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2023 (9) TMI 1218 - AT - Income TaxRevision u/s 263 by CIT - payment of Dividend Distribution Tax - CIT has held that dividend was declared as per Section 115O 115P of the Act but the assessee failed to deposit such tax and interest has not been demanded/quantified in the assessment order and omission to do so resulted in non-levy of Dividend Distribution Tax on the total amount of dividend declared - HELD THAT - Even though the assessee has claimed that all the details have been filed before the AO which as per ld. Pr. CIT has not been considered but even otherwise when these details were filed before ld. Pr. CIT, he ought to have considered the same and drop the revisionary proceedings. Therefore, since the issue raised by ld. Pr. CIT relates to payment of Dividend Distribution Tax for AY 2017-18 which as per ld. Pr. CIT ought to have been deposited subsequent to the completion of financial year, we under the given facts and circumstances of the case notice that the assessee has deposited the Dividend Distribution Tax before the close of FY 2016-17 relevant to AY 2017-18 and therefore, the accounting treatment and the details of Dividend Distribution Tax were duly incorporated in the return for AY 2017-18 filed on 31.10.2017 and therefore, ld. Pr. CIT erred in raising the alleged issue in the show cause notice u/s 263 of the Act for AY 2018-19. Appeal of assessee allowed.
Issues Involved:
The issues involved in this case are the validity of the order passed under section 263 of the Income Tax Act, 1961, relating to non-payment of Dividend Distribution Tax, and the assessment order framed under sections 143(3), 143(3A), and 143(3B) of the Act. Issue 1: Validity of Order under Section 263: The appeal filed by the assessee challenges the order passed under section 263 of the Income Tax Act, 1961, by the Principal Commissioner of Income Tax (Pr. CIT). The assessee contends that the order is bad in law and should be quashed. The Pr. CIT initiated proceedings under section 263, deeming the assessment order under section 143(3) as erroneous and prejudicial to the revenue due to non-payment of Dividend Distribution Tax. Details: The Pr. CIT observed discrepancies in the assessment records regarding the non-payment of Dividend Distribution Tax for the financial years 2016-17 and 2017-18. The Pr. CIT held that the assessing officer failed to quantify and demand the Dividend Distribution Tax and interest, resulting in an erroneous assessment order. Issue 2: Non-Payment of Dividend Distribution Tax: The core issue pertains to the non-payment of Dividend Distribution Tax by the assessee for the relevant financial years. The Pr. CIT found that the assessee had not paid the required Dividend Distribution Tax and interest, leading to the revisionary proceedings under section 263. Details: The Pr. CIT noted that the Dividend Distribution Tax for the financial year 2016-17 was duly paid by the assessee, as evidenced by the details provided in the audited financial statements and tax audit report. The Pr. CIT erred in raising the issue of non-payment of Dividend Distribution Tax for the assessment year 2018-19 when the tax had been paid before the close of the financial year 2016-17. Conclusion: After considering the submissions and evidence presented, the Appellate Tribunal quashed the order passed under section 263 of the Act and restored the original assessment order. The Tribunal found that the assessee had duly paid the Dividend Distribution Tax for the relevant year, and thus, allowed the appeal filed by the assessee.
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