The case ITA 904/DEL/2021 showcases the complexities faced by corporations in maintaining tax compliance across different operational units. This particular case between Ajanta Offset & Packagings Limited and the Income Tax Officer of TDS Ward, Faridabad, centers on discrepancies in tax deductions at source (TDS) for the assessment year 2013-14.
Ajanta Offset & Packagings Limited, a company with multiple units in Faridabad and Delhi, encountered issues with TDS compliance. The Income Tax Department’s survey revealed that while TDS deductions were correctly handled for the Faridabad unit, they were completely overlooked for the Delhi unit, particularly concerning the tax deductions for the fourth quarter of the fiscal year 2012-13.
The company challenged the assessment orders dated March 24, 2020, pertaining to the assessment years 2012-13, 2013-14, and 2014-15. The proceedings highlighted the need for clear and separate financial records for different business units to ensure accurate tax compliance. Despite the company’s efforts to address these issues through remand reports, the initial ruling favored the Income Tax Department, citing insufficient evidence to separate the expenses and payments between the two units.
During the tribunal proceedings, it was revealed that the National Company Law Tribunal (NCLT) had initiated a Corporate Insolvency Resolution Process for the company, appointing an Interim Resolution Professional. This development significantly impacted the proceedings, leading to the remand of the case back to the Commissioner of Income Tax Appeals to reconsider the findings in light of the ongoing insolvency proceedings.
The ITA 904/DEL/2021 case underlines the importance of meticulous financial management and the impact of corporate structure on tax obligations. The involvement of insolvency proceedings further complicates the tax assessment process, demonstrating the interconnected nature of corporate finance and tax compliance.
Tax Compliance Issues in ITA 904/DEL/2021: Ajanta Offset vs ITO, Faridabad
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform