The Income Tax Appellate Tribunal (ITAT) has overturned the tax demand of approximately ₹21,000 crore on listed company Noida Toll Bridge Company Limited (NTBCL), an IL&FS Group entity, that had built and today manages the Delhi-Noida-Delhi (DND) flyway.
The demand pertains to tax liability and penalty for nine years (from FY 2006 to FY 2015) aggregating ₹21,000 crore including ₹10,893 crore in demand and ₹10,893 crore from penalty, for alleged concealment of income and not submitting proper income details.
The Income Tax department had issued an assessment order on December 31, 2008 and thereafter initiated reassessment proceedings to disallow amortisation of interest on zero coupon bonds issued by NTBCL, taxation of designated returns as taxable income and treating land provided on lease by NOIDA/DDA as subsidy, disallowance of depreciation on DND Toll Bridge, besides other issues.
The Company had contested the claims challenging the jurisdiction of the officers in issuing reassessment and enhancement notices and challenged various additions and disallowances on their merits.
The Tribunal, in its August 8, 2023 order struck down the reopening of assessment, enhancement of assessment and also allowed relief on additions made by the tax department for 6 out of 9 assessment years (from FY 2006 to FY 2012) —thereby rejecting around ₹16000 crore tax demand and allowed the appeal of Company against penalty orders which were also later disposed of by the tribunal in its order on May 17, 2024 in favour of NTBCL.
Subsequently, in its order of August 20, 2024, the Tribunal allowed the appeal of the Company for the balance 3 years, thereby addressing the entire tax demand of the IT Department for 9-year period in favor of the company. The issue of penalty for these three years was also disposed in favour of NTBCL in September 4, 2024.
“Considering the fact that the Co-ordinate Bench of the Tribunal in the quantum Appeal, deleted the additions made against the assesses, the order of the penalty proceedings being consequential to the said additions, will not sustain. Accordingly, the impugned orders of the penalty are hereby quashed”, said ITAT in its latest order dismissing the penalty proceedings as well.
“With this order, the complete demand and penalty of about ₹21,000 crore has been fully addressed in favour of the company,” said NTBCL spokesperson in a statement.
Published – September 19, 2024 09:59 am IST