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Facts
The assessee paid dividend to its foreign shareholder, Metlife Solutions Pte. Ltd., Singapore, and the Assessing Officer (AO) imposed TDS at 20.358% under section 115-O of the Income Tax Act. The assessee claimed that as per Article 10 of the India-Singapore Double Taxation Avoidance Agreement (DTAA), the beneficial tax rate should be 10%.
Held
The Tribunal held that the assessee's argument was correct based on the DTAA provisions and the Bombay High Court decision in Colorcon Asia Pvt. Ltd. Therefore, the assessee is eligible for the beneficial tax rate of 10% for tax withholding.
Key Issues
Whether the TDS on dividend paid to a foreign shareholder should be at the rate of 20.358% as per section 115-O of the Act or at the beneficial rate of 10% as per Article 10 of the India-Singapore DTAA.
Sections Cited
143(3), 115-O, 143(3A), 143(3B)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH, ‘A’: NEW DELHI
Before: MS. MADHUMITA ROY
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘A’: NEW DELHI BEFORE MS. MADHUMITA ROY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTNAT MEMBER
ITA No.8750/DEL/2025 [Assessment Year: 2018-19] Metlife Global Operations Deputy Commissioner of Income Support Centre Private Limited. Tax, Circle-16(1), Paharpur Business Centre, Vs C.R. Building, I.P. Estate, 21 Nehru Place, New Delhi-110002 New Delhi-1100019 PAN-AAFCM5000N Appellant Respondent Appellant/Assessee by Shri Rajan Vohra, Adv. & Shri Lekh Mehta, CA Respondent/Revenue by Shri Shrikant Namdeo, CIT-DR Date of Hearing 03.03.2026 Date of Pronouncement 09.03.2026
ORDER PER AMITABH SHUKLA, AM,
This appeal by the assessee is directed against the order of the National Faceless Appeal Centre/Ld. Commissioner of Income Tax(Appeals), New Delhi [hereinafter referred to as ‘ld. CIT(A)] dated 31.10.2025 arising out of assessment order dated 13.04.2021 passed under section 143(3) of the Income Tax Act, 1961, for the Assessment Year 2018-19. The word ‘Act’ herein this order would mean Income Tax Act, 1961.
ITA No.8750/Del/2025
The assessee has raised following grounds of appeal:-
Ground of Appeal No. 1: General: 1. has erred in upholding the actions of the learned Assessing Officer in not considering and allowing the Appellant's additional claim for refund of excess Dividend Distribution Tax (DDT) paid by it without providing any cogent reasons; Ground of Appeal Nos. 2 and 3: Maintainability of the Appellant's additional claim: 2. was not justified in upholding the order of the learned assessing officer which was passed without admitting and adjudicating the additional claim raised by the Appellant and passing a non- speaking order with respect to the aforesaid additional claim made by the Appellant; 3. has erred in holding that the Appellant's additional claim is not maintainable since the issue does not arise out of the impugned order under section 143(3) read with section 143(3A) read with section 143(3B) of the Act dated 13 April 2021 without appreciating that assessing authorities are entitled to admit additional claim/ ground and are bound to determine the correct tax liability of an assessee and therefore, ought to have appreciated that the additional claim is maintainable and ought to have been adjudicated upon; 4. has without prejudice to the above, failed to appreciate that since the CIT(A)'s jurisdiction is co-terminus with that of the assessing officer, the Appellant's additional claim ought to have been treated as made before the learned CIT(A) and therefore, should have been adjudicated upon; Ground of Appeal Nos. 5 and 6: Allowability of the Appellant's additional claim for refund of excess DDT - Rs. 25,85,47,626: 5. ought to have appreciated that dividend paid by the Appellant to its foreign shareholders (viz. MetLife Solutions Pte. Ltd., Singapore) is liable to tax as per the beneficial tax rate of 10% as per Article 10 of the India-Singapore DAA as against tax rate of 20.358% prescribed under section 115-O of the Act as has been affirmed the Hon'ble Bombay High Court decision in case of Colorcon Asia Pvt. Ltd. [Tax Appeal No. 5/2024 (Bombay HC)]
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ITA No.8750/Del/2025
and thereby ought to have allowed refund of dividend distribution tax in excess of the 10% tax rate to the Appellant; 6. without prejudice to the above, the Appellant prays to the Hon'ble Tribunal to admit its claim for refund of excess dividend distribution tax ("DDT) paid by it as has been affirmed the Hon’ble Bombay High Court decision in case of Colorcon Asia Pvt. Ltd. [Tax Appeal No. 5/2024 (Bombay HC)] and adjudicate upon the same; The above grounds of appeal are mutually exclusive and without prejudice to each other. The Appellant craves leave to add, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal. The Appellant prays for appropriate relief based on the said grounds of appeal and the facts and circumstances of the case. 3. We have heard rival submission in the light of material available on record. The principal issue seminal to the appeal of the assessee is regarding charging of TDS @ of 20.358% by the Revenue as against 10% claimed by the assessee. Briefly, the assessee has paid dividend to its foreign shareholder namely Metlife Solutions Pt. Ltd. Singapore. The ld. AO exposed the impugned overseas remittance of dividend to TDS @20.358% under section 115O. The ld. Counsel for the assessee submitted that as per Article-10 of India Singapore Double Taxations Avoidance Agreement (in short ‘DTAA’), it is entitled for levy of TDS @10%. It was submitted that as per contemporaneous provisions of the taxation statute and laws governing the matter, the provisions of DTAA- a sovereign commitment, shall prevail and beneficial tax rate of 10% shall be applicable for the tax withholding. The ld. Counsel placed heavy reliance upon the decision of Hon’ble Bombay High Court in the case of Colorcon Asia Pvt. Ltd. (Tax Appeal No.5 of 2024). Page 3 of 5
ITA No.8750/Del/2025
Per Contra, ld. DR placed reliance upon the order of lower authorities.
Upon consideration of the controversy, we have noted that the argument put forth by the assessee is correct when compared with the provisions of DTAA as well as the decision of Hon’ble Bombay High Court(supra). Accordingly, we are of the considered view that the assessee is exigible to the beneficial tax rate of 10% shall be applicable for the tax withholding. Accordingly, we set-aside the order of the lower authorities and direct the AO to charge TDS @10% on the impugned dividend paid by the assessee.
The appeal of the assessee is therefore, allowed.
Order pronounced in the open court on 09th March, 2026.
Sd/- Sd/- [MADHUMITA ROY] [AMITABH SHUKLA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 09.03.2026 Shekhar Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi,
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