, at the very outset of the hearing of the appeal took us through the facts of the case. It was vehemently submitted by the ld. A.R, that the A.O merely on the basis of a change of opinion had reopened the concluded assessment of the assessee company, which was earlier framed by his predecessor under Sec.143(3), M/s Medley Pharmaceuticals Ltd. Vs. DCIT-10(2)(2) dated 27.03.2015. It was submitted by the ld. A.R that the reopening in the case of the present assessee was not based on any fresh material, but in fact, was on the basis of a new view arrived at in respect of the same material available on record. In support of his aforesaid contention the ld. A.R took us through the copy of the „reasons to believe‟ on the basis of which the concluded assessment of the assessee company was reopened. On the basis of the aforesaid facts, the ld. A.R submitted that as the issue as regards the allowability of the sales promotion expenses had been deliberated at length by the A.O in the course of the original assessment proceedings, and a conscious view as regards disallowance of part of such expenses was arrived at by him, reassessment proceedings could not have thereafter been initiated by the successor A.O merely for the purpose of substituting his view as against that arrived at by his predecessor. In order to drive home his contention that the issue under consideration was duly considered, and therein deliberated upon in the course of the original assessment proceedings, the ld. A.R took us through the submissions which were filed by the assessee with the A.O in the course of the original assessment proceedings, Page 52 of the Assesses Paper Book (for short „APB‟). Further, the ld. A.R took us through the original assessment order passed by the A.O under Sec. 143(3), dated 27.03.2015. The ld. A.R took us through Page 5 - Para 4 of the assessment order, which revealed that the A.O in the course of the assessment proceedings had called for the requisite details in respect of the Sales Promotion Expenses that were booked by the assessee during the year under consideration. It was pointed out by the ld. A.R, that the A.O while framing the assessment, had after considering the amendment carried out by MCI on 14.12.2009 in its Indian Medical Council (Professional Conduct, Etiquettes and Ethics) Regulations, 2002, which regulated the code of conduct of doctors and their professional associations as regards their relationship with pharmaceutical industries and allied health sector industry, and also the CBDT Circular No. 5, dated 01.08.2012, which debarred the pharmaceutical companies to claim M/s Medley Pharmaceuticals Ltd. Vs. DCIT-10(2)(2) deduction u/s 37(1) for expenses incurred on providing freebies to doctors, had disallowed the assessee‟s claim for expenses insofar the same related to the gifts given to the doctors to the tune of Rs.5,37,46,137/-. In sum and substance, it was the claim of the ld. A.R, that the A.O in the course of the regular assessment had arrived at a conscious view that in lieu of CBDT Circular No. 5, dated 01.08.2012 r.w the IMC (Professional Conduct, Etiquettes & Ethics) Regulation, 2002, out of the Sales Promotion Expenses of Rs.15,91,18,528/-, only the expenses incurred by the assessee for giving gifts to doctors of Rs.5,37,46,137/- were liable to be disallowed. As such, it was the claim of the ld. A.R, that now when the A.O while framing the original assessment, vide his order passed under Sec. 143(3), dated 27.03.2015, had formed an opinion that only the expenses of Rs. 5,37,46,137/- that were incurred by the assessee for giving gifts to doctors were to be disallowed pursuant to the CBDT Circular No. 5/2012, dated 01.08.2012 r.w. the IMC (Professional Conduct, Etiquettes & Ethics), Regulation, 2002, thereafter, merely on the basis of a „change of opinion‟, the successor A.O could not have reopened the concluded assessment of the assessee company with a purpose to disallow the other expenses. Adverting to the „reasons to believe‟ on the basis of which the concluded assessment of the assessee company was reopened by the A.O, it was the claim of the ld. A.R that the said reopening of the concluded assessment was sought not on the basis of any fresh tangible material, but in fact, on the basis of the same material that was available on record in the course of the original assessment proceedings.

