Bharti Airtel Ltd, Haryana V. ACIT, New Delhi

ITA 3907/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0367 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-01-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 20-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retrospective amendment; Scheme of amalgamation; Revised return; Set aside
• Section: 139(5)

Judgement Text

I.T.A. NO.3907 /DEL/10 1/7 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A NEW DELHI) BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.3907 /DEL/2010 ASSESSMENT YEAR : 2006-07 BHARTI AIRTEL LTD., ADDL. CIT, PLOT NO.16, UDYOG VIHAR, RANGE-2, PHASE-IV, GURGAON. V. NEW DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AAACB AAACB AAACB AAACB- -- -2894 2894 2894 2894- -- -R RR R APPELLANT BY : SHRI ANIL BHALLA, C.A. RESPONDENT BY : SHRI ASHOK PANDEY, CIT-DR. ORDER PER A.K. GARODIA, AM: THIS IS AN ASSESSEES APPEAL AGAINST THE ORDER OF ASSESSING OFFICER DATED 4.8.2010 PASSED BY HIM U/S 143(3)/144C O F THE INCOME TAX ACT, 1961 AS PER DIRECTION OF DRP ORDER FOR ASSESSME NT YEAR 2006- 07. 2. GROUND NO.1 OF THE ASSESSEES APPEAL IS AS UNDER:- 1. THE LD ASSESSING OFFICER HAS ERRED BOTH ON FACTS AND I N LAW IN NOT PROCESSING REVISED RETURN FILED BY THE ASSESSEE COMPAN Y ON 31.3.2008 FOR WHICH ACKNOWLEDGEMENT WAS RECEIVED ON 1.4.2008 DUE TO GLITCHES IN THE INCOME TAX NETWORK ON THE NIG HT OF 31.3.2008. . I.T.A. NO.3907/DEL/10 2/7 1.1. THE LD ASSESSING OFFICER HAS ERRED BOTH ON FACTS AND IN L AW IN NOT CONSIDERING THE ORDER OF HON'BLE DELHI HIGH COURT AP PROVING THE MERGER ON 17.4.2007 WITH RETROSPECTIVE EFFECT FROM I ST OCTOBER, 2005. 1.2. THE LD ASSESSING OFFICER HAS ERRED BOTH ON FACTS AND IN L AW IN NOT INCLUDING IN ITS DRAFT ASSESSMENT ORDER THE TRANSACTIONS R ELATING TO THE ERSTWHILE COMPANIES SATCOM BROADBAND EQUIPMENT S LTD,. AND BHARTI AIRTEL LTD. WHICH PURSUANT TO THE ORDER OF THE HON'BLE DELHI HIGH COURT APPROVING THE SCHEME OF AMALGAMATIO N HAD LOST ITS IDENTITY AND ITS OPERATING RESULTS HAD BECOME PAR T OF THE OPERATING RESULTS OF THE ASSESSEE COMPANY FOR THE PREVIOU S YEAR RELEVANT TO ASSESSMENT YEAR 2006-07. 1.3. THE LD ASSESSING OFFICER HAS ERRED BOTH ON FACTS AND IN L AW IN DISREGARDING THE BINDING DECISION OF THE DELHI HIGH C OURT WHICH APPROVED THE SCHEME OF AMALGAMATION AND NOT CONSIDERI NG THE DECLARED LOSS OF `.6,64,54,849/- AND BROUGHT FORWARD LOSS OF `.19,01,56,902/- AGGREGATING TO `.25,66,11,751/- IN THE ASSESSMENT ORDER. 1.4. WITHOUT PREJUDICE THE ASSESSEE COMPANY HAS AGGRIEVED BY THE ASSESSING OFFICER IN NOT ALLOWING THE CONSEQUENT IMPACT OF THE JUDGMENT OF DELHI HIGH COURT APPROVING THIS SCHEME O F AMALGAMATION AND NOT CONSIDERING THE DECLARED LOSS OF `.6,64,54,849/- AND BROUGHT FORWARD LOSS OF `.19,01,5 6,902/- AGGREGATING TO `.25,66,11,751/- IN THE ASSESSMENT ORDER ON THE GROUND THAT SUCH CLAIM COULD NOT HAVE BEEN MADE IN T HE REVISED RETURN BEFORE THE ASSESSING OFFICER. THEREFORE, THE ASSESSE E COMPANY PLEADS THAT THE CLAIM FOR THE ABOVE BE CONSID ERED BY THE HON'BLE TRIBUNAL. . I.T.A. NO.3907/DEL/10 3/7 3. IT WAS SUBMITTED BY THE LD AR OF THE ASSESSEE THAT THE RETURN OF INCOME WAS FILED BY THE ASSESSEE COMPANY ON 30.11.2006 D ECLARING AN INCOME OF `.463.09LAKHS. IT IS ALSO SUBMITTED THAT PURSU ANT TO THE ORDER OF HON'BLE DELHI HIGH COURT IN THE MATTER OF SCHEME OF AMALGAMATION OF GROUP COMPANIES M/S SATCOM BROADBAND EQUIPMENTS LTD . AND BHARTI AIRTEL LTD., THESE TWO COMPANIES GOT MERGED INTO THE ASSESSEE COMPANY I.E. BHARTI AIRTEL LTD. IT IS ALSO SUBMITTED THAT THIS ORDER U/S 394 OF THE COMPANIES ACT WAS PASSED BY HON'BLE DELHI HI GH COURT ON 17.4.2007 AND AS PER THIS ORDER OF HON'BLE DELHI HIGH COURT, THE AMALGAMATION WAS EFFECTIVE W.E.F. 1.10.2005. IT IS SU BMITTED THAT HENCE, IT WAS NECESSARY FOR THE ASSESSEE COMPANY TO FILE A REVISED RETURN PURSUANT TO THE MERGER AND SUCH REVISED RETURN WAS TO BE FILED BY THE ASSESSEE COMPANY ON OR BEFORE 31.3.2008. IT IS A LSO SUBMITTED THAT THE ASSESSEE COMPANY FILED REVISED RETURN ON 31.3.2 008, BUT DUE TO GLITCHES IN THE INCOME TAX NETWORK OF THE INCOME TAX DEPARTMENT, THE ACKNOWLEDGEMENT WAS RECEIVED ON 1.4.2008 AND HEN CE THE REVISED RETURN FILED BY THE ASSESSEE COMPANY WAS NOT CONSIDERED B Y THE AUTHORITIES BELOW AND IT WAS NOT ACTED UPON. IT IS SU BMITTED THAT EVEN IF IT IS HELD THAT THE REVISED RETURN WAS FILED BY THE ASSESSEE COMPANY ON 1.4.2008 THEN ALSO, AS PER THE JUDGMENT OF HON'BLE MADRAS HIGH COURT RENDERED IN THE CASE OF PENTAMEDIA GRAPHIC LTD . V. ITO AS REPORTED IN 236 CTR 204 (MAD.).IT HAS TO BE ACTED U PON BECAUSE IT WAS HELD BY THE HON'BLE MADRAS HIGH COURT THAT THE AUTHO RITIES ARE BOUND TO TAKE NOTE OF THE STATE OF AFFAIRS ON THE DATE OF A MALGAMATION AND THE RETURN FILED REFLECTING THE SAME CANNOT BE IGNOR ED ON THE STRENGTH OF SECTION 139(5) OF THE ACT. IT IS SUBMITTED THAT IN THAT CASE, THE HON'BLE MADRAS HIGH COURT DIRECTED THE REVENUE TO CO NSIDER THE RETURN FILED IN TERMS OF THE SCHEME SANCTIONED BY THE COURT E FFECTIVE FROM 1.1.2004 IN THAT CASE, IT IS SUBMITTED THAT IN THAT CA SE ALSO, THE RETURN RETURNS WERE FILED BY THE ASSESSEE COMPANY ON 12.1.2007 AND 27.12.2007 AFTER THE ASSESSMENT WAS COMPLETED ON 28.12.2 006. IT IS . I.T.A. NO.3907/DEL/10 4/7 SUBMITTED