UL INDIA PRIVATE LIMITED,BENGALURU vs. DCIT, CIRCLE-7(1)(1), BENGALURU

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ITTPA 2511/BANG/2024Status: DisposedITAT Bangalore03 November 2025AY 2021-2212 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal allowed the assessee to withdraw grounds 1 to 28 related to transfer pricing issues, noting the existence of a unilateral APA with the CBDT and the Revenue's no objection. These grounds were dismissed as withdrawn. Regarding grounds 29 to 32, concerning the addition of Rs.1,09,20,680/- on account of bad debts recovered, the Tribunal found that the assessee had already declared this amount in its return of income under the head 'Any other income' and in its audited financial statements. The Tribunal held that the AO erred in using an alleged section 143(1) intimation, which was not demonstrably issued or served, as the starting point for computing assessed income. The addition was deemed unjustified as it led to double taxation. Therefore, the AO was directed to delete this addition. Grounds 29 to 32 were allowed. Ground 33, relating to interest under sections 234A and 234B, was considered consequential and thus allowed. Ground 34, concerning short grant of TDS credit, was remitted to the AO for examination and verification of whether the corresponding income was declared, with directions to allow credit if verified. This ground was partly allowed. Grounds 35 and 36, related to penalty proceedings, were held to be premature and were dismissed. The appeal was partly allowed.

What were the facts?

The assessee, UL India Pvt. Ltd., filed an appeal before the ITAT Bangalore against an order passed by the Assessing Officer (AO) dated 24.10.2024 under section 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961, for Assessment Year 2021-22. Initially, the assessee had raised 36 grounds of appeal. During the proceedings, the assessee requested to withdraw grounds 1 to 28, which pertained to transfer pricing issues, due to the signing of a unilateral Advance Pricing Agreement (APA) with the CBDT on 21.03.2025. The Revenue had no objection to this withdrawal. The remaining grounds (29 to 36) dealt with corporate tax matters, including the consideration of income as per an alleged intimation under section 143(1) and the levy of interest and penalty.

What were the issues?

1. Whether the grounds of appeal related to transfer pricing issues (Grounds 1-28) can be withdrawn by the assessee in light of a unilateral APA entered into with the CBDT? (Question of procedure/law) 2. Whether the addition of Rs.1,09,20,680/- on account of bad debts recovered, based on an alleged intimation under section 143(1) which was not issued or served on the assessee, is justified, especially when the amount was already declared in the return of income? (Question of law and fact) 3. Whether interest under sections 234A and 234B is leviable, which is stated to be consequential? 4. Whether the short grant of TDS credit to the extent of Rs.1,00,98,197/- is to be allowed after due verification? 5. Whether penalty proceedings under sections 274 r.w.s. 270A and 271AAC are premature at this stage? Assessee's contentions: - Grounds 1-28 (transfer pricing) should be allowed to be withdrawn due to the unilateral APA. - The intimation under section 143(1) was never issued, and the return status is 'under processing'. - The bad debt recovered was suo-moto declared in the return of income, and re-adding it would amount to double taxation. - The assessee had submitted a reply to a notice under section 143(1)(a) stating the amount was offered to tax. - Even if an intimation was passed, it was without an opportunity of being heard and was not served. - Interest under sections 234A and 234B is consequential. - TDS credit should be allowed after verification. - Penalty proceedings are premature. Revenue's contentions: - The Revenue had no objection to the withdrawal of transfer pricing grounds. - The Revenue supported the order of the authorities below regarding corporate tax grounds.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13),Section 144B,Section 143(1),Section 143(1)(a),Section 234A,Section 234B,Section 274,Section 270A,Section 271AAC

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C’’ BENCH: BANGALORE

Before: SHRI PRASHANT MAHARISHI & SHRI KESHAV DUBEY

For Respondent: Dr. Divya K.J., D.R
Hearing: 05.08.2025Pronounced: 03.11.2025

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the order of the ld. Assessing Officer dated 24.10.2024 vide DIN: ITBA/AST/S/143(3)/2024-25/1069905681(1) passed u/s 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961 (in short “The Act”) for the assessment year 2021-22.

2.

The assessee has raised the following grounds of appeal:

IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 2 of 12

IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 3 of 12

IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 4 of 12

IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 5 of 12

3.

Before us, at the outset, the ld. AR of the assessee CA. Ketan Ved drew our attention to a request letter dated 15/05/2025 filed on 21/05/2025 & submitted that the assessee company had signed a

IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 6 of 12 unilateral APA with the Central Board of Direct Taxes (“CBDT”) on 21/03/2025 and accordingly prayed that the ground Nos. 1 to 28 related to Transfer pricing issues may kindly allowed to be withdrawn.

3.1 The ld. DR on the other hand has no objection whatsoever on the request of withdrawal as made by the assessee in pursuant to Unilateral APA.

3.2 We, as per the request letter dated 15/05/2025 of the Director Sri Prosenjit Roy and as requested by the ld. AR of the assessee, allow the assessee to withdraw the ground Nos. 1 to 28 as raised by the assessee related to Transfer pricing issues. Accordingly, these grounds of the assessee company are dismissed as withdrawn.

