PHILIPS INDIA LIMITED,KOLKATA vs. A.C.I.T., CIRCLE - 11(1), KOLKATA

ITA 1776/KOL/2024Status: DisposedITAT Kolkata20 March 2026AY 2008-2009Bench: the Tribunal raising the\nfollowing grounds of appeal for AY 2008-09 and more or less similar\ngrounds of appeal have been raised in the appeals for other A.Ys. as\nwell:\nITA No(s). 1776 to 1783/KOL/2024\nAssessment Year(s) 2008-09 to 2015-16\nPhilips India Limited.\n“1. That on the facts and circumstances of the case, the National Faceless\nAppeal Centre, Delhi [the Ld. CIT(A)] erred in rejecting the claim of refund\nof excess Dividend Distribution Tax (DDT) paid by the Appellant\namounti7 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the Dividend Distribution Tax (DDT) is not a tax on the income of the assessee that would trigger the applicability of the DTAA. Instead, it is a charge levied at a specified rate on the profits of the company distributed as dividend, introduced for the specific purpose of taxing distributed profits. The Tribunal noted that the rate of DDT and the rate of tax applicable to the shareholder's income could be different. Furthermore, the Tribunal found that the assessee had not filed any return of income for claiming the refund in accordance with the provisions of Section 139 of the Act, as required under Section 239(1) of the Act. Consequently, the assessee's claim for refund was held to be not maintainable. The Tribunal dismissed the grounds of appeal and confirmed the order of the Ld. CIT(A) for all assessment years. The issue of consequential interest under Section 244A was not decided as the primary claim for refund was dismissed. The Tribunal did not expressly leave any issue undecided, but the reasoning implicitly addressed the applicability of DTAA and the procedural requirement for claiming refunds.

What were the facts?

The assessee, Philips India Limited, filed appeals against orders of the CIT(A)-NFAC, Delhi, for Assessment Years (AYs) 2008-09 to 2015-16. The appeals challenge the rejection of claims for refund of excess Dividend Distribution Tax (DDT) paid. For AY 2008-09, the assessee had paid DDT of ₹2,30,36,643/- on a dividend of ₹13,55,49,560/- paid to its parent company, Philips Netherlands. The assessee sought a refund of DDT paid in excess of the rates prescribed under the India-Netherlands Double Taxation Avoidance Agreement (DTAA), along with interest. The Assessing Officer (AO) rejected the claim via an order under Section 154. The CIT(A) dismissed the assessee's appeal, following the Special Bench decision in DCIT vs. Tata Oil India Pvt. Ltd., and holding that DDT is a tax on the company's profits, not the shareholder, and that DTAA is not triggered in such cases. The CIT(A) also noted that the Jurisdictional High Court in Exide Industries Limited had only admitted a question of law, not stayed the order.

What were the issues?

1. Whether the National Faceless Appeal Centre, Delhi (Ld. CIT(A)) erred in rejecting the claim of refund of excess Dividend Distribution Tax (DDT) paid by the Appellant amounting to Rs.94,81,687, turning on the nature of DDT and its refundability under the DTAA. 2. Whether the Ld. CIT(A) erred in following the Special Bench decision of the Mumbai Tribunal in DCIT vs. Tata Oil India Pvt Ltd, which held that DDT is a tax on the profits of the domestic company and not on the shareholder. 3. Whether the Ld. CIT(A) erred in not appreciating the Supreme Court decisions in Tata Tea Co. Ltd. and Godrej and Boyce Manufacturing Company Ltd. regarding the nature of DDT. 4. Whether the Ld. CIT(A) erred in holding that the Double Taxation Avoidance Agreement (DTAA) is not applicable as DTAA does not get triggered when a domestic company pays DDT under Section 115-O of the Income Tax Act, 1961. 5. Whether the Ld. CIT(A) erred in rejecting the Appellant's request to keep the matter in abeyance, considering the Jurisdictional High Court's admission of a question of law in the case of Exide Industries Limited. 6. Whether consequential interest under Section 244A of the Income Tax Act, 1961, along with the refund of excess DDT, should be allowed. Assessee's contentions: The assessee argued that the Bombay High Court had ruled in its favour and that there were other Tribunal decisions supporting its claim. It also contended that the Supreme Court decisions in Tata Tea and Godrej and Boyce were not fully appreciated by the Ld. CIT(A) and that the DTAA should be applicable. The assessee also sought to keep the matter in abeyance pending the jurisdictional High Court's decision in Exide Industries. The assessee also claimed there was no time limit for claiming a refund. Revenue's contentions: The Revenue argued that the appeals were filed after a significant delay. It contended that DDT is a mandatory charge on the profits of the company distributed as dividend and is not a tax on the shareholder, thus DTAA is not applicable. The Revenue also pointed out that the assessee had not filed a return of income for claiming the refund as required under Section 239(1) of the Act.

Which sections of the Income-tax Act were involved?

Section 115-O,Section 250,Section 244A,Section 154,Section 237,Section 139,Section 239

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, KOLKATA ‘C BENCH AT KOLKATA

Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA

PER BENCH: All these appeals filed by the assessee are against the separate orders of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act') for AYs 2008-09 to 2014-15 dated 29.06.2024 and 28.06.2024 for AY 2015-16.

1.

1 Since the issues are common, all the appeals were heard together and are being decided vide this common order for the sake of convenience and brevity.

2.

The assessee is in appeal before the Tribunal raising the following grounds of appeal for AY 2008-09 and more or less similar grounds of appeal have been raised in the appeals

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 115-O

All 331 judgments and leading authorities on Section 115-O →

Recent GST High Court judgments

Search GST case law →