Appeal details
Counselvise Citation
[2023] 101 COUNSELVISE.COM (IT) 9491 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 year(s) 4 month(s) 21 day(s)
Appellant
Respondent
Appeal Type
Miscellaneous Application
Pronouncement Date
17-12-2023
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
C
Assessment Year
2012-2013
Appeal Filed On
26-07-2018
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “FRIDAY-C” BENCH: NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER M.A.Nos.-491 & 492/Del/2018 [In ITA Nos.3224/Del/2017 & 2977/Del/2017] [Assessment Year : 2012-13] M/s. Inter Globe Aviation Ltd. (INDIGO), 4 th Floor, Tower-D, Global Business Park, M.G.Road, Gurgaon-122002. PAN-AABCI2726B vs The Addl.CIT, Special Range-4, New Delhi. APPELLANT RESPONDENT Appellant by Shri Tarandeep Singh, Adv. Respondent by Shri Manu Chaurasia, Sr.DR Date of Hearing 08.12.2023 Date of Pronouncement 18.12.2023 ORDER PER KUL BHARAT, JM : These two Miscellaneous Applications (M.As) have been filed by the assessee seeking recalling of the order, both dated 04.04.2018 passed by the Tribunal in ITA No.3224/Del/2018 & 2977/Del/2017 pertaining to Assessment Year 2012-13. 2. At the outset, Ld. Counsel for the assessee submitted that under the instructions of the assessee, the assessee does not wish to prosecute the M.As, a letter in this regard is also placed on record. He contended that the grievance of the assessee has been addressed in the order of the Special Bench of the Tribunal. 3. Ld.Sr.DR for the Revenue has no objection in this regard. 2 | Page 4. We have heard the contentions of both the parties and perused the material available on record. Ld. Counsel for the assessee has filed a letter dated 25.07.2018 in support of his contention. The relevant contents of the letter are reproduced as under:- 1. “Reference captioned appeals, vide order dated 4th April, 2018 the Hon'ble Division Bench of ITAT has made a reference to the Hon'ble President for constitution of a Special / Larger Bench u/s 255(3) of the Act to decide the above appeals and the questions referred therein. It is respectfully submitted that while making a reference for constitution of Larger / Special Bench inadvertently certain mistakes have been committed which requires exercise of powers u/s 254(2) of the Act. 2. It is submitted that captioned appeals seek an adjudication from Hon'ble ITAT on following two issues i.e. A. Whether Credits received by IndiGo from M/s IAE & Others are liable to tax Ground Nos 3 to 6 in ITA 3224/Del/2017(A) & Ground Nos 1 & Additional Ground in ITA 2977/DEL/2017(D) B. Whether Supplementary Rent paid by IndiGo to the Lessors is an allowable expenditure - Ground No. 7 in ITA 3224/Del/2017(A) & Ground No. 2 In ITA 2977/DEL/2017(D). 3. In this regard during the course of hearing (kindly refer para 7) it was submitted by the assessee that both the above issues have been thoroughly examined by Hon'ble 3 | Page Division Bench of ITAT in AYs 2007-08 vide order dated 18th July 2016 in ITA No. 2202/Del/2012 which has thereafter also been followed by another Division Bench of Hon'ble ITAT in AYs 08-09 and 09-10 vide order dated 18th November 2016 in ITA Nos 749 & 750/Del/2016. Hon'ble Bench was also apprised that being aggrieved revenue filed appeals before Hon'ble Delhi High Court for AYs 2007- 08, 2008-09 and 2009-10 and the Hon'ble High Court has framed substantial question of law and admitted the appeal filed by the Revenue only on issue (A) above. For the purposes of this MA it will be relevant to note that as regards issue B it was specifically submitted by IndiGo as under (refer written synopsis filed on February 22, 2018): Nature of Supplementary Rent Payment Amount (Rs.) Submission Payments made under Agreements Lease executed prior to 01st April 2007 61,81,04,551/- Payment exempt in hands of lessor as per section 10(15A). ITAT decided this issue in favour of 'A' in AYs 2007-08, 2008-09 and 2009-10. Revenue appeal on this issue dismissed by High Court (refer pages 942 and 943 of PB). Payments made under Lease Agreements executed after 01st April 2007 2,76,28,59,861/- Lessor's income not chargeable to tax in India. Use of Aircraft specifically excluded from definition of "royalty" as per Article 12 of India Ireland DTAA. However, since the issue has not been examined from this specific point of view by lower authorities matter may be remanded back to AO. However issue regarding SR being an "expense" u/s 37(1) of the Act be decided by the Hon'ble ITAT. Total 3,38,09,64,412/- 4 | Page 3.1 In reply it was claimed by the tax department that orders passed by Hon'ble ITAT for AYs 2007-08 to 2010-11 on issue (A) above are erroneous. It was also claimed that entire facts were not considered by the earlier decisions of Hon'ble ITAT and as such the earlier Division Bench decisions are not a binding precedent. On issue B, Ld Special Counsel for department acknowledged the fact that partly {i.e to the extend section 10(15A) applies this issue is covered in favor of IndiGo by orders of Hon'ble High Court for AYs 2007-08, 2008-09 and 2009-10. For balance it was agreed that matter requires re-adjudication by the AO for applicability of DTAA provisions. 