EDELMANN GMBH,GERMANY vs. ACIT CIRCLE INT TAX 1(2)(2), DELHI

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ITITA 29/DEL/2026Status: DisposedITAT Delhi11 May 2026AY 2020-218 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal noted that the assessee's legal grounds 1, 2, and 3 were not pressed. Regarding grounds 4 and 5, concerning the addition under Section 69A, the Tribunal observed that the DRP had directed the AO to verify the assessee's claim regarding the inadvertent filing of Form 15CA with amounts in INR instead of EUR and to verify Form 26AS, giving necessary credit. The DRP had stated that if the claim was correct, the addition should be deleted. However, the AO made the addition in the final assessment order. Upon reviewing the Forms 15CA and bank certificates, the Tribunal found that two amounts (INR 2,81,431 and INR 37,33,855) were received as interest on an ECB loan, with TDS deducted under Section 194LC by Edelmann India. The duplicate filing of Form 15CA was due to an error in reporting TDS in Rupees instead of Euros. Furthermore, INR 3,95,90,000/- was a repayment of an ECB loan principal, which is a capital transaction and not income. Consequently, the addition of INR 4,76,20,574/- was reduced by these amounts. The remaining interest income was subject to TDS under Section 194LC, exempting the assessee from filing a return under Section 115A(5). Therefore, the entire addition of INR 4,76,20,574/- was deleted. The Tribunal allowed the appeal.

What were the facts?

The assessee, Edelmann GMBH, a German company and holding company of Edelmann Packing India Pvt. Ltd., is in appeal against the assessment order dated 25.11.2025 passed by the Assessing Officer (AO) under Section 147 read with Section 144 of the Income Tax Act, 1961, pursuant to an order dated 28.10.2025 by the Dispute Resolution Panel (DRP) for Assessment Year 2020-21. The AO initiated reassessment proceedings based on information regarding fixed deposits, interest income, and remittances received by the assessee as per Form 15CA filed by Edelmann India. The assessee did not file a return, and subsequent notices were not complied with, leading to an ex-parte assessment. The primary dispute concerns an addition of INR 4,76,20,574/- made by the AO under Section 69A as unexplained money.

What were the issues?

1. Whether the AO correctly initiated reassessment proceedings under Section 148A(d) without issuing and serving a notice under Section 148A(b) on the appellant, rendering the proceedings bad in law, as per Section 148? - Assessee's contention: The AO initiated reassessment proceedings without issuing and serving the notice under Section 148A(b), ignoring Section 148, thus making the proceedings bad in law. - Revenue's contention: Not recorded. 2. Whether the AO completed reassessment proceedings without serving the notice under Section 148 on the appellant, rendering the reassessment order bad in law? - Assessee's contention: The AO completed reassessment without serving the notice under Section 148, making the order bad in law. - Revenue's contention: Not recorded. 3. Whether the AO incorrectly initiated reassessment proceedings under Section 148 by issuing a notice under Section 148A(b) without clearly showing any escapement of income through the alleged transactions? - Assessee's contention: The AO initiated reassessment under Section 148 by issuing a notice under Section 148A(b) without demonstrating any escapement of income. - Revenue's contention: Not recorded. 4. Whether the reassessment order is bad in law due to the AO acting in ignorance of DRP directions regarding verification of rectified Form 15CAs and passing a speaking order? - Assessee's contention: The AO ignored DRP directions by failing to verify rectified Form 15CAs (for amounts INR 2,81,431 and INR 37,33,855) filed to correct errors in earlier forms where amounts were stated in both INR and EUR, and by failing to pass a speaking order. - Revenue's contention: Not recorded. 5. Whether the AO incorrectly added income amounting to INR 4,76,20,574/- under Section 69A as unexplained money, when a portion pertained to loan principal repayment and the balance to interest on which TDS was deducted under Section 194LC? - Assessee's contention: The addition of INR 4,76,20,574/- under Section 69A is incorrect as INR 3,95,90,000/- is principal loan repayment (capital transaction) and the balance is interest income on which TDS under Section 194LC was deducted by Edelmann Packaging. - Revenue's contention: Not recorded. 6. Whether the reassessment order is bad in law as the AO incorrectly added income amounting to INR 4,76,20,574/- under Section 69A, ignoring that applicable tax was already deducted? - Assessee's contention: The addition under Section 69A is incorrect as applicable tax was already deducted. - Revenue's contention: Not recorded. 7. Whether the AO erred in holding that the Appellant underreported its income and initiating penalty proceedings under Section 270AA/AAC read with Section 115BBE and Section 272A(1)(d)? - Assessee's contention: The AO erred in holding underreporting of income and initiating penalty proceedings under Section 270AA/AAC, 115BBE, and 272A(1)(d). - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144C(5),Section 148A(d),Section 148A(b),Section 148,Section 69A,Section 194LC,Section 270AA,Section 270AAC,Section 115BBE,Section 272A(1)(d),Section 115A(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘D’, NEW DELHI

