2020 (8) TMI 116 - AT - Income Tax

Rectification of mistake u/s 254 - Credit of DDT Dividend Distribution Tax against its tax liability on the total income - short/deficit credit of DDT u/s 115-O and interest u/s 115-P - declining on the part of the Tribunal to address the grievance of the assessee, for the reason, that the same did not emanate from the impugned order - HELD THAT - Hon ble Apex Court in the case of Genpact India (P). Ltd. Vs. Dy. CIT 2019 (11) TMI 1118 - SUPREME COURT it can safely be concluded that an assessee remains well within his right to assail by way of an appeal the quantification of tax and interest liability raised by the revenue against it u/ss. 115-O and 115-P of the Act. In the backdrop of our aforesaid observations, we are of the considered view that the declining on the part of the Tribunal to address the grievance of the assessee as regards the raising of the demand u/ss. 115-O (tax) and 115-P (interest) by observing that the issue as regards quantification of DDT did not arise from the order passed by the CIT(A), is not found to be in conformity with the settled position of law laid down by the Hon ble Apex court in the afore mentioned judgments. Hon ble Apex Court in the case of ACIT Vs. Saurashtra Kuth Stock Exchange Ltd. 2008 (9) TMI 11 - SUPREME COURT wherein it was observed that a non-consideration by the Tribunal of a judgment of the jurisdictional High Court or the Hon ble Supreme Court, though not brought to the notice of the Tribunal at the time of hearing of the appeal would constitute a mistake apparent from record which could be rectified under Sec. 254(2). Accordingly, on the basis of our aforesaid observations, the order passed by the Tribunal while disposing off the appeal of the assessee is rectified. We herein restore the matter to the file of the A.O, who is herein directed to verify the claim of the assessee that though it had deposited DDT of ₹ 33,21,750/- u/s 115-O of the Act, vide a challan dated 17.05.2010 (as per Form 26AS ), however, credit has been allowed only to the extent of ₹ 32,44,500/-. Resultantly, the impugned demand towards such short/deficit credit of DDT of ₹ 77,250/- u/s 115-O and interest u/s 115-P of ₹ 4,69,975/- had been raised by the revenue. Miscellaneous application filed by the assessee is allowed.

Summary

Issues:
Rectification of order passed by the Tribunal regarding quantification of Dividend Distribution Tax (DDT) and interest liability under sections 115-O and 115-P of the Income Tax Act.

Analysis:
The case involved a miscellaneous application by the assessee company challenging the order passed by the Tribunal in an appeal against the CIT(A)'s decision for Assessment Year 2011-12. The assessee claimed that there was a mistake in the order related to the quantification of DDT and interest liability. The Tribunal initially dismissed the appeal stating that the issue of DDT did not arise from the CIT(A)'s order. However, the authorized representative argued that the computation of tax and interest liability should be considered part of the assessment order, citing relevant Supreme Court judgments like Kalyankumar Ray Vs. CIT and CIT, Delhi Vs. Bhagat Construction Co. The AR contended that the assessee had the right to challenge the quantification of tax and interest liability under sections 115-O and 115-P, referring to the case of Genpact India (P) Ltd. Vs. Dy. CIT.

The Departmental Representative objected to the application for rectification, but the Tribunal, after considering the arguments, found merit in the contentions raised by the authorized representative. The Tribunal referred to the Supreme Court judgments cited and concluded that the quantification of tax and interest liability, even if done on a separate sheet of paper, forms part of the assessment order. The Tribunal also highlighted the importance of considering judgments of the jurisdictional High Court or the Supreme Court, even if not raised during the appeal hearing. Therefore, the Tribunal rectified its order and directed the Assessing Officer to verify the assessee's claim regarding the DDT deposit and credit allowed, instructing to vacate the demand if the claim is found valid.

In conclusion, the Tribunal allowed the miscellaneous application filed by the assessee, rectified the order, and restored the matter to the Assessing Officer for further verification and necessary actions based on the directions provided in the judgment.