The Delhi bench of Income Tax Appellate Tribunal (ITAT) has recently held that assessee is not liable to explain receipts shown in Form No.26AS.
The Assessee Travelport LP is a limited partnership based in the state of Delaware, USA having its principal business at Georgia and is engaged in the business of providing information reservations, transaction processing and related services of airlines, travel agencies and other travel related entities. The assessee owns and operates a global distribution system located outside India and provides subscribers with access to and use of this GDS.
As per the information received through non-filers monitoring system, the Assessing Officer came to know that the assessee has received a sum of Rs. 6,63,17,256/- from different Airlines operating in India. The Assessing Officer found that the assessee has not filed its return of income. Pursuant to the notice issued by the assessing officer assessee filed return of income declaring income at NIL.
While scrutinizing the return of income, the Assessing Officer noticed that the assessee did not have any receipts in India during the year under consideration though the Revenue appears in Form No. 26AS.
The assessee was asked to explain why it did not file its return of income in spite of having receipts during the year as appearing in Form 26AS.
After getting the reply from the assessee ,the assessing officer concluded by holding that the assessee has Permanent Establishment in India and profit of 100% was attributed to the assessee company and addition of Rs. 6,63,17,256/- was made. Against the order made by the assessing officer assesee filed an appeal before the ITAT.
Ravi Sharma counsel for the assessee submits that is not an eligible assessee within the provisions of section 144C of the Income Tax Act, 1961. Therefore, being an eligible assessee, there was no need for framing the draft assessment order and by doing so, the final assessment order dated 21.06.2019 is void ab initio.
Jitender Kumar, counsel for the revenue, supported the decision of the lower authorities.
After considering the contentions of the both parties the division bench of the ITAT comprising N.K. Billaiya, (Accountant Member), and Anubhav Sharma, (Judicial Member) allowed the appeal filed by the assessee and observed that Assessing Officer has put the entire burden on the assessee to show in whose hands the receipts shown in Form 26AS has been declared. Further assessee was not responsible to explain the recipients of the receipts shown in Form No. 26AS.
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