THAT IN THE PRESENT CASE ALSO, THE REVISED RET URN FILED BY THE ASSESSEE COMPANY AS PER THE AMALGAMATION ORDER OF HON'BL E DELHI HIGH COURT SHOULD BE CONSIDERED BY THE DEPARTMENT. A T THIS JUNCTURE, IT WAS POINTED OUT BY THE BENCH THAT IN SUCH A SITUATION, THE ENTIRE MATTER WILL GO BACK TO THE FILE OF THE ASSESSING OFFICE R FOR A FRESH DECISION BECAUSE ONCE THE ASSESSING OFFICER IS DIRECTED TO CONSIDER THE REVISED RETURN FILED BY THE ASSESSEE ON 1.4.2008, THE PR ESENT ASSESSMENT DOES NOT SURVIVE AND THE ASSESSING OFFICER HAS TO F RAME THE DE NOVO ASSESSMENT AFTER CONSIDERING THE REVISED RETU RN FILED BY THE ASSESSEE COMPANY ON 1.4.2008 IN ACCORDANCE WITH THE AMALGAMATION OF THE TWO COMPANIES AS PER THE HIGH COU RT JUDGMENT DATED 17.4.2007. LD DR OF THE REVENUE HAD NOTHING T O SAY IN VIEW OF THIS JUDGMENT OF HON'BLE MADRAS HIGH COURT. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF LD AR OF THE AS SESSEE AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON REC ORD. WE FIND THAT IT IS NOTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER TH AT THE RETURN WAS REVISED BY THE ASSESSEE COMPANY ON 1.4.2008 DE CLARING AN INCOME OF `.437.43 LAKHS AS AGAINST THE INCOME DECLARE D BY THE ASSESSEE IN THE ORIGINAL RETURN FILED ON 30.11.2006 OF `.463.09 LAKHS. IT IS ALSO NOTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDE R THAT SUCH REVISED RETURN WAS FILED BY THE ASSESSEE COMPANY IN CONSEQUENCE TO THE AMALGAMATION OF TWO GROUP COMPANIES NAMELY SA TCOM BROADBAND EQUIPMENTS LTD. AND BHARTI AIRTEL LTD. IN CONSEQUENT TO THE AMALGAMATION APPROVED BY THE HON'BLE DELHI HIGH COU RT ON 17.4.2007 WITH RETROSPECTIVE EFFECT FROM 1..10.2005. THE ASSESSING OFFICER HAS IGNORED SUCH REVISED RETURN OF INCOME FILED BY THE A SSESSEE ON 1.4.2008 ON THE BASIS OF PROVISIONS OF SECTION 139(5) OF THE ACT BECAUSE AS PER HIM, THE LAST DATE TO REVISE THE RETURN EXPIRED ON 31.3.2008 AND THE RETURN WAS REVISED A DAY LATER. UN DER THESE FACTS, NOW WE CONSIDER THE JUDGMENT OF HON'BLE MADRAS HIGH C OURT RENDERED . I.T.A. NO.3907/DEL/10 5/7 IN THE CASE OF PENTAMEDIA GRAPHICS LTD. (SUPRA). IN TH AT CASE, THE ASSESSMENT YEARS INVOLVED WERE ASSESSMENT YEAR 2001-02 TO 20 04-05. THE ASSESSMENT WAS COMPLETED ON 28.12.2006 AND THE JUDGM ENT OF HON'BLE MADRAS HIGH COURT REGARDING AMALGAMATION WER E DATED 12.10.2004 AND 8.4.2004 AND THE HIGH COURT GRANTED THE SCHEME W.E.F. 1.4.2004 SUBJECT TO CERTAIN CONDITIONS AND THE REAFTER, THE HON'BLE HIGH COURT PASSED ORDER ON 29.11.2007 GIVING ITS APPROVAL TO THE MODIFIED SCHEME OF AMALGAMATION. THE REVISED RETU RN OF INCOME WAS FILED BY THE ASSESSEE ON 12.1.2007 