Before: SHRI VIKAS AWASTHY & SMT. RENU JAUHRI

For Appellant: Shri Peru Medhira, Advocate
For Respondent: Shri M.S. Netherpal, CIT DR
Hearing: 11.05.2026Pronounced: 11.05.2026

PER RENU JAUHRI : The assessee by filing the present appeal sought to set aside the impugned assessment order dated 25.11.2025 passed by the Assessing Officer [for short, AO] u/s 147 r.w.s 144 of the Income Tax Act, 1961 [hereinafter referred to as, “Act”] for A.Y. 2020-21 in consonance with the order dated 28.10.2025 passed by the Dispute Resolution Panel (for short, DRP) u/s 144C(5) of the Act.

2.

The assessee has raised following grounds of appeal: “1. On the facts and circumstances of the case and in law, the AO had passed an order under Section 148A(d) dated 18.03.2024

IT (IT)A No. 29/DEL/2026 Edelmann GMBH initiating reassessment proceedings without issuance and service of the notice under Section 148A(b) on the appellant in clear ignorance of Section 148, thereby rendering the entire reassessment proceedings as bad in law.

2.

On the facts and circumstances of the case and in law, the AO has completed reassessment proceedings without serving the notice under Section 148 dated 19.03.2024 on the appellant, thereby rendering the entire reassessment order as bad in law.

3.

On the facts and circumstances of the case and in law, the AO has incorrectly initiated reassessment proceedings under Section 148 by issuing a notice under Section 148A(b) without clearly showing any escapement of income thought the alleged transactions.

4.

On the facts and circumstances of the case and in law, the reassessment order is bad in law as the AO has acted in ignorance of DRP directions by:

i. Failing to verify whether the rectified Form 15CAs with Ack no. 460104791030419 (INR 2,81,431) and 460104781030419 (INR 37,33,855) were filed in order to correct the mistake in the earlier generated Form 15CAs with Ack no. 460055741010419 (INR 2,81,431) and 460055691010419 (INR 37,33,855).

ii. failing to verify that rectified Form 15CAs were filed merely to amend the error in earlier Form 15CAs wherein same amount was mentioned in both INR and EUR column.

iii. Failing to pass a speaking order for rejecting the contentions of the appellant

5.

On the facts and circumstances of the case and in law, the reassessment order is bad in law as the AO has incorrectly added income amounting to INR 4,76,20,574 under Section 69A of the Act as unexplained money in ignorance of the fact that out the said amount, INR 3,95,90,000 pertains to repayment of principal amount of loan and balance pertains to interest on which necessary tax has already been deducted under Section 194LC by Edelmann Packaging India Pvt Ltd.

6.

On the facts and circumstances of the case and in law, the reassessment order is bad in law as the AO has incorrectly added income amounting to INR 4,76,20,574 under Section 69A of the Act as unexplained money in the hands of appellant in ignorance of the 2 | P a g e

IT (IT)A No. 29/DEL/2026 Edelmann GMBH fact that necessary applicable tax has already been deducted under law. 7. That on facts and in laws, the AO has erred in holding that the Appellant has underreported its income in respect of each item of disallowance/ additions and in initiating penalty proceedings under Section 2701AAAC read with Section 115BBE and under section 272A(1)(d) of the Act. The Appellant craves leave to add, alter, modify or delete such other objections before or during the course of hearing before the Hon'ble Income Tax Appellate Tribunal ('ITAT'), so as to enable the Hon'ble ITAT to decide on the grounds raised by the Appellant, as per law.”

