IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘H’ NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No. 1160/Del/2024 Assessment Year: 2020-21 Bharti Airtel Limited, Vs. Principal CIT, Airtel Centre, Plot No.16, Delhi-1, Udyog Vihar Phase – IV, Delhi-1100 02 Gurgaon ( Haryana )

PIN: 1220 15 PAN :AAACB2894G (Appellant) (Respondent)

Assessee by : S/Shri Ajay Vohra, Sr. Advocate, Rohit Jain, Deepesh Jain, Advs. & Shri Shivam Gupta, CA Respondent by : Shri S.K. Jhadav, CIT DR Date of hearing : 23.01.2025 Date of pronouncement : 21.02.2025 ORDER PER ANUBHAV SHARMA, JM:

This appeal by the assessee is preferred against the order dated

19.01.2024 passed under section 263 of the Income Tax Act, 1961 [hereinafter referred as ‘the Act’] by the Principal Commissioner of Income Tax (Appeals)- 1, Delhi [hereinafter referred to as Revisional Authority or in short “PCIT”] pertaining to assessment year 2020-21 and arises out of the assessment order dated 10.10.2023, passed u/s 143(3) r.w.s 144C(13) of the Act, by assessing officer, Circle 4(2), New Delhi (here inafter referred in short as ‘AO”)

2. Heard and perused the records. The assessee is engaged in the business of providing cellular mobile telephone services and landline services and other associated value added services and internet service. During the relevant year ending on 31.03.2020, the assessee company gave effect to the demerger of consumer mobile business undertaking of M/s Tata Tele Services Ltd. with the assessee on 1st July, 2019 being the effective and the appointed date of the scheme of arrangement u/s 230 to 232 of the Companies Act, 2013. The case of the assessee was selected for complete scrutiny assessment through CASS for various reasons and statutory notices were issued. In the mean time, reference to the TPO was made by the National Faceless Assessment Centre after getting necessary statutory approval for determination of arm’s length price for the international transaction undertaken by the assessee during the year under consideration.

3. Thereafter, due to restructuring of case for the reasons of merger, amalgamation, demerger, etc., it was transferred out of Faceless Assessment Centre u/s 144B(8) of the Act to the jurisdictional Assessing Officer. The assessment was completed on 10.10.2023 by adjustments recommended by the TPO u/s 92CA of the Act making addition of Rs.457,64,80,114/-. Further, Ld. AO has made a disallowance on account of ESOP expenses; a disallowance u/s 40(a)(ia) was made on account of free air time; disallowance was made on account of variable license fee. A modified claim pursuant to the Hon’ble Supreme Court order dated 24.10.2019 was made and the business income was recalculated. Thereafter, adjustments on account of income from short-term capital gain, brought forward short-term capital loss, income from long-term capital gain and brought forward long-term capital loss were made and further, taking into account income from other sources, the loss returned of the assessee of Rs.453,56,97,41,897/- was recalculated to Rs.547,39,89,21,868/-. Soon, after conclusion of this assessment u/s 143(3) read with section 144C(3) dated 10.10.2023, the jurisdictional PCIT issued show cause notice dated 22.12.2023 u/s 263 proposing to revise the assessment order dated 10.10.2023. The said show cause notice was primarily on the basis that proper inquiries were not conducted by the AO in so far as huge claims had been allowed without verification and examination, thereby rendering the assessment order erroneous and prejudicial to the interest of the Revenue. The assessee had responded to the show cause notice by submissions dated 22.12.2023 and after taking into consideration the submissions and the objections to the exercise of jurisdiction, the impugned order was passed whereby the revisional authority enhanced the assessment on certain issues and set aside the assessment on some other issues.

4. During pendenc