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Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: SHRI G.S. PANNU & SHRI JOGINDER SINGH
The captioned appeal by the Revenue is directed against the order of the CIT(A)-2, Mumbai dated 19/04/2013, pertaining to the Assessment Year 2010-11, which in turn has arisen from the order passed by the Assessing Officer dated 04/02/2013 under section 143(3) of the Income Tax Act, 1961 (in short „the Act‟).
In this appeal, the Revenue has raised the following Grounds of appeal :
2 M/s. LIC Nomura Mutual Fund AMC “1. On the facts and in the circumstances of the case and in law, the CIT(A) erred in entertaining and adjudicating the issue of dividend distribution tax as neither the assessing officer has any power to pass an order nor such an order has been passed against which appeal could have been preferred.
2. On the facts and circumstances of the case and in law, the CIT(A) also erred in not appreciating that u/s 115Q assessing officer has the power to deem an assessee in default for non-payment of dividend distribution tax and thereby issuing notice of demand.”
Substantively speaking, the only issue in this appeal relates to the determination of tax on dividend distributed by the assessee-company in terms of Sec. 115O of the Act. In brief, the relevant facts are that the respondent-assessee is a company incorporated under the provisions of the Companies Act, 1956 and is an asset management company providing services to LIC Mutual Fund. For the assessment year under consideration, it filed a return of income declaring a total income of Rs.111,52,05,892/- which was subject to scrutiny assessment. In the assessment finalized u/s 143(3) of the Act dated 04.02.2013, the total income was assessed at Rs.112,77,86,712/- after making certain additions/disallowances which are not the subject matter of controversy before us. For our purpose, the relevant fact is that in the return of income filed, the assessee-company reflected the amount of dividend distributed at Rs. 75 crores instead of the correct amount of Rs. 7.5 crores. On account of such a mistake in the return of income, the Assessing Officer in the Income Tax Computation Form (i.e. ITNS 150) annexed to the assessment order, determined the tax on dividend distribution in terms of Sec. 115O of the Act at Rs.13,43,45,475/- as against the correct liability of Rs.1,27,46,250/-. The additional tax
3 M/s. LIC Nomura Mutual Fund AMC liability determined by the Assessing Officer was carried in appeal before the CIT(A).
The CIT(A) considering the fact-position brought out by the assessee concluded that it was only on account of a clerical mistake that the dividend paid was mentioned in the return of income at Rs. 75 crores instead of the correct figure of Rs. 7.5 crores. He, therefore, concluded that the dividend distributed by the assessee-company liable for tax determination u/s. 115O of the Act was to be taken as Rs. 7.5 crores and not Rs. 75 crores. Against such a decision of the CIT(A), the Revenue is in appeal before us.
At the time of hearing, the ld. DR appearing for the Revenue has not pointed out any cogent material or reasoning which would require us to interfere with the finding of the CIT(A) that the actual dividend distributed by the assessee-company was only Rs. 7.5 crores and not Rs.75 crores. It is also emerging from a reading of the order of the CIT(A), especially paras 3.7 to 3.9, that the finding of the CIT(A) is based on the undisputed material brought out by the assessee. Thus, on this aspect of the matter we find no reason to interfere with the order of the CIT(A).
However, in order to impart completeness to this order, we may now address the specific point manifested in the aforestated Grounds of appeal raised by the Revenue. The point of the Revenue raised in Ground of appeal no. 1 is to the effect that the CIT(A) could not have entertained and adjudicated the grievance of the assessee on wrong determination of tax liability of dividend distributed u/s. 115O of the Act
4 M/s. LIC Nomura Mutual Fund AMC as the Assessing Officer has not passed such an order. In other words, as per the Revenue the Assessing Officer has no power to pass an order and nor such an order has been passed in the present case.
In our considered opinion, the aforestated plea of the Revenue is misconceived, both on facts and in law. Ostensibly, at pages 78 and 79 of the Paper Book is placed a copy of Income Tax Computation Form (i.e. ITNS 150) which is annexed to the assessment order u/s. 143(3) and is signed by the Assessing Officer. The said Income Tax Computation Form clearly enumerates the tax liability on the profits distributed by the assessee-company. Moreover, as correctly brought out by the learned representative for the assessee, the judgement of the Hon'ble Supreme Court in the case of Kalyankumar Ray v. CIT, 191 ITR 634 (SC) clearly postulates that the Income Tax Computation Form which is signed by the Assessing Officer is also to be understood as an „order‟ in writing passed by the Assessing Officer determining the tax liability within the meaning of Sec. 143(3) of the Act. Considered in this light, in our view, the CIT(A) was quite justified in adjudicating the impugned plea of the assessee whereby the assessee had sought to deny his liability on the amount of tax determined by the Assessing Officer under Sec. 115O of the Act in the Income Tax Computation Form annexed to the assessment order. Thus, on this aspect we find no reason to uphold the plea of the Revenue.
In fact, a reading of the Ground of appeal no. 2 shows that the Revenue accepts the position that the Assessing Officer has the power to deem an assessee in default for non-payment of dividend distribution tax and thereby issuing a notice of demand. In our considered opinion the 5 M/s. LIC Nomura Mutual Fund AMC Ground of appeal raised by the Revenue is contrary to understanding sought to be conveyed in Ground no. 1 and, thus having regard to the facts and circumstances of the case and also the position in law, the Ground of appeal no. 2 is misplaced. The same is hereby dismissed.
Accordingly, the appeal of the Revenue is dismissed.
Order pronounced in the open court on 24th February, 2016.