M/s Medley Pharmaceuticals Ltd. Vs. DCIT-10(2)(2)

17. After deliberating at length on the issue under consideration, we find, that the issue that the expenses wholly and exclusively incurred by a pharmaceutical company in the normal course of its business towards gifts, travel facility, conference expenses or similar freebies to medical practitioners or their professional associations would not be hit by the „Explanation 1‟ to Sec. 37 of the Act, is covered by the order of a coordinate bench of the Tribunal i.e ITAT "A" Bench, Mumbai in the case of Aristo Pharmaceuticals Pvt. ltd. Vs. ACIT (ITA No. 6680/Mum/2012, dated 26.07.2018). In the aforesaid order, the Tribunal had after exhaustive deliberations observed, that a perusal of the provisions of the Indian Medical Council Act, 1956, revealed that the scope and ambit of the statutory provisions relating to professional misconduct of registered medical practitioners under the Indian Medical Council Act, 1956, is restricted only to the persons registered as medical practitioners with the State Medical Council and whose name is entered in the Indian Medical Register maintained under Sec. 21 of the said Act. Further, it was observed, that the scheme of the Indian Medical Council Act, 1956 neither deals with nor provides for any conduct of any association/society, and only regulates the conduct of registered medical practitioners and not the pharmaceutical companies or allied health sector industries. Apart from that, the Tribunal in its said order had also drawn support from the order of the Hon'ble High Court of Delhi in the case of MAX Hospital., Pitampura Vs. Medical Council of India [CWP No. 1334/2013, dated 10.01.2014]. In the aforesaid case, the Medical Council of India (MCI) had filed an „Affidavit‟ before the High Court, wherein it was deposed by the council that its jurisdiction was limited only to take action against the registered medical professionals under the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002, and it had no jurisdiction to pass an order affecting the rights/interest of the petitioner hospital. In the backdrop of its exhaustive deliberations the Tribunal had concluded that even if the assessee had incurred expenditure on distribution of „freebies‟ to doctors M/s Medley Pharmaceuticals Ltd. Vs. DCIT-10(2)(2) and medical practitioners, the same though may not be in conformity with the Indian Medical Council (Professional Conduct, Etiquette and Ethics) regulations, 2002, but then, as the same only regulates the code of conduct of the medical practitioners/doctors, therefore, in the absence of any prohibition on the pharmaceutical companies in incurring of such sales promotion expenses it cannot be held to have incurred an expenditure for a purpose which is an offence or is prohibited by law. The Tribunal while concluding as herein above had observed as under:

"20. We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record. We find that our indulgence in the cross appeals filed by the assessee and the revenue has been sought for adjudicating the allowability of the sales promotion expenses incurred by the assessee on the distribution of articles to the stockists, distributors, dealers, customers and doctors, in the backdrop of the CBDT Circular No. 5/2012, dated 01.08.2012 and the MCI regulations. We find that it is the case of the revenue that as per the CBDT Circular No. 5/2012, dated 01.08.2012 any expense incurred by a pharmaceutical or allied health sector industry in providing any "freebies" to medical practitioners or their professional associations in violation of the regulation issued by Medical Council of India which is a regulatory body constituted under the Medical Council Act, 1956, would be liable to be disallowed in the hands of such pharmaceutical or allied health sector industry or any other assessee which had provided such "freebies" and claimed the same as a deductible expense against its income in the accounts.

22. We shall now advert to the CBDT Circular No. 5/2012, dated 01.08.2012. We find that the aforesaid CBDT Circular reads as under:-

"Inadmissibility of expenses incurred in providing freebees to medical practitioner by pharmaceutical and allied health sector industry Circular No. 5/2012 [F.No. 225/142/2012-ITA.II], dated 1-8-2012 It has been brought to the notice of the Board that some pharmaceutical and allied health sector Industries are providing freebies (freebies) to medical practitioner and their professional M/s Medley Pharmaceuticals Ltd. Vs. DCIT-10(2)(2) associations in violation of the regulations issued by Medical Council of India (the „Council‟) which is a regulatory body constituted under the Medical Council Act, 1956