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Income Tax Appellate Tribunal, “I” BENCH, MUMBAI
Before: SHRI OM PRAKASH KANT, AM & MS. KAVITHA RAJAGOPAL, JM
per Article 2(1)(v)(i) of the treaty. The ld. CIT(A) further held that as per Article 2(1)(b)(i), the income tax shall include surcharge and no further levy of surcharge @ 5% and education @ 3% was to be levied. The ld. CIT(A) relied on the decision of the co- ordinate bench in the case of DIC Asia Pacific Pte. Ltd. vs. ADIT [2012] 22 taxmann.com [2014] 41 taxmann.com 193 (Mum). It is observed that the ld. CIT(A) has allowed the appeal filed by the assessee with regard to the interest and the penalty proceedings also.
The assessee is in appeal before us, challenging the ground that the ld. CIT(A) has failed to adjudicate the additional ground raised by the assessee challenging the validity of the final assessment order as per the amended provision of section 144C of the Act.
The learned Authorised Representative ('ld. AR' for short) for the assessee stated that the ld. CIT(A) has given relief to the assessee by holding that the assessee was not entitled to surcharge and cess as per the India-USA DTAA. The ld. AR further contended that the ld. A.O. has not passed the order giving effect to the ld. CIT(A)’s order and that there will be no grievances of the assessee if the ld. A.O. passes the said order.
The learned Departmental Representative ('ld.DR' for short), had nothing to controvert the said fact.
We have heard the rival submissions and perused the materials available on record. Though the assessee has raised a legal ground, challenging the validity of the final assessment order, the ld. AR stated that the ld. CIT(A) has already given relief to the assessee by holding that the assessee was not entitled to further surcharge and cess which was inclusive of 15% tax levied on the royalty income. It is observed that the ld. A.O. inspite of the ld. CIT(A)’s order dated 23.01.2023 has not yet passed the order giving effect of the ld. CIT(A). If the same has been passed by the ld. A.O. there would be no scope for further adjudication as the assessee would get its relief and since the Revenue
4 & 849/Mum/2023 (A.Y.2014-15) Warner Bros. International Television Distribution Inc. vs. Asst. CIT (IT) has not appealed against the order of the ld. CIT(A), the same has reached finality. We, therefore, direct the A.O. to pass the order giving effect of the ld. CIT(A), if the same is not given so far.
In the result, the appeal filed by the assessee is allowed for statistical purpose.
The grounds of appeal raised by the assessee in this appeal are as follows:
Ground Ground of appeal
Tax effect no. (INR) On the facts and in the circumstances of the case and in law, the ld. A.O. has well as the ld. CIT(A) failed to appreciate that the failure to file the 1 return of income was due to a bona fide belief and plausible understanding of law that the Appellant was not required to file return as the entire tax liability was discharged through TDS. On the facts and in the circumstances of the case and in law, the ld. A.O. has grossly misunderstood the provisions of law in stating that “as the assessee has not filed its return of income which was required to be filed as 2 per section 139(1) and 115A(5) of the Act thus the assessee ahs concealed its particulars of income as per the section 271(1)(c)”. The CIT(A) erred in confirming the same. 10,98,10,108 On the facts and in the circumstances of the case and in law, penalty u/s. 271(1)(c) is not leviable as there is no amount of tax sought to be evaded.
3. The entire tax payable on assessed income is paid by way of tax deducted at source. On the facts and in the circumstances of the case and in law, the ld. A.O. as 4 well s the ld. CIT(A) failed to appreciate that there was no concealed income. Assuming though not accepting that penalty is leviable, the ld. CIT(A) 5 failed to cosndier that the tax sought to be evaded is calculated at the rate of 16.2225% whereas the applicable rate is 15%. Total Tax Effect = Rs.10,98,10,108
14. The assessee has raised various grounds in this appeal and that would become academic when the ld. A.O. passes the order giving effect to the order of the ld. CIT(A). we, therefore, direct the ld. A.O. to pass the order giving effect to the ld. CIT(A)’s order.
In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on 27.10.2023.