AIRBUS INDIA PRIVATE LIMITED vs. PRINCIPAL COMMISSIONER OF INCOME TAX -1

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WP/24690/2025HC KarnatakaKAHC01053554202528 October 2025Bench: S.R.KRISHNA KUMAR6 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the petition. It held that the impugned certificate in Form-2 dated July 28, 2025, issued by the respondents, was illegal and impermissible. The Court noted that the certificate was issued based on an Order Giving Effect (OGE) dated March 26, 2025, which was itself problematic. Furthermore, the petitioner's rectification applications, seeking credit for appropriated tax already paid, were still pending. Therefore, the Court quashed the impugned certificate. It directed the respondents to consider the petitioner's rectification application dated January 21, 2025, after granting credit for the appropriated tax already paid, in accordance with the law and without reference to the OGE dated March 26, 2025. This was to be done expeditiously, within three months from the receipt of the order. The ratio decidendi is that a certificate issued under a scheme should not be based on a flawed subsequent order, especially when rectification applications for pending issues remain undecided.

What were the facts?

The petitioner, Airbus India Private Limited, is challenging a certificate in Form-2 dated July 28, 2025, issued by the Principal Commissioner of Income Tax and Assistant Commissioner of Income Tax for Assessment Year 2015-16. This certificate was issued under Section 92 of the Finance Act (No. 2), 2024, in relation to the Direct Tax Vivad Se Vishwas Scheme. The petitioner had filed a declaration under this scheme following an ITAT order dated August 5, 2022, which had remitted certain issues back to the Assessing Officer. The petitioner claims the Form-2 failed to grant credit for Tax Deducted at Source (TDS) and advance tax. Subsequently, an Order Giving Effect (OGE) dated March 26, 2025, was passed, which the petitioner argues was incorrectly used to issue the revised Form-2, reducing certain disallowances to Nil. The petitioner's rectification applications are pending.

What were the issues?

1. Whether the impugned certificate in Form-2 dated 28.07.2025, issued under Section 92 of the Finance Act (No. 2), 2024, for Assessment Year 2015-16, is liable to be quashed. (Question of law and fact) 2. Whether the respondents ought to issue a fresh certificate in Form-2, taking into account the tax payable on transfer pricing adjustment and disallowance under Section 40(a)(i) of the Income-tax Act, 1961, and compute the consequential refund after considering all tax credits. (Question of law and fact) Assessee's Contentions: The petitioner argues that the impugned Form-2 is illegal and impermissible as it was issued based on an OGE dated March 26, 2025, which itself is flawed. They contend that their rectification applications, seeking credit for already paid taxes (TDS and advance tax), are still pending. The petitioner seeks to quash the Form-2 and direct the issuance of a fresh certificate reflecting the correct tax payable and refund after considering all tax credits. Revenue's Contentions: The judgment does not record specific contentions from the revenue.

Which sections of the Income-tax Act were involved?

Section 92,Section 40(a)(i),Section 143(3),Section 254

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2025:KHC:43167 WP No. 24690 of 2025

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF OCTOBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 24690 OF 2025 (T-IT) BETWEEN:

AIRBUS INDIA PRIVATE LIMITED HAVING OFFICE AT 4TH FLOOR, XYLEM PLOT NO.4 AND 4A, DYAVASANDRA INDUSTRIAL AREA, MAHADEVAPURA POST, WHITEFIELD ROAD, BANGALORE – 560 048 REPRESENTED BY ITS HEAD OF TAXATION, SOMYAJIT MALLICK. …PETITIONER (BY SRI. T. SURYANARAYANA, SENIOR COUNSEL FOR SMT. MANASA ANANTHAN, ADVOCATE)

AND:

1.

PRINCIPAL COMMISSIONER OF INCOME TAX -1

BMTC BUILDING, 80 FEET ROAD,

KORAMANGALA, BENGALURU-560 095.

2.

ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1(1)(1)

ROOM NO.215, 2ND FLOOR, BMTC BUILDING,

80 FEET ROAD, KORAMANGALA,

BENGALURU – 560 095. …RESPONDENTS

(BY SRI. M. DILIP, ADVOCATE)

THIS W.P IS FILED UNDER ARTICLE 226 OF THE CONSTITUITON OF INDIA PRAYING TO QUASHING THE CERTIFICATE IN FORM-2 DATED 28.07.2025 ISSUED BY THE RESPONDENTS UNDER SECTION 92 OF THE FINANCE ACT (NO. 2), 2024 BEARING DIN 480741901280725 (ANNEXURE - J) FOR THE ASSESSMENT YEAR 2015-16 AND ETC.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

Digitally signed by CHANDANA B M Location: High Court of Karnataka

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HC-KAR NC: 2025:KHC:43167 WP No. 24690 of 2025

CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER

In this petition, petitioner seeks for the following reliefs:-

“ a) Quashing the certificate in Form-2 dated 28.07.2025 issued by the Respondents under Section 92 of the Finance Act (No. 2), 2024 bearing DIN 480741901280725 (Annexure 'J') for the assessment year 2015-16;

b) Directing the Respondents to issue a fresh certificate in Form-2 under Section 92 of the Finance Act (No. 2), 2024 for the assessment year 2015-16, by taking into account the tax payable at Rs. 6,51,40,540/-, i.e., one- half of the tax payable on the transfer pricing adjustment of Rs. 13,18,94,281/- and the disallowance under Section 40(a)(i) of the Income-tax Act, 1961 of Rs. 25,13,98,099/- determined in the final assessment order dated 29.10.2019 (Annexure 'B') and compute the consequential refund after taking into account all tax credits available to the Petitioner;

c) Quashing the order dated 26.03.2025 passed by the under Section 143(3) read with Section 254 of Income- tax Act, 1961 bearing DIN ITBA/AST/M/143(3)/2 25/1075278732(1) (Annexure - 'H') for the assessment 2015- 16 to the extent questioned in the present petition;. In the alternative;

d) If the relief sought vide prayer (a), (b) and (c) are not granted, permit the Petitioner to file an appeal / petition before the appropriate authority, against the order dated 26.03.2025 passed by the 2nd Respondent for the

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HC-KAR NC: 2025:KHC:43167 WP No. 24690 of 2025

assessment year 2015-16, under Section 143(3) read with Section 254 of the IT Act bearing DIN ITBA/AST/M/143(3)/2024-25/1075278732(1); and

e) pass such other or further orders as this Hon'ble Court may deem fit in the facts and circumstances of the case, in the interests of justice and equity.”

2.

Heard learned Senior counsel for the petitioner and learned counsel for the respondents – revenue and perused the material on record.

3.

A perusal of the material on record will indicate that in relation to the assessment year 2015-16, final assessment order dated 29.10.2019 was passed by the respondents. Aggrieved by the same, petitioner filed an appeal which was disposed of by the ITAT vide final order dated 05.08.2022 answering certain issues in favour of the petitioner and remitted the matter back to the Assessing Officer in relation to the remaining issues. Aggrieved by the order of the ITAT insofar as answering issues in favour of the petitioner, respondents have preferred an appeal before this Court in ITA No.130/2023, which is pending adjudication.

4.

In the meanwhile, during the pendency of the said appeal, a scheme known as ‘Direct Tax Vivad Se Vishwas Scheme, 2024’

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HC-KAR NC: 2025:KHC:43167 WP No. 24690 of 2025

(for short ‘ the DTVSV scheme’) was promulgated in July, 2024, pursuant to which, the petitioner filed Declaration in Form-1 on 20.12.2024. In pursuance of the same, the 1st respondent issued an order in Form-2 dated 04.01.2025 determining refund payable to the petitioner but failed to grant credit of tax deducted at source and advance tax which credit the petitioner, he was entitled to claim from the respondents. Under these circumstances, the petitioner filed an application dated 21.01.2025 before both the respondents seeking rectification of the mistakes in Form-2 i.e., by seeking re-computation of the refund upon grant of credit on the appropriated tax already remitted by the petitioner.

5.

It is a matter of record and undisputed fact that the rectification application are pending before the respondents even as on today. In the meanwhile, on 26.03.2025, the 2nd respondent passed an Order Giving Effect (OGE) to the aforesaid order dated 05.08.2022 passed by the ITAT interalia deleting the TP adjustment and making disallowances of the reimbursement of salary costs of seconded employees under Section 40(i)(a) of the I.T.Act. The said OGE was made the basis by the 1st respondent to issue the impugned revised Form-2 dated 28.07.2025 by treating

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HC-KAR NC: 2025:KHC:43167 WP No. 24690 of 2025

the quantum involved in the appeal before this Court only pursuant to TP adjustment and the quantum in respect of disallowance under Section 40(a)(i) of the I.T.Act is being reduced to ‘Nil’. Aggrieved by the impugned revised Form-2 and seeking other reliefs, petitioner is before this Court by way of the present petition.

6.

A perusal of the material on record including the aforesaid Form-2 will indicate that the 1st respondent clearly fell in error in issuing the impugned Form-2 on the basis of the OGE dated 28.07.2025, based on Annexure-H the OGE dated 26.03.2025 , which is clearly illegal and impermissible in law and so also, since the rectification applications filed by the petitioner are still pending consideration, I deem it just and appropriate to set aside the impugned Endorsement and dispose of this petition by issuing certain directions for disposal of the rectification application filed by the petitioner.

7.

In the result, I pass the following:- ORDER

(i) Petition is hereby allowed.

(ii) The impugned certificate at Annexure-J in Form-2 dated 28.07.2025 issued by the respondents is hereby quashed.

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HC-KAR NC: 2025:KHC:43167 WP No. 24690 of 2025

(iii) The respondents are directed to consider the rectification application at Annexure-G dated 21.01.2025 filed by the petitioner after granting credit of appropriated tax already paid by the petitioner in accordance with law and without reference to the order giving effect to at Annexure-H dated 26.03.2025 as expeditiously as possible within an outer limit of three months from the date of receipt of a copy of this order.

Sd/- (S.R.KRISHNA KUMAR) JUDGE

Srl.

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