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2022 (6) TMI 1071 - AT - Income TaxCredit of Dividend Distribution Tax (DDT) u/s. 115-O - assessee has been denied credit of DDT deposited within time only on account of a technical default committed at the time of filing of challan, wherein a wrong column was tick marked by the assessee inadvertently - HELD THAT - The Delhi High Court in the case of Court On Its Own Motion 2013 (3) TMI 316 - DELHI HIGH COURT issued seven mandamus in response to a Public Interest Litigation regarding difficulties faced by assessees after computerisation and central processing of income tax returns. One of the seven mandamus is in relation to credit of TDS to an assessee when tax deducted has been deposited with revenue but incorrect particulars have been uploaded by deductor. As in the instant case, the assessee has deducted and deposited DDT within time, but due to an inadvertent mistake in filing the challan, the assessee has been denied credit of DDT. The assessee has filed several applications under section 154 of the Act with the CPC, but the same have been rejected citing technical reasons. The appeal of the assessee was also dismissed on the ground that the assessee did not take up necessary follow-up action. In our view, the assessee has already approached the CPC thrice and also approached Ld. CIT(Appeals) for redressal of its grievance and there is no denial that the assessee has paid and deposited DDT within the due date. It is a fit case where the assessee should be granted necessary credit of DDT paid. Accordingly, the revenue is directed to grant credit of DDT to the assessee by giving necessary directions to the jurisdictional assessing Officer to correct the data uploaded to the OLTAS database and grant credit of DDT to the assessee. - Decided in favour of assessee.
Issues Involved:
1. Denial of credit for Dividend Distribution Tax (DDT) of Rs. 3,88,761/- 2. Levying of interest under Section 115P amounting to Rs. 1,24,404/- 3. Delay in filing the appeal by 671 days Issue-wise Detailed Analysis: 1. Denial of Credit for Dividend Distribution Tax (DDT) of Rs. 3,88,761/-: The assessee, a Private Limited Company, declared a dividend of Rs. 22,87,500/- and paid DDT of Rs. 3,88,761/- as per Section 115-O of the Income Tax Act, 1961. However, the credit for this DDT was not granted by the Assessing Officer (CPC) due to an inadvertent error where the wrong tax code was ticked on the challan. The code marked was "(107) Tax On Distributed Income To Unit Holders" instead of "(106) Tax On Distributed Profits Of Domestic Companies." This mistake led to the denial of DDT credit and the raising of a demand for DDT along with interest under Section 115P. The assessee filed multiple rectification applications under Section 154, but the applications were rejected by the CPC, advising the assessee to get the data corrected by the bank/jurisdictional assessing officer. The CIT(Appeals) also dismissed the appeal on similar grounds, stating that the assessee did not take the necessary steps to rectify the data as advised by the CPC. 2. Levying of Interest under Section 115P Amounting to Rs. 1,24,404/-: Due to the non-granting of DDT credit, interest under Section 115P amounting to Rs. 1,24,404/- was levied. The assessee contested this interest, arguing that the DDT was paid on time and the denial of credit was due to a technical error in the challan. 3. Delay in Filing the Appeal by 671 Days: The appeal was filed 671 days late. The delay was attributed to the assessee continuously following alternate remedies, including filing rectification applications with the CPC and waiting for responses. The Supreme Court's judgments in Collector, Land Acquisition v. Mst. Katiji and N. Balakrishnan v. M. Krishnamurthy were cited, emphasizing that the expression 'sufficient cause' in the Limitation Act should be interpreted liberally to serve the ends of justice. The Tribunal condoned the delay, recognizing that the assessee had a good case on merits and that justice should not be denied due to technical delays. Judgment: The Tribunal acknowledged that the assessee had indeed paid the DDT within the stipulated time and that the denial of credit was due to a technical mistake in the challan. The Tribunal referred to the Delhi High Court's ruling in Court On Its Own Motion v. Ld. CIT(Appeals), which highlighted the difficulties faced by taxpayers due to technical errors and the responsibility of the Revenue to assist in such cases. The Tribunal directed the Revenue to grant the necessary credit for the DDT paid by the assessee. It instructed the jurisdictional assessing officer to correct the data in the OLTAS database and ensure that the credit for DDT is granted to the assessee. Conclusion: The appeal was allowed, and the Tribunal ordered the Revenue to grant the DDT credit to the assessee, thereby resolving the issues of DDT denial and the associated interest levy. The delay in filing the appeal was condoned in the interest of substantial justice.
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