Jet Airways (India) Limited Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that assessee going through resolution process has failed to comply with various notices issued by lower authorities. Accordingly, it is directed to give one last opportunity to present their case before AO. Assessee is also directed to pay the cost for being delinquent before lower authorities.
Facts- Pursuant to the survey action u/s. 133A of the Act conducted in the case of the assessee dated 19.09.2018, the assessee’s case was selected for scrutiny, as it was observed that the assessee has entered into a large value international transaction as per Form No. 3CED with its Associated Enterprises (AEs) and also as per the survey report.
The assessee was issued notice u/s. 142(1) of the Act calling for details, documents, evidences, explanation, along with the copy of order u/s. 92CA(3) of the Act seeking for assessee’s explanation as to the transfer pricing adjustment proposed by the TPO. It is observed that inspite of several notices, the assessee has failed to furnish details before the A.O. except for a letter dated 18.02.2021 received from Shri Ashish Chhawchharia, Resolution Professional for Jet Airways (India) Ltd. stating that the assessee company was undergoing Corporate Insolvency Resolution Process (CRIP for short) as per Insolvency and Bankruptcy Code, 2016 as directed by the Hon’ble National Company Law Tribunal (NCLT for short) vide order dated 20.06.2019, seeking for the assessment proceedings to be kept as abeyance.
However, AO passed a draft assessment order u/s. 143(3) r.w.s. 144C(1) by making various additons. TPO/A.O. proceeded to bench mark the international transactions and specific domestic transaction of the assessee, thereby making an adjustment Notably, AO has made the impugned addition of Rs.4246,81,14,783/- under the normal provisions, which was more than that of the income computed u/s. 115JB of the Act, wherein the income under the normal provision was considered for computing the tax liability of the assessee company. Being aggrieved, the present appeal is filed.
Conclusion- Considering the nature of the addition, we are of the considered view that the assessee may be given one last opportunity to present its case before the A.O. It is also evident that the considerable amount of time and revenue has been spent by Exchequer in carrying out the assessment proceedings followed the appellate proceedings. The assessee is directed to pay a cost of Rs.25,000/- each in both these appeals for being delinquent before the lower authorities and the same is to be paid towards Prime Minister’s Relief Fund within 30 days from the date of this order. The assessee is also directed to appeal and fully co-operate with the A.O. to present its case without any further delay.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
These appeals are filed by the assessee, challenging the assessment order passed by the Assessing Officer dated 27.07.2022 passed u/s. 144 r.w.s. 147, 92CA and 144C(13) of the Income Tax Act, 1961 (‘the Act’), pursuant to the direction of the ld. Dispute Resolution Panel (‘DRP’ for short), relevant to the Assessment Year (‘A.Y.’ for short).
2. As the facts are identical in both these appeals, we hereby pass a consolidated order by taking ITA No. 2380/Mum/2022 as the lead case.
3. The brief facts are that the assessee is a public limited company engaged in the business of scheduled airline carrying out transportation of passengers and cargo and other allied services and was incorporated under the Companies Act, 1956 on 01.04.1992 consisting of nine directors. The assessee filed its return of income dated 29.11.2016, declaring total income at Rs.Nil under the normal provisions and book loss of Rs.Nil u/s. 115JB of the Act.
4. Subsequently, the assessee revised its return dated 28.03.2018, declaring total income at Rs.Nil under the normal provisions and book loss of Rs.Nil u/s. 115JB of the Act. Pursuant to the survey action u/s. 133A of the Act conducted in the case of the assessee dated 19.09.2018, the assessee’s case was selected for scrutiny, as it was observed that the assessee has entered into a large value international transaction as per Form No. 3CED with its Associated Enterprises (AEs) and also as per the survey report. The assessee was issued notice u/s. 142(1) of the Act calling for details, documents, evidences, explanation, along with the copy of order u/s. 92CA(3) of the Act seeking for assessee’s explanation as to the transfer pricing adjustment proposed by the TPO. It is observed that inspite of several notices, the assessee has failed to furnish details before the A.O. except for a letter dated 18.02.2021 received from Shri Ashish Chhawchharia, Resolution Professional for Jet Airways (India) Ltd. stating that the assessee company was undergoing Corporate Insolvency Resolution Process (CRIP for short) as per Insolvency and Bankruptcy Code, 2016 as directed by the Hon’ble National Company Law Tribunal (NCLT for short) vide order dated 20.06.2019, seeking for the assessment proceedings to be kept as abeyance. Subsequent to this, the assessee was again furnished with the notice u/s. 142(1) seeking for details, documents and explanation. It is observed that the reply from Shri Ashish Chhawchharia dated 06.03.2021, reiterating the earlier submission that the assessee company was undergoing proceedings in the NCLT was furnished. The TPO/A.O. proceeded to bench mark the international transactions and specific domestic transaction of the assessee, thereby making an adjustment which are as follows: (Draft Assessment order pg.13 of 33)
