Relief to IBIBO: Delhi HC stays Re-Assessment Order [Read Order]

The Delhi High Court stayed re assessment order passed against IBIBO Group, an online travel agency.

The writ petition has been filed challenging the order passed under Section 148A(d) of the Income Tax Act, 1961, and the notice issued under Section 148 of the Income Tax Act.

The Counsel for the petitioner submitted that there exists no information which suggests income chargeable to tax has escaped assessment in the hands of Petitioner and stated that the Petitioner has not claimed any deduction on account of alleged service tax collected from its customers in its Return of Income (ROI) for the subject year and therefore, Section 43B has no application.

The Counsel further submitted that the liability to deposit service tax collected from customers with respect to hotel bookings is on hotels being the provider of service and the Petitioner has always acted in the capacity of an online travel agent engaged in the business of facilitating the hotel rooms on behalf of the hotel.

The Counsel also pointed out that the Respondent, Deputy Commissioner of Income Tax and Another has made a statement in relation to the business model of the Petitioner stating that the Petitioner is engaged in the business of renting hotel rooms to final customers, which is incorrect and is contrary to the original assessment order

The Counsel also emphasized the Petitioner’s ROI has been subjected to detailed scrutiny during the course of assessment proceedings under Section 143(3) of the Income Tax Act. He states that the business model of Petitioner Company had been duly examined by Respondent.

A Division Bench consisting of Justice Manmohan and Justice Manpreet Pritam Singh Arora ordered that “Though, the Assessing Officer is permitted to pass the reassessment order yet the same shall not be given effect to and shall be subject to further orders to be passed by this Court.”

The petitioner issued the notice to the department.

To Read the full text of the Order CLICK HERE

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