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TMI Blog2004 (12) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... was proposed to charge income tax at the rate of 25% on dividends at gross amount of Rs. 5,49,975 as per the provisions of section 115A of the Income-tax Act, 1961. In reply, the assessee contended that he was entitled to deduction under section 80GGA out of dividend income received by it and tax at the rate of 25% was to be charged on the remaining net income. The said contention was not accepted by the Assessing Officer since the assessee was a foreign company as such governed by provisions of section 115A and also Board's Circular No. 202, dated 5-7-1996. Accordingly, he held that there