4. Hon'ble ITAT vide order dated 4th April, 2018 found some merit in the submissions made by the tax department on issue (A) above in the following words: "On consideration of the issue, we have a doubt Whether subsidy can be granted out of commercial transaction?" Reasons given in support of reference made are as under (kindly refer para 9): "9............We may note that whatever submissions have been made on behalf of the Revenue now, have not been raised before the ITAT, Delhi Bench in A.Y. 2007-08. It was not submitted on behalf of the Revenue in A.Y. 2007-2008 and others that subsidy cannot arise out of commercial transaction as it being not given by the Government or Statutory Authority under any Scheme formulated by the Government. Though the original of the agreements were produced in the Court, but when same were not produced 5 | Page before the authorities below or considered in earlier years, it would have an impact on taxability of income in the case of assessee and shall have to be gone into by Revenue Authorities. The Ld. CIT(A), has asked for the complete documents because assessee erased the amount of credit in the copies supplied to the Revenue Department but assessee failed to supply the complete set before the authorities below. Therefore, there were no examination of documents by the authorities below to look into the exact amount of credit received by the assessee. On consideration of the issue, we have a doubt Whether subsidy can be granted out of Commercial transaction? We find some merit in the arguments of the Learned Counsel for the Revenue that the order of the Tribunal for A.Y. 2007- 2008 may not be a binding precedent because of the points highlighted by the Counsel for the Revenue. However, the Coordinate bench of the Tribunal had no right to come to a conclusion contrary to one reached by another Bench of the same Tribunal on the same facts. If the Tribunal wanted to take an opinion different from the one taken by the earlier Bench, it ought to place the matter before the Hon'ble President of the Tribunal, so that, the Hon'ble President could have referred the matter to a Larger Bench... 5. It is submitted that following mistakes have inadvertently been committed which requires rectification:- I. Inadvertently entire appeal has been referred for constitution of a Larger Bench - A perusal of the order passed by Hon'ble ITAT depicts that accepting the 6 | Page submissions made by the tax department the core issue framed for adjudication is as under :-"Whether FIA credit can be treated as subsidy ? And Whether it is capital receipt or revenue receipt?" Undisputedly, the above issue relates only to issue (A) above and it is on this issue alone, that the Hon'ble Bench has expressed a doubt as to: "Whether subsidy can be granted out of commercial transaction?" After having expressing the above doubt, Hon'ble Bench has proposed the following questions for an adjudication by a Larger / Special Bench. "Whether FIA (Fleet Introductory Assistance) Credit is Capital or Revenue receipt arising out of the commercial transaction would be of utmost importance? As regards issue (B) the argument made by tax department is recorded in para 8 as under: ".....The deduction of lease rent are not allowable under section 37 of the I.T. Act, 1961. It was submitted that provisions of Section 10 (15A) granting exemption to lease rent stands omitted in respect of agreement entered into after 01.04.2007......" From a perusal of order dated 04th April 2018 it is apparent that the legal issue framed for reference to the Larger / Special Bench is stated to be the core issue 7 | Page framed and the doubts expressed. The core issue on which a doubt has been raised relates to taxability of Credits received by IndiGo. However, while seeking to clarify this doubt (inadvertently) in addition the entire appeal has been referred. It is respectfully submitted that, the applicant is not doubting the power of Hon'ble Division Bench to make such a reference, however when there is no doubt on an issue (i.e issue (B) - especially considering that this issue is no more res integra post Delhi High Court decision in applicant's own case) making a reference to Special / Larger Bench to decide the entire appeal is an inadvertent error which requires exercise of powers u/s 254(2) of the Act. A mechanical reference of the entire appeal to Larger / Special Bench is not in order (Reference Jagati Publications Ltd reported in 377 ITR 31 (Bom)). II. Additional Ground of appeal filed by tax department also referred for adjudication by the Larger / Special Bench without admission - It is submitted that in ITA No. 2977/Del/2017 an application seeking admission of additional ground of appeal was filed by the tax department vide letter dated 15th January 2018. In reply vide letter dated 23rd January 2018 IndiGo had raised objections towards admission of the additional ground of appeal. Additional ground raised is yet to be admitted in accordance with law laid down by Hon'ble Jurisdictional High Court in case of Maruti Udyog reported in 244 ITR 303(Del). It is trite law that only issues arising out of impugned order form part of the subject matter of appeal before Hon'ble ITAT. The issue raised by tax department in 8 | Page additional ground application regarding applicability of section 28(iv) does not arise out of the impugned order passed by CIT(A). Without admission of additional grounds the same does not form part of the subject matter before Hon'ble ITAT. Reference of an issue which does not form part of subject matter of appeal is an inadvertent mistake which requires exercise of powers u/s 254(2) of the Act. 6. Therefore for the reasons as stated above, this is a matter which requires exercising of powers envisaged by section 254(2) by the Hon'ble Bench and for passing appropriate orders.” 5. Therefore, in view of the letter of Ld. Counsel for the assessee, stating that the grievance of the assessee has been addressed and he does not wish to prosecute the instant applications. Accordingly, both miscellaneous applications filed by the assessee are dismissed. 6. In the result, both Miscellaneous Applications filed by the assessee are dismissed. Order pronounced in the open Court on 18 th December, 2023. Sd/- Sd/- (PRADIP KUMAR KEDIA) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIAL MEMBER * Amit Kumar * 9 | Page Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI
