TINPLATE COMPANY OF INDIA,KOLKATA vs. DCIT(CPC), , BANGALORE

The assessee has raised the following grounds of appeal:- 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not allowing / adjudicating the issue relating to short grant of credit for Dividend Distribution Tax paid (DDT) of INR 84,63,518/-. 2. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not allowing / adjudicating the issue relating to erroneous levy of interest under section 115P of the Act. 3. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not allowing / adjudicating the issue / additional ground relating to claim for deduction of education cess debited in the books of accounts of the appellant. 4. The Appellant craves leave to add to or alter, by deletion, substitution or otherwise, any or all of the above grounds of objections, at any time before or during the hearing of the Appeal. 5. The Appellant submits that the above grounds are independent and without prejudice to one another.

At the outset, in respect of Ground No. 3 relating to the claim for deduction of education cess debited in the books of account of the assessee, the ld. A/R fairly conceded that the matter has been held against the assessee by the co-ordinate bench of

The view of the Income Tax Officer is not correct. Clause 40(a)(ii) of the 2. The view of the Income Tax Officer is not correct. Clause 40(a)(ii) of the 2. The view of the Income Tax Officer is not correct. Clause 40(a)(ii) of the Income Tax Bill, 1961 as introduced in the Parliament stood as unde Income Tax Bill, 1961 as introduced in the Parliament stood as unde Income Tax Bill, 1961 as introduced in the Parliament stood as under:- "(ii) any sum paid on account of any cess, rate or tax levied on the profits "(ii) any sum paid on account of any cess, rate or tax levied on the profits "(ii) any sum paid on account of any cess, rate or tax levied on the profits or gains of any business or profession or assessed at a proportion ot, or gains of any business or profession or assessed at a proportion ot, or gains of any business or profession or assessed at a proportion ot, or otherwise otherwise otherwise on on on the the the basis basis basis of, of, of, any any any such such such profits profits profits or or or gains". gains". gains". When the matter came up before the Select When the matter came up before the Select Committee, it was decided to Committee, it was decided to 'omit the word 'cess' from the clause. The effect of the omission of the 'omit the word 'cess' from the clause. The effect of the omission of the 'omit the word 'cess' from the clause. The effect of the omission of the word 'cess' is that only taxes paid are to be disallowed in the assessments 'cess' is that only taxes paid are to be disallowed in the assessments 'cess' is that only taxes paid are to be disallowed in the assessments for the years 1962-63 and onwards. 63 and onwards. –

The Board desire that the changed pos 3. The Board desire that the changed position may please be brought to ition may please be brought to the notice of all the Income Tax Officers so that further litigation on this notice of all the Income Tax Officers so that further litigation on this notice of all the Income Tax Officers so that further litigation on this account may be avoided.{Board's F . No.91/5B/66 may be avoided.{Board's F . No.91/5B/66-ITJ(19), dated 18 ITJ(19), dated 18-5- 1967.

The Learned Counsel for the assessee in this respect has further 18. The Learned Counsel for the assessee in this respect has further 18. The Learned Counsel for the assessee in this respect has further relied upon the decision of the Hon’ble Bombay High Court in the case of “Sesa Goa Limited decision of the Hon’ble Bombay High Court in the case of “Sesa Goa Limited decision of the Hon’ble Bombay High Court in the case of “Sesa Goa Limited Vs.JCIT“ (2020) 117 taxmann.com 96 and further on the decision of the Hon’ble Vs.JCIT“ (2020) 117 taxmann.com 96 and further on the decision of the Hon’ble Vs.JCIT“ (2020) 117 taxmann.com 96 and further on the decision of the Hon’ble Rajasthan High Court in the case of “Chambal Fertilizers & Chemicals Ltd Vs. Rajasthan High Court in the case of “Chambal Fertilizers & Chemicals Ltd Vs. Rajasthan High Court in the case of “Chambal Fertilizers & Chemicals Ltd Vs. JCIT”: D.B Income-tax Appeal No. 52/2018 decided on 31 tax Appeal No. 52/2018 decided on 31-07-2018, wherein, the 2018, wherein, the Hon’ble High Court/s relied upon the aforesaid CBDT Circular Dt. 18 High Court/s relied upon the aforesaid CBDT Circular Dt. 18 High Court/s relied upon the aforesaid CBDT Circular Dt. 18-05- 1967(supra) and in view of the interpretation made by the CBDT have held that view of the interpretation made by the CBDT have held that view of the interpretation made by the CBDT have held that ‘education cess’ can be ‘education cess’ can be claimed as an allowable deduction while comput allowable deduction while computing the income chargeable under income chargeable under the heads of profits and gains of business or heads of profits and gains of business or profession. The Learned Counsel has ession. The Learned Counsel has further relied upon the following decisions relied upon the following decisions of the Co-ordinate Benches of this Tribunal, who ordinate Benches of this Tribunal, who have followed the have followed the aforesaid judgments of the Hon’ble High Courts: judgments of the Hon’ble High Courts:

However, with due respect to the decisions of the 19. However, with due respect to the decisions of the Hon’ble Bombay High Hon’ble Bombay High Court and Hon’ble Rajasthan High Court and of co and Hon’ble Rajasthan High Court and of co-ordinate Benches of this inate Benches of this Tribunal,we find that the issue is squarely covered by the decision of the Hon’ble find that the issue is squarely covered by the decision of the Hon’ble find that the issue is squarely covered by the decision of the Hon’ble Apex Court of the country in the case of “CIT Vs. K. Srinivasan” (1972) 83 ITR the country in the case of “CIT Vs. K. Srinivasan” (1972) 83 ITR the country in the case of “CIT Vs. K. Srinivasan” (1972) 83 ITR 346, wherein the following questio following questions came for adjudication before the Hon’ble ns came for adjudication before the Hon’ble Apex Court:- “ Whether the words “Income tax” in the Finance Act of 1964 in sub “ Whether the words “Income tax” in the Finance Act of 1964 in sub “ Whether the words “Income tax” in the Finance Act of 1964 in sub-s (2) and sub-s.(2)(b) of s. 2 would include surcharge s.(2)(b) of s. s.(2)(b) of s. 2 would include surcharge 2 would include surcharge and and and additional additional additional surcharge.”

The Hon’ble Supreme Court answered the question in favour of revenue Supreme Court answered the question in favour of revenue Supreme Court answered the question in favour of revenue observing as under:- “In our judgment it is unnecessary to express any opinion in the matter because “In our judgment it is unnecessary to express any opinion in the matter because “In our judgment it is unnecessary to express any opinion in the matter because the essential point for determination is whether surcharge is an additional the essential point for determination is whether surcharge is an additional the essential point for determination is whether surcharge is an additional mode or rate for cha mode or rate for charging income tax. The meaning of the word "surcharge"as rging income tax. The meaning of the word "surcharge"as given in the Webster's New International Dictionary includes amongothers"to given in the Webster's New International Dictionary includes amongothers"to given in the Webster's New International Dictionary includes amongothers"to charge (one) too much or in addition " also "additional charge (one) too much or in addition " also "additional tax".Thus the tax".Thus the meaning of surcharge is to charge of surcharge is to charge in addition or to subject to an additional or in addition or to subject to an additional or extra charge. If that meaning is applied to s. 2 of the Finance Act 1963 it would lead charge. If that meaning is applied to s. 2 of the Finance Act 1963 it would lead charge. If that meaning is applied to s. 2 of the Finance Act 1963 it would lead to the result that income tax and super tax were to be charged in four different to the result that income tax and super tax were to be charged in four different to the result that income tax and super tax were to be charged in four different ways or at four different rates which may ways or at four different rates which may be described as (i) the basic be described as (i) the basic charge or rate (In part I of the First Schedule); (ii) Sur rate (In part I of the First Schedule); (ii) Sur- charge; (iii) special charge; (iii) special surcharge and (iv) additional surcharge calculated in the manner provided (iv) additional surcharge calculated in the manner provided (iv) additional surcharge calculated in the manner provided in the Schedule. Read in this way the additional charges form a part of the income f the income tax and super tax”.

The Hon’ble Supreme Court, therefore, has 21. The Hon’ble Supreme Court, therefore, has decided the issue in favour of the decided the issue in favour of the revenue and held that surcharge and additional surcharge are part of the revenue and held that surcharge and additional surcharge are part of the revenue and held that surcharge and additional surcharge are part of the income-tax. At this stage, it is pertinent to mention here that ‘edu At this stage, it is pertinent to mention here that ‘edu At this stage, it is pertinent to mention here that ‘education cess’ was brought in for the first time by the Finance Act, 2004, wherein it was the first time by the Finance Act, 2004, wherein it was mentioned as under:- - “An additional surcharge, to be called the Education Cess to finance the An additional surcharge, to be called the Education Cess to finance the An additional surcharge, to be called the Education Cess to finance the Government’s commitment to universalise quality basic education, is Government’s commitment to universalise quality basic education, is Government’s commitment to universalise quality basic education, is

Respectfully following the decision of the co Respectfully following the decision of the co-ordinate bench in the case of ordinate bench in the case of M/s. Kanoria Chemicals & Industries Ltd. (supra Kanoria Chemicals & Industries Ltd. (supra) Ground No. 3 of the assessee Ground No. 3 of the assessee is dismissed.

Now coming to Groun Now coming to Ground Nos. 1 & 2 in respect of issue relating to short grant of d Nos. 1 & 2 in respect of issue relating to short grant of credit for Dividend Distribution Tax (DDT) paid for Rs.84,63,518/ credit for Dividend Distribution Tax (DDT) paid for Rs.84,63,518/- and interest thereon and interest thereon u/s 115P of the Act. It is purely a question of fact which needs verification from the . It is purely a question of fact which needs verification from the . It is purely a question of fact which needs verification from the records for the claim of credit for DDT paid by the assessee. The ld. A/R of credit for DDT paid by the assessee. The ld. A/R of credit for DDT paid by the assessee. The ld. A/R submitted that the short grant of credit was made in the processing of the return under the intimation the short grant of credit was made in the processing of the return under the intimation the short grant of credit was made in the processing of the return under the intimation u/s 143(1) of the Act by the CPC, Bangalore. by the CPC, Bangalore. We observed that ld. CIT(A) in his order ld. CIT(A) in his order reproduced the grounds of appeal including grounds for claim of short grant of credit reproduced the grounds of appeal including grounds for claim of short grant of credit reproduced the grounds of appeal including grounds for claim of short grant of credit for DDT and interest thereon vide Ground 2 & 3 raised by the assessee but failed to give for DDT and interest thereon vide Ground 2 & 3 raised by the assessee but failed to give for DDT and interest thereon vide Ground 2 & 3 raised by the assessee but failed to give any finding thereon. In respect of these two grounds the any finding thereon. In respect of these two grounds the ld. A/R submitted that copy of ld. A/R submitted that copy of