Assessee's appeal dismissed for failing to update email address and claiming exceptional items as revenue expenditure under section 143(3)

ITAT Delhi dismissed the assessee's appeal challenging assessment u/s 143(3). The tribunal held that failure to receive notices due to changed email address without informing revenue authorities was not the AO's fault, as the assessee had accessed registered email until February 2020. Regarding disallowance of exceptional items worth Rs. 144.49 crores claimed as revenue expenditure, the tribunal ruled this represented income from granting 99-year lease rights to RFCL in exchange for equity shares, not deductible expenditure. The tribunal directed AO to avoid double taxation if the amount was offered to tax in subsequent years.

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Issues Involved:
1. Validity of assessment under Section 143(3) without proper notice.
2. Disallowance of Rs. 144.49 crores in respect of exceptional items claimed in the profit and loss account.
3. Charging of interest under Sections 234A and 234B.

Summary:

Issue 1: Validity of Assessment under Section 143(3) Without Proper Notice
The Assessee contended that the assessment under Section 143(3) was invalid due to failure to serve notices at the registered e-mail address, resulting in a lack of reasonable and adequate opportunity of hearing. The Tribunal found that the Assessee had partially complied with notices issued under Sections 143(2) and 142(1), indicating access to the registered e-mail address until February 1, 2020. The Assessee's claim of a subsequent change in e-mail id was not communicated to the Revenue Authorities. Thus, the Tribunal found no merit in this ground and dismissed it.

Issue 2: Disallowance of Rs. 144.49 Crores in Respect of Exceptional Items
The Assessee argued that the disallowance of Rs. 144.49 crores was erroneous, asserting that the shares issued by RFCL were capital in nature and not intended as income. The Tribunal noted that the Assessee had entered into a concession agreement with RFCL, resulting in the issuance of shares valued at Rs. 144.49 crores in lieu of the right to use the Assessee's capital asset. The Tribunal upheld the disallowance, stating that the shares were acquired as a result of the exploitation of capital assets, which should be treated as revenue income. The Tribunal also directed the A.O. to ensure that the same amount is not taxed again in subsequent years to avoid double taxation.

Issue 3: Charging of Interest Under Sections 234A and 234B
The Tribunal did not provide specific details on this issue in the judgment summary, implying that the primary focus was on the first two issues.

Conclusion:
The appeal filed by the Assessee was dismissed, with the Tribunal upholding the assessment and disallowance made by the A.O. and the CIT(A). The Tribunal provided directions to avoid double taxation of the disputed amount in subsequent years.

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