3.

At the outset, the Ld. Counsel for the assessee has submitted that the legal grounds nos. 1, 2 and 3 are not being pressed. Sole substantive issue in the case pertains to the addition of Rs. 476,20,574/- made on account of remittance received by the assessee from Edelmann Packing India Pvt. Ltd. on the basis of Form 15CAs filed by the Edelmann India.

Ground no. 4 & 5: Addition u/s 69A of the Act (Rs. 476,20,574/-)

4.

Brief facts are that the assessee is a company registered in Germany and in the holding company of Edelmann Packing India Pvt. Ltd. It is engaged primarily in providing printing and packaging solutions. The assessee was issued a notice u/s 148 of the Act on account of information available with the department regarding fixed deposits made by the assessee and, interest income and remittance received by it as per Form 15CA filed by Edelmann India. No return was filed by the assessee and subsequent notices also remained uncompiled with. Hence,

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IT (IT)A No. 29/DEL/2026 Edelmann GMBH the AO proceeded exparte and proposed to make an addition of Rs. 6,38,97,753/- as per the draft assessment order.

4.1 The assessee filed objections before the DRP. Before DRP, the assessee filed details and nature of receipts. During the year, the assessee received a remittance of Rs. 4,76,20,574/- from Edelmann India, details of which has been submitted before the DRP as under:

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IT (IT)A No. 29/DEL/2026 Edelmann GMBH

4.3 The assessee explained before the DRP as under:

“7.2…….It is submitted that Edelmann India generated 2 Form 15CAs for a single transaction of interest payment to the assessee (as mentioned at S. No.1 to S. No. 4 above). While filing the Form 15CA for these transactions initially, Edelmann India inadvertently reported amount under the head 'Actual amount of remittance after TDS (in foreign currency)' in INR instead of EUR. Hence, Edelmann India filed another Form 15CA for these 2 transactions rectifying the afore-mentioned error. The detail of the same is enclosed as Item no. 12 of the Paperbook Further, with reference to the interest payment for ECB loan as tabulated at S. No. 1 and S. No. 2, it is submitted that the said interest was subject to TDS under section 194LC of the Act and accordingly, Edelmann India had deducted and deposited the applicable TDS on the same. The details of the same along with a copy of Form 26AS of the relevant assessment year evidencing the same is enclosed as Item no. 12 of the Paperbook. Moreover, in relation to the transaction at S. No. 5 above, it is submitted that the same pertains to repayment of principal amount of ECB loan which was received from Edelmann India during the year under consideration. Further, it is submitted that the same is capital transaction and does not give rise to any income. A copy of Form 15CA evidencing the said nature is enclosed as Item no. 13 of the Paperbook. Further, we wish to draw your Honor's attention to the fact that while issuing the notice under section 148A(b) of the Act, the Ld. AO has himself identified the above Form 15CAs which were available with him on record wherein the nature of the said interest income is duly captured. Further, we wish to highlight the fact that the Ld. AO issued a notice under section 133(6) of the Act on 04 September 2024 to the subsidiary of the assessee - Edelmann Packaging India Private Limited wherein the Ld. AO had asked to furnish details regarding the transactions undertaken by Edelmann India with the assessee company. In response to the said notice, Edelmann India duly furnished the information before the Ld. AO. However, the Ld. AO did not consider the said submission filed by Edelmann India and continued passing the order under section 144C(1) of the Act without application of his own mind. Thereafter, he made an addition on account of the above amounts amounting to INR 4,76,20,574 as unexplained money under section 69A of the Act. In view of the above, as evident from the above-mentioned detail, it is submitted that none of the transactions mentioned above as identified by the Ld. AO, indicates that the assessee has earned an income of INR 4,76,20,574 during the year which has escaped assessment. Hence, the addition proposed by the Ld. AO is not applicable on the assessee and deserves to be deleted.” 5 | P a g e

IT (IT)A No. 29/DEL/2026 Edelmann GMBH

4.4 The DRP sought remand report from the AO and objections thereon from the assessee. After considering these, following directions was issued by the DRP.

“7.5 The Panel is of the opinion that during the course DRP proceedings the course DRP proceedings the assessee has filed detailed break up of remittances received from Edelmann India amounting to Rs. 4,76,20,574/-. The assessee has also filed supporting documentary evidences regarding the same. The AO is directed to verify the claim of the assessee and check veracity of the claim that Form 15CA was filed incorrectly in EUR instead of INR. He is also directed to verify Form 26AS and give necessary credit to the assessee. The AO is directed to pass a speaking order in this regard. In case the claim of the assessee is found to be correct then addition of Rs. 4,76,20,574/- is directed to be deleted. Ground 5 of the assessee is allowed as per verification.”

4.5 However, the AO, in the final assessment order, stated that the assessee’s contention of inadvertent filing of Form 15CA has not been found sustainable and therefore, made an addition of Rs. 4,76,20,574/- u/s 69A in the final assessment order.

4.6 Aggrieved, the assessee is in appeal before the Tribunal.

5.

Before us, Ld. Counsel has reiterated his arguments regarding duplicate filing of Form 15CA due to error in reposting the amount in Rs. instead of Euros. He has furnished the following documents in support of his contentions:

(i) Copies of Form 15CA evidencing the remittances reported in Euro & Rupees for the same amount (ii) Copy of Loan Agreement between the assessee & Edelmann India alongwith Form 15CA evidencing repayment of loan. (iii) Copy of letter from the Bank regarding credits in assessee’s bank account.

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IT (IT)A No. 29/DEL/2026 Edelmann GMBH 5.1 Ld. Counsel has pointed out that the AO did not implement the directions of DRP and therefore his order is bad in law and deserves to be set aside.

6.

We have heard the rival submissions and perused the material available on record. We note that based on the submissions made by the assessee and remand report of the AO, the DRP had issued categorical directions to the AO to verify the fact that 2 Form 15CAs were generated in respect of each of the two transactions as the Indian company had inadvertently mentioned the amount in INR instead of EURO and therefore, reused corrected Form 15CA were filed for the same transactions. On perusal of the Forms 15CA and the bank certificate filed before us, we note as under:

(i) Two amounts of Rs. 2,81,431/- and Rs. 37,33,855/- were received on account of interest on ECB loan which were paid after deduction of TDS u/s 194LC by Edelmann India to the assessee. Due to error in mentioning the amount of TDS in Rupees instead of EURO, the deductor filed Forms 15CA again for the same transactions. As also clarified by the Bank, these are not separate remittances as there is no corresponding credit in their bank account. Further, Rs. 3,95,90,000/- was a repayment of loan by Edelmann India to the assessee on which no TDS was made as per Form 15CA. This being a capital transaction, it we cannot be treated as income. In view of above facts, the addition made by the AO of Rs. 4,76,20,574/- stands reduced by (Rs. 2,81,431/- + 37,33,855/- + 3,95,90,000/-). Further, remaining amount of interest income was duly subjected to TDS u/s 194LC which was withheld by the deductor and, therefore, the assessee was 7 | P a g e

IT (IT)A No. 29/DEL/2026 Edelmann GMBH specifically exempted from filing return in India u/s 115A(5) of the Act. In view of the above, the entire addition of Rs. 4,76,20,574/- is hereby deleted.

7.

In the result, appeal of the assessee is allowed.

Order is pronounced in the open court on 11.05.2026

Sd/- Sd/- (VIKAS AWASTHY) (RENU JAUHRI) JUDICIAL MEMBER ACCOUNTANT MEMBER

Delhi, Dated: 25.06.2026 Pooja Mittal, Sr. PS, Pooja, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi

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