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Facts
The assessee filed appeals against the CIT(A)'s order, which had dismissed the appeals by erroneously concluding that the assessee had opted for and settled the dispute under the Direct Tax Vivad Se Vishwas (VSVS) Scheme, 2020, and treated the appeals as withdrawn. The assessee argued that they did not finally pursue the VSVS remedy, despite Form No. 3 being issued, as the mandatory condition of payment under Section 5(2) of the VSVS Act was not complied with. Consequently, the original appeal before the CIT(A) should not have been treated as withdrawn.
Held
The Tribunal observed that while initial forms (1, 2, 3) under the VSVS Act were downloaded, final forms (4, 5) were not available, indicating that the VSVS process was not completed. The Tribunal agreed with the assessee that the CIT(A) had misapprehended the facts and erred in treating the appeals as withdrawn without a final settlement under the VSVS Act. Therefore, the Tribunal restored the matter to the CIT(A) for fresh adjudication (de novo) on merits.
Key Issues
Whether the CIT(A) was justified in dismissing the assessee's appeals as 'withdrawn' based on the assumption that the assessee had opted for and settled the dispute under the Direct Tax Vivad Se Vishwas Scheme, 2020, despite contentions of non-compliance with the scheme's mandatory conditions and non-adjudication on merits.
Sections Cited
Direct Tax Vivad Se Vishwas Act, 2020 Section 4(2), Direct Tax Vivad Se Vishwas Act, 2020 Section 4(6), Direct Tax Vivad Se Vishwas Act, 2020 Section 5(2), Income Tax Act Section 143(3), Income Tax Act Section 40A(3), Income Tax Act Section 40(a)(i), Income Tax Act Section 32, Income Tax Act Section 43B, Income Tax Act Section 234B, Income Tax Rules Rule 46A
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Income Tax Appellate Tribunal, DELHI BENCH ‘D’, NEW DELHI
Before: Shri Saktijit Dey & Dr. B. R. R. Kumar
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘D’, NEW DELHI Before Shri Saktijit Dey, Vice President & Dr. B. R. R. Kumar, Accountant Member
ITA Nos. 3396 & 3397/Del/2023: Asstt. Years: 2016-17 & 2017-18 M/s Interglobe Aviation Ltd., Vs The ACIT, Circle 12(2), New Delhi Upper Ground Floor, Gate No.2, Western Wing, Thapar House 124, Janpath, New Delhi 110001 (APPELLANT) (RESPONDENT) PAN No. AABCI 2726 B Assessee by : Sh. Tarandeep Singh, Adv. Revenue by : Sh. P. Praveen Siddharth, CIT-DR Date of Hearing: 18.01.2024 Date of Pronouncement: 19.01.2024
ORDER Per Dr. B. R. R. Kumar:- The present appeals have been filed by assessee against the order of Ld.NFAC/CIT(A), New Delhi dated 21.11.2023. Since, the issue involved in all these appeals are similar, they were heard together and being adjudicated by a common order. 2. The assessee has raised the following grounds of appeal in ITA No. 3396/Del/2023: 1. That on facts and in law the order dated 21st November 2023 passed by the National Faceless Appeal Center (hereinafter referred to as the "CIT(A)"} is bad in law and void ab initio.
2 ITA Nos 3396 & 3397/Del/2023 Interglobe Aviation Ltd.
1.1 Without prejudice and in specie that on facts and in law the CIT(A) has erred in not granting an opportunity of being heard as settled thereby violating the principals of natural justice. 1.2 Without prejudice and in specie the CIT(A) has erred in exercising discretionary jurisdiction in violation of the statute, fair play and justice. 2. That on facts and in law the CIT(A) has erred in dismissing the appeal by erroneously holding that the appellant has opted for Direct Tax Vivad Se Vishwas Scheme Act 2020. 2.1 That on facts and in the law. the CIT(A) has erred in holding that Appeal No.Delhi-4/10656/2019-20 is "treated as withdrawn by the appellant" in accordance with provisions of section 4(2) of The Direct Tax Vivad Se Vishwas Act, 2020. 2.2 That on facts and in law the CIT(A) has erred in not appreciating that: (a) There was no culmination of the proceedings initiated under the VSVS Act, and (b) As per provisions of section 4(6) of the The Direct Tax Vivad Se Vishwas Act, 2020 Appeal No. Delhi-4/10656/2019-20 was never withdrawn as the condition referred to in section 5(2) was never complied with. 3. That on facts and in law the CIT(A) has erred in not adjudicating upon the appeal on merits i.e Grounds of Appeals raised by the appellant in Form No. 35. 4. That on facts and in law the CIT(A) has erred in not appreciating that the assessment order dated 18th December 2019 passed by the AO u/s 143(3) of the Act is bad in law and void ab-initio inter alia as under: (i) It violates the settled principles of Natural Justice. (ii) It manifests lack of proper application of mind and correct exercise of statutory discretion by the AO. 5. That on facts and in law the CIT(A) has erred in upholding the disallowance of Rs. 1,42,70,543/- made by AO under section 40A(3) of the Act.
3 ITA Nos 3396 & 3397/Del/2023 Interglobe Aviation Ltd.
5.1 That on facts and in law the CIT(A) / AO have erred in not appreciating that cash payment: (a) was made on account of overriding legal mandate under exceptional circumstance of cancellation / delay of flight; (b) did not, in any case, exceeds the threshold limit of Rs.20,000 per passenger in a day. 6. That on facts and in law the CIT(A) has erred in upholding the action of AO in treating the sum of Rs 421,91,67,592 by way of "supplier credits" received from various suppliers of aircraft parts [mainly from P&W, Honeywell, Rockwell, etc.] as a revenue receipt liable to tax. 7. That on facts and in law the CIT(A) has erred in upholding the action of AO in disallowing deduction of a sum of Rs. 1040,17,83,958/- being supplementary lease rent (in short 'SLR') for alleged failure on the part of the appellant to deduct tax at source therefrom, invoking the provisions of section 40(a)i) of the Act. 7.1 That on facts and in law the CIT(A) / AO have erred in not appreciating that tax was not required to be deducted at source on supplementary lease rentals since the same were not taxable. 8. That on facts and in law the CIT(A) has erred in upholding the action of AO in disallowing deduction of expenditure on replacement of seats of the aircrafts amounting to Rs 4,78,37,702/- holding the same to be capital expenditure. 9. Without Prejudice, that on facts and in law the CIT(A) / AO have erred in not allowing depreciation u/s 32 of the Act on expenditure of Rs 4,78,37,702/- held to be capital expenditure. 10. That on facts and in law the CIT(A) has erred in not admitting additional ground of appeal raised vide letter dated 14th December 2022. 10.1 That on facts and in law the CIT(A) has erred in not allowing a deduction u/s 43B of Rs 12,96,39,387/- being Service Tax actually paid (under protest) during the year under consideration.
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That on facts and in law the CIT(A) has erred in not admitting and adjudicating upon application under Rule 46A filed on 12th May 2023. 12. That on facts and in law the CIT(A) has erred in not directing the AO to allow credit of TDS of Rs.55,07,86,262/- as claimed by the appellant in the return of Income. 13. That on facts and in law the CIT(A) / AO have erred in not following the decisions of Supreme Court, High Court and ITAT in the appellant's own case for earlier assessment years. 14. that on facts and in law the levy of interest under section 234B of the Act is bad in law.
Heard the arguments of both the parties and perused the material available on record. 4. The ld. CIT(A) held that, the assessee has opted for Direct Tax Vivad se Vishwas Scheme, 2020. The ld. CIT(A) categorically held that, as per ITBA and Systems, Forms 1, 2 and 3 have been downloaded but after perusing ITBA and Systems, Form 4 and Form 5 could not be downloaded. Even then the ld. CIT(A) erroneously chosen to dismiss the appeal of the assessee holding that the assessee opted for Vivad se Vishwas Scheme. 5. The ld. AR pointed out that the order of the CIT(A) is wholly unsustainable, in as much as the appeal of the assessee has been dismissed by treating the same “as withdrawn by the appellant”, whereas no such fact-situation persisted before the CIT(A). The Ld. AR, pointed that the CIT(A) was under a misapprehension that the assessee has settled the disputed tax arrears under the Direct Tax Vivad Se Vishwas Act, 2020 whereas in actuality the assessee did not finally pursue the
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remedy under the Direct Tax Vivad Se Vishwas Act, 2020, though the competent authority had issued Form No. 3. Since the taxes were not paid as per the determination made by the PCIT in Form No. 3, the mandatory condition of Section 5(2) of the Direct Tax Vivad Se Vishwas Act, 2020 remained un- complied and therefore, in such a situation, the CIT(A) grossly erred in treating the appeal pending before him as “withdrawn by the appellant”. 6. On the other hand, Ld. DR has not contested any of the factual assertions made by the Ld. AR, and contended that the CIT(A) has referred to Form Nos. 1, 2, & 3 issued under the Direct Tax Vivad Se Vishwas Act, 2020 which were appearing in ITBA system, and therefore, he has dismissed the appeal as withdrawn, though he conceded that Form Nos. 4 & 5 were not available on the ITBA system. Be that as it may, according to the Ld. DR the merits of the issue can be examined only at the level of the ld. CIT(A) and pleaded for restoring of the matter to ld. CIT(A) for adjudication for afresh. 7. Keeping in view, the facts narrated above and the arguments of both the parties, the matter is being restored to the file of the ld. CIT(A) for adjudication denovo.
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In the result, the appeals of the assessee are allowed for statistical purpose. Order Pronounced in the Open Court on 19/01/2024.
Sd/- Sd/- (Saktijit Dey) (Dr. B. R. R. Kumar) Vice President Accountant Member Dated: 19/01/2024 *NV, Sr. PS*