Jet Airways Fails To Comply With The Notices In spite Of Several Opportunities: ITAT Imposes Cost Of Rs. 25,000 Payable To PM Relief Fund

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has observed that Jet Airways has failed to comply with the notices issued by the lower authorities in spite of several opportunities. Jet Airways was directed to pay a cost of Rs. 25,000 for being delinquent before the lower authorities which was to be paid to the Prime Minister’s Relief Fund within 30 days.

The two-member Kavitha Rajagopal (Judicial Member) and Prashant Maharishi (Accountant Member), have observed that the assessee may be given one last opportunity to present its case before the AO. It is also clear that the Exchequer expended a significant amount of time and money in carrying out the assessment proceedings that followed the appellate proceedings.

The assessee, Jet Airways, is a public limited company engaged in the business of scheduled airlines, carrying out transportation of passengers and cargo and other allied services. It was incorporated under the Companies Act, of 1956, on April 1, 1992, and has a board of nine directors. The assessee filed an income tax return on November 29, 2016, declaring a total income of Nil under normal provisions and a book loss of Nil.

Pursuant to the survey action conducted in the case of the assessee, his case was selected for scrutiny. According to Form No. 3CED and the survey report, the assessee entered into a large-value international transaction with its Associated Enterprises (AEs). The assessee was issued a notice calling for details, documents, evidence, and an explanation, along with a copy of the order seeking the assessee’s explanation as to the transfer pricing adjustment proposed by the TPO.

It is observed that in spite of several notices, the assessee has failed to furnish details before the AO except for a letter received from Ashish Chhawchharia, Resolution Professional for Jet Airways (India) Ltd., stating that the assessee company was undergoing Corporate Insolvency Resolution Process (CRIP) as per the Insolvency and Bankruptcy Code, 2016 as directed by the National Company Law Tribunal (NCLT), seeking for the assessment proceedings to be kept in abeyance. The assessee was served with a new notice requesting additional information, documents, and explanations.

The AO made the addition under the normal provisions, which was more than that of the income computed, in which the income under the normal provision was considered for computing the tax liability of the assessee company.

The assessee contended that since the assessee’s company was going through insolvency proceedings before the NCLT, the assessee was unable to furnish the required documentary evidence along with the explanation proposed by the assessee in view of the various additions made by the AO.

The department has vehemently opposed remanding this issue back to the A.O. for the reason that the assessee has been given a sufficient opportunity before the lower authorities to present its case.

The ITAT directed the assessee to appeal and fully cooperate with the AO to present its case without any further delay.

Case Title: M/s. Jet Airways (India) Limited Versus DCIT

Citation: IT A Nos. 2379 & 2380/Mum/2022

Date: 24.02.2023

Counsel For Appellant: Vijay Mehta

Counsel For Respondent: Manoj Mishra

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