2018 (10) TMI 1802 - HC - Income Tax

Revision u/s 263 - tax credit deemed to be paid in Oman - HELD THAT - The contention of the Revenue that there was material change in view of the reduction of tax rate applicable to the respondent-assessee in Oman is inconsequential and misconceived. The assessing officer in his original order dated 27.03.2014 for the present year had allowed and given rebate of tax paid in Oman at the rate of 12% and not at the rate of 30%. Accordingly, the respondent-assessee was given tax credit of ₹ 17,37,09,837/- out of the total dividend paid in Oman of ₹ 144,75,81,978/-. Thus, the assessing officer had taken notice of the reduction of rate of tax and tax credit was only given for the tax paid in Oman. Change in tax rates/slab, therefore, would not make any difference; nor would it negate the ratio of the decision dated 02.08.2017 passed by the Division Bench of this Court 2017 (8) TMI 422 - DELHI HIGH COURT pertaining to the assessment year 2010-11. The ratio of the order would accordingly apply. No substantial question of law

Summary

Issues:
1. Delay in re-filing the appeal.
2. Quashing of the order under Section 263 of the Income Tax Act, 1961 for the assessment year 2011-12.
3. Comparison with a similar order for the assessment year 2010-11.
4. Application of the decision in ITA No. 597/2017 for the assessment year 2010-11 to the present appeal.
5. Impact of the reduction in tax rate applicable to the respondent-assessee in Oman on the assessment.

Issue 1: Delay in re-filing the appeal
The application seeking condonation of 26 days delay in re-filing the appeal was allowed as the respondent-assessee did not oppose it.

Issue 2: Quashing of the order under Section 263 for the assessment year 2011-12
The appeal by the Revenue under Section 260A of the Income Tax Act, 1961, related to the quashing of the order dated 09.08.2016 passed by the Principal Commissioner under Section 263 for the assessment year 2011-12. The Tribunal had quashed this order, leading to the appeal.

Issue 3: Comparison with a similar order for the assessment year 2010-11
The Revenue accepted that a similar order passed by the Principal Commissioner for the assessment year 2010-11 was quashed by the Tribunal. However, the Revenue argued that the facts for the assessment year 2010-11 were distinguishable, especially due to a reduction in tax slabs/rate paid by the respondent-assessee in Oman.

Issue 4: Application of the decision in ITA No. 597/2017 for the assessment year 2010-11
The order under Section 263 for the assessment year 2011-12 referred to the earlier order for the assessment year 2010-11, which had been quashed by the Tribunal. The Court held that the decision in ITA No. 597/2017 for the assessment year 2010-11 applied equally to the present appeal for consistency.

Issue 5: Impact of the reduction in tax rate applicable to the respondent-assessee in Oman
The Revenue argued that the reduction in the tax rate in Oman was a material change. However, the Court found this argument inconsequential as the assessing officer had already considered this change in the original order for the present year. The reduction in tax rate did not affect the tax credit given to the respondent-assessee. The Court dismissed the appeal, stating that no substantial question of law arose for consideration.

In conclusion, the High Court dismissed the appeal by the Revenue, emphasizing that the reduction in tax rate in Oman did not impact the tax credit given to the respondent-assessee. The Court applied the decision from a similar case for the assessment year 2010-11 to maintain consistency. The appeal was dismissed with no order as to costs.