4.

Now the ground Nos. 29 to 32 are Corporate Tax grounds, more particularly related to single issue i.e. consideration of income as per the intimation under section 143(1) of the Act as the starting point of computing the assessed income vide assessment order dated 24/10/2024 despite the fact that such intimation was never issued to the assessee.

4.1 Before us, the ld. AR of the assessee vehemently submitted that the intimation u/s 143(1) of the Act for the assessment year 2021-22 was never issued to the assessee and the status of the return of the assessee as per the income tax portal is still showing “under processing”. The ld. AR also submitted that the assessee company suo-motto declared the bad debt recovered in its return of income amounting to Rs.1,09,20,680/- and the addition once again if made u/s 143(1) of the Act will amount to double taxation. Lastly, the ld. A.R of the assessee submitted that in response to notice u/s 143(1)(a) of the Act, the assessee had categorically submitted that the

IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 7 of 12 said amount was already offered to tax in the return of income and accordingly the proposed addition of the same once again will result into a double taxation.

5.

The ld. D.R. on the other hand supported the order of the authorities below.

6.

We have heard the rival submissions and perused the materials available on record. The assessee company has filed its return of income for the assessment year 2021-22 on 15.3.2022 vide acknowledgement no.366168590150322 by declaring total income of Rs. Nil and accordingly claimed refund of Rs.7,56,31,640/-. The said return was taken for processing by the CPC and the notice u/s 143(1)(a) of the Act was also issued. In response to said notice, the assessee submitted its reply by stating that the bad debts recovered amounting to Rs.1,09,20,680/- had already been offered to tax in the return of income voluntarily by the assessee and addition of the same once again u/s 143(1) of the Act will amount to double taxation. Thereafter, the assessee claimed that no intimation u/s 143(1) of the Act was passed by the CPC and the status of the return of income of the assessee as per the income tax portal is still showing “under processing”, which is extracted below for ease of reference and convenience:

IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 8 of 12

6.1 Further, while concluding the assessment proceedings of the assessee vide assessment order dated 24.10.2024, the AO considered the income as per the intimation u/s 143(1) of the Act as the starting point of computing the assessed income. The ld. A.R. of the assessee also argued that that even if the intimation u/s 143(1) of the Act was passed by the CPC, that was without providing any further

IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 9 of 12 opportunity of being heard to the assessee and the intimation also never served on the assessee.

6.2 On going through the return of income submitted by the assessee before us, we take note of the fact that the assessee in Part A - P & L of the return had declared bad debts recovered amounting to Rs.1,09,20,680/- under the head “Any other income” which is reproduced below for ease of reference and convenience:

IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 10 of 12

6.3 Further, on going through the schedule of the audited financial statement, we also take a note of the fact that in schedule 18, which relates to other income, the assessee had declared bad debts recovered amounting to Rs.1,09,20,680/-, which is also reproduced below for ease of reference and convenience:

IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 11 of 12

6.4 Taking into consideration of the above facts, we are of the considered opinion that the assessee had already declared the bad debts recovered amounting to Rs.1,09,20,680/- in its return of income filed for the assessment year 2021-22. Therefore, we find no merit in adding the same once again while passing intimation u/s 143(1) of the Act. The AO had grossly erred in considering the income as per the intimation u/s 143(1) of the Act as starting point of computing the income and should have examined whether the assessee had declared the bad debt recovered in its return of income while concluding the assessment proceedings. Under these circumstances, the addition of Rs.1,09,20,680/- as made under the alleged intimation u/s 143(1) of the Act which has been taken as the starting point while calculating the assessed income while completing the assessment proceedings is unjustified and therefore, we direct the AO to delete the same. Thus, the ground nos. 29 to 32 as raised by the assessee are hereby allowed.

7.

Ground No.33 is related to the levy of interest u/s 234A & 234B of the Act, which in our opinion is consequential in nature.

8.

Ground No.34 which is related to short grant of TDS credit to the extent of Rs.1,00,98,197/- including the tax credit of UL Quality Assurance Pvt. Ltd. (its subsidiary merged with the company w.e.f. 1.4.2018). This issue relating to short granting of TDS are remitted to the file of AO to examine the same and if the assessee has declared the corresponding income, then the AO should allow the credit of the TDS also after due verification. Accordingly, this ground of appeal is partly allowed.

IT(TP)A No.2511/Bang/2024 UL India Pvt. Ltd., Bangalore Page 12 of 12

9.

Now ground No.35 and 36 are related to penalty proceedings u/s 274 r.w.s. 270A & 271AAC of the Act, which in our opinion is premature at this stage and accordingly dismissed.

10.

In the result, appeal filed by the assessee is partly allowed.

Order pronounced in the open court on 3rd Nov, 2025

Sd/- Sd/- (Prashant Maharishi) (Keshav Dubey) Vice President Judicial Member

Bangalore, Dated 3rd Nov, 2025. VG/SPS

Copy to:

1.

The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order

Asst. Registrar, ITAT, Bangalore.

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