Assessee Not Responsible To Explain Recipients Of Receipts Shown In Form No. 26AS: ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the assessee is not responsible to explain the recipients of the receipts shown in Form No. 26AS.

The two-member bench of Anubhav Sharma (Judicial Member) and N.K. Billaiya (Accountant Member) while deleting the additions observed that the Assessing Officer should have asked the payer, for details of the payee to whom payments have been made by the payer on which it could deduct tax at source.

As per the information received through the non-filers monitoring system, the Assessing Officer came to know that the assessee has received a sum from different Airlines operating in India. The Assessing Officer found that the assessee has not filed its return of income for the F.Y. 2010-11 relevant to Assessment Year 2011-12.

The Assessing Officer issued a notice under section 148 of the Income Tax Act, pursuant to which, the assessee filed a return of income declaring income at NIL. The appellant/assessee is a limited partnership based in the state of Delaware, USA having its principal business in 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.

While scrutinizing the return of income, the Assessing Officer noticed that the assessee did not have any receipts in India 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.

The assessee contended that the assessee cannot be termed as an eligible assessee within the provisions of section 144C. 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.

The tribunal held that unless the assessee is an eligible assessee under section 144C(15)(b), the Assessing Officer cannot pass a draft assessment order under section 144C of the Income Tax Act. Therefore, all the proceedings consequent thereupon are also invalid. Consequently, the draft assessment order as well as the final assessment order is quashed.

Case Title: M/s Travelport LP Versus The Dy. C.I.T

Citation: ITA No. 6503/DEL/2019 [A.Y. 2011-12]

Date: 09.02.2023

Counsel For Appellant: Ravi Sharma, Rishab Malhotra

Counsel For Respondent: Jitender Kumar

Click Here To Read The Order