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Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI
ORDER
PER ANIL CHATURVEDI, AM:
This appeal filed by the assessee is directed against the order dated 14.09.2022 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) - Delhi relating to Assessment Year 2018-19.
Brief facts of the case as culled out from the material on record are as under :-
Inter Globle Aviation Ltd vs ACIT 2 3. Assessee is a company stated to be engaged in the business of operation of Airlines under the name and style of Indigo. Assessee electronically filed its return of income for A.Y. 2018-19 on 30.11.2018 declaring total income of Rs.18,26,11,80,910/-. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) r.w.s 144B of the Act vide order dated 19.04.2021 and the total income was determined at Rs.24,31,89,53,536/-.
Aggrieved by the order of AO, assessee carried the matter before CIT(A) who vide order dated 14.09.2022 dismissed the appeal of the assessee by observing that the captioned appeal has been settled by the assessee under Vivad-Se-Visvas Scheme 2020 and Form No.5 has already been issued. Aggrieved by the order of CIT(A), assessee is now in appeal before the Tribunal and has raised the following grounds:
Re: Incorrect dismissal of appeal owing to settlement under VsV Act
1. That on that facts and circumstances of the case, the order dated 14.09.2022 passed by Commissioner of Income Tax (Appeals), National Faceless Appeals Centre, Delhi (CIT(A)") [bearing DIN and Order No.: ITBA/NFAC/S/250/2022- 23/1045475421(1)] under section 250 of the Income Tax Act, 1961 (the Act) is patently erroneous and bad in law. 1.1 That the CIT(A) erred on facts and in law in dismissing the appeal filed by the appellant against the order dated 19.04.2021 passed by the assessing officer under section 143(3) read with section 144B of the Act erroneously holding that the appellant has opted for settlement under the Direct Tax Vivad se Vishwas Act, 2020 ('the VSV Act').
Inter Globle Aviation Ltd vs ACIT 3 1.2 That the CIT(A) erred on facts in not appreciating that the appellant had not opted for settlement of the aforesaid appeal filed against order passed under section 143(3) under the VSV Act [but had opted for settlement of an altogether different appeal filed before the CIT(A) against order passed under section 271DA of the Act for same assessment year] 1.3 That the impugned order passed by the CIT(A) dismissing the appeal, that too, without providing any opportunity of being heard to the appellant, is in gross violation of principles of natural justice and deserves to be set-aside/ reversed. WITHOUT PREJUDICE - ON MERITS Re: Validity of assessment order 2. That on the facts and circumstances of the case and in law, the CIT(A) erred in not appreciating that the assessment order dated 19.04.2021, having been passed by National Faceless Assessment Centre (herein under referred to as 'assessing officer"/"NaFAC) without following the mandatory procedure prescribed under section 144B of the Act was illegal, bad in law and liable to be quashed 2.1 That on the facts and circumstances of the case and in law, the CTT(A) erred in not appreciating that the assessment order was illegal and bad in law since the same was passed without issuing any draft assessment order or show cause notice for the variations proposed to be made to the returned income, which is in gross violation of provisions of Section 144B of the Act. 2.2 That the CIT(A) erred in not appreciating that the assessment proceedings were completed without providing adequate opportunity of being heard to the appellant, including personal/ video hearing, in gross violation of mandatory provisions of section 144B of the Act and also principles of natural justice. 2.3 That the CIT(A) erred in not appreciating that the assessing officer made huge additions/ disallowances without judiciously appreciating/ considering the legal and factual
Inter Globle Aviation Ltd vs ACIT 4 contentions of the appellant and therefore, the assessment order is illegal and bad in law. Re: Incentive received in the form of credits erroneously treated as revenue receipt 3. That the CIT(A) erred on facts and in law in not deleting the addition of Rs.575,62,67,767/-, being amount of amortized "supplier credits" received from various suppliers of aircraft parts [mainly from IAE LLC], made by the assessing officer by holding the same to be revenue receipt, instead of capital receipt claimed by the appellant. 3.1 That on the facts and circumstances of the case and in law, "Supplier credits" represents consideration for selection of engine and other aircraft related parts to be fitted in the aircraft, which was a transaction on capital account and hence not liable to tax under the provisions of the Act. 3.2 That the assessing officer erred in not appreciating that that merely because the appellant had taken the aircraft on operating lease would not alter the character of the "Supplier credits" received from being a capital receipt to revenue receipt. 3.3 That the assessing officer erred in not appreciating that merely because the appellant had amortized the credits over the period of lease and netted off the proportionate credits with the amount of lease rental would not alter the character of the "Supplier credits".. 3.4 That the assessing officer erred on facts and in law in alleging that the supplier credits is nothing but commission taxable under the provisions of the Act.
3.5. That the assessing officer erred on facts and in law in not following the decision of the Tribunal in the appellant's own case for earlier assessment year(s) holding "Supplier credits" to be capital receipt, in gross violation of principles of judicial discipline.
Inter Globle Aviation Ltd vs ACIT 5 Re: Seat replacement cost treated as capital expenditure 4. That the CIT(A) erred on facts and circumstances of the case and in law in not deleting the disallowance of amounting to Rs.30,15,04,859 made by the assessing officer holding the expenditure on replacement of seats of the aircrafts to be capital expenditure. 4.1 Without prejudice, the assessing officer erred on facts and in law in not allowing depreciation on expenditure of Rs.30,15,04,859, held to be capital expenditure. Re: Others 5. That the CIT(A) erred on facts and in law in not directing the assessing officer to allow credit of TDS of Rs.62,95,03,115 against credit of Rs.63,41,41,846 claimed by the appellant, which were disallowed by the assessing officer without assigning reason therefor.
That the CIT(A) erred on facts and in law in not directing the assessing officer to delete interest levied/computed under sections 234B and 234C of the Act. The appellant craves leave to add, alter, amend or vary from the above grounds of appeal before or at the time of hearing.”
Assessee has also raised additional grounds which reads as under: “The applicant craves leave to raise the following by way of additional grounds of appeal: "
Ground No. 7: Deduction of duties paid under protest
6. Before us, at the outset, Learned AR submitted that CIT(A) had dismissed the appeal of the assessee for the reason that the impugned appeal has already been settled by the assessee under Inter Globle Aviation Ltd vs ACIT 6 VSV Scheme and Form No.5 has been allotted. He submitted that the aforesaid finding of CIT(A) is factually incorrect. He submitted that assessee had opted for VSV Scheme which was with respect to the appeal for penalty levied u/s 271DA and not with respect to the present appeal. To support his aforesaid contention, he pointed to Form No.1 & 2 filed by assessee for settlement of appeal filed u/s 271DA and the copy of which is placed at page 34 to 44 of the paper book. He thereafter pointed to Form No.3 being the certificate issued by PCIT under Sub Section (1) of Section 5 of Vivad Se Visvas Act, 2020 for the settlement of appeal filed u/s 271DA. He therefore, submitted that since CIT(A) has not decided the appeal on merits and has wrongly dismissed the appeal of the assessee, the matter be remitted to CIT(A) for fresh adjudication.
Learned DR did not pointed to any factual inconsistency in the submissions made by Learned AR.
We have heard the rival submissions and perused the material available on record. We find that the present appeal filed by the assessee is with respect to the order framed u/s 143(3) r.w.s 144B of the Act. Aggrieved by the aforesaid order of AO assessee had filed appeal before CIT(A). CIT(A) vide order dated 14.09.2022 had dismissed the appeal of the assessee by holding that since the appeal has already been disposed of under VSV scheme therefore, it is not maintainable. Before us, assessee has demonstrated the factual error in the findings of CIT(A). He has Inter Globle Aviation Ltd vs ACIT 7 further pointed that the appeal that was disposed under VSV Scheme was with respect to appeal against the penalty order passed u/s 271DA and not the appeal against the order passed u/s 143(3) r.w.s 144B of the Act. In such a situation, since CIT(A) has not decided the issue on merits, we are of the view that the issue needs to be re-adjudicated by CIT(A). We accordingly restore the appeal back to the file of CIT(A) and direct him to decide the appeal in accordance with law. Needless to state that CIT(A) shall grant adequate opportunity of hearing to both the parties. Thus the grounds of assessee are allowed for statistical purposes.
Since we have restored the issue back to the file of CIT(A), we are not adjudicating the grounds raised by the assessee on merits.