Jet Lite's Defence In FBT Proceedings Cannot Be Treated As Furnishing Inaccurate Particulars: ITAT Delhi

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the deletion of penalties exceeding ₹7.6 crore imposed on Jet Lite (India) Ltd. in a fringe benefit tax (FBT) dispute

The tribunal held that the assessee had sought to justify its case against the fringe benefit assessment and that this could not be treated as furnishing inaccurate particulars.

A bench of Judicial Member Satbeer Singh Godara and Accountant Member Manish Agarwal dismissed the Revenue's appeals against orders of the Commissioner (Appeals) deleting penalties for Assessment Years 2007-08 and 2008-09. The Tribunal also dismissed Jet Lite's appeals against the fringe benefit tax assessments for Assessment Years 2007-08 and 2008-09.

The tribunal observed,

“the assessee had indeed sought to justify its case against fringe benefit assessment in quantum proceedings which could not be treated as an instance treated as furnishing of inaccurate particulars of income as per Reliance Petro Products (Pvt ) Ltd ( 2010) 322 ITR 158 ( SC) .”

The dispute concerned additions made to the value of taxable fringe benefits. These included free or concessional air tickets provided to employees, hospitality expenses, conveyance expenses, hotel boarding and lodging expenses, and travel expenses.

The Assessing Officer treated these expenses as taxable fringe benefits. Penalties were also levied on the ground that Jet Lite had furnished inaccurate particulars by not including them in the value of taxable fringe benefits.

The Commissioner (Appeals), however, deleted the penalties. While doing so, the Commissioner noted that Jet Lite had disclosed its position on the disputed items in its annual accounts and tax audit report.

This included disclosures relating to free and concessional tickets issued to employees. The Commissioner also placed reliance on the Supreme Court's ruling in CIT v. Reliance Petroproducts Pvt. Ltd.

Before the tribunal, the Revenue contended that the Assessing Officer had rightly treated the assessee's action in not declaring fringe benefits under various heads as an instance of furnishing inaccurate particulars.

Rejecting the contention, the tribunal held that the Commissioner (Appeals) had rightly concluded that the assessee's explanation regarding the fringe benefit assessment could not be treated as furnishing inaccurate particulars.

Accordingly, the tribunal dismissed the Revenue's appeals and upheld the deletion of penalties. It also dismissed the assessee's appeals against the fringe benefit tax assessments.