AND 27.12.2007 A ND HENCE, ADMITTEDLY THE LAST DATE FOR FILING THE REVISED RETUR N OF INCOME AS PER THE PROVISIONS OF SECTION 139(5) OF THE ACT HAS EXPIRED LONG BACK. IN FACT, EVEN THE ASSESSMENT WAS COMPLETED IN THAT CASE BEFO RE FILING OF REVISED RETURN OF INCOME. EVEN UNDER THESE FACTS, IT W AS HELD BY THE HON'BLE MADRAS HIGH COURT THAT ONLY COURSE OPEN TO TH E REVENUE WOULD BE TO ACT AS PER THE SCHEME OF AMALGAMATION BY THE HI GH COURT EFFECTIVE FROM 1..1.2004 WHICH MEANS THAT THE TAX AU THORITIES ARE BOUND TO TAKE NOTE OF THE STATE OF AFFAIRS OF THE ASSESSE E AS ON 1.1.2004 AND THE RETURN FILED REFLECTING THE SAME CA NNOT BE IGNORED ON THE STRENGTH OF SECTION 139(5) OF THE INCOME TAX ACT, 1961. IT WAS ALSO HELD THAT MERITS OR OTHERWISE OF RETURNS FILED HOWEVER IS A MATTER OF ASSESSMENT FOR THE AUTHORITIES TO CONSIDER AND PASS ORDER I N ACCORDANCE WITH LAW. RESPECTFULLY FOLLOWING THIS JUD GMENT OF HON'BLE MADRAS HIGH COURT, WE HOLD THAT IN THE PRESENT CASE AL SO, THE REVENUE HAS TO TAKE ON RECORD AND CONSIDER THE REVISED RETURN FILED BY THE ASSESSEE ON 1.4.2008 IN CONSEQUENCE TO THE AMALGAMATION SCHEME SANCTIONED BY THE HON'BLE DELHI HIGH COURT AND THERE AFTER, THE ASSESSING OFFICER HAS TO FRAME A DE NOVO ASSESSMENT AS PER LAW. WE ORDER ACCORDINGLY. THE PRESENT ASSESSMENT IS SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO FRAME A DE NOVO ASSESSMENT AFTER CONSIDERING THE REVISED RETURN FILED BY THE ASSESSEE ON 1 .4.2008. WE WANT TO MAKE IT CLEAR THAT THE MERITS OR OTHERWISE O F SUCH REVISED . I.T.A. NO.3907/DEL/10 6/7 RETURN FILED BY THE ASSESSEE IS A MATTER OF ASSESSMENT FOR THE AUTHORITIES TO CONSIDER AND PASS ORDER IN ACCORDANCE W ITH LAW. GROUND NO.1 OF THE ASSESSEE IS ALLOWED. 5. VARIOUS OTHER GROUNDS RAISED BY THE ASSESSEE ARE REGARD ING MERITS OF THE VARIOUS ADDITIONS MADE BY THE ASSESSING OFF ICER IN THE PRESENT ASSESSMENT BUT SINCE THE PRESENT ASSESSMENT ITSELF HAS BEEN SET ASIDE BY US, THESE GROUNDS DO NOT SURVIVE FOR OUR ADJ UDICATION. IF THE ASSESSING OFFICER AGAIN MAKES SUCH DISALLOWANCES/ADDITI ONS IN THE DE NOVO ASSESSMENT THEN IT IS OPEN FOR THE ASSESSEE TO CHALL ENGE THE SAME BEFORE APPROPRIATE FORUM AS PER LAW BUT AT THE P RESENT, NO ADJUDICATION IS CALLED FOR ON ANY OF THESE ISSUES. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOW ED FOR STATISTICAL PURPOSES AS INDICATED ABOVE. 7. ORDER PRONOUNCED IN THE OPEN COURT ON THE 11 TH DAY OF FEBRUARY,2011. SD/- SD/- (R.P. TOLANI) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 11.2.2011. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. (ITAT, NEW DELHI). . I.T.A. NO.3907/DEL/10 7/7