CIT Vs Bharti Airtel Limited (Delhi High Court)
The Delhi High Court dismissed the Revenue’s appeal for Assessment Year 2005-06 in view of the Supreme Court’s decision in Commissioner of Income Tax versus Alagendran Finance Limited, (2007) 293 ITR 1 (SC). The assessee’s return was originally assessed under Section 143(3) on 31 December 2007 after setting off brought forward losses and unabsorbed depreciation. An order under Section 154 read with Section 143(3) dated 7 March 2008 subsequently assessed income under the normal provisions as nil and determined book profits under Section 115JB. Thereafter, reassessment proceedings under Section 147 culminated in an order dated 10 December 2009 making additions relating to non-deduction of tax at source on interest paid to ABN Amro Bank, Stockholm Branch and ESOP expenses, while also discussing the set-off of brought forward losses and unabsorbed depreciation.
Subsequently, the Commissioner passed an order under Section 263 on 24 March 2011 on the alleged failure to deduct tax under Sections 194H and 194J, invoking Section 40(a)(ia). The issue before the High Court was whether the limitation under Section 263(2) should be computed from the original assessment order dated 31 December 2007 or the reassessment order dated 10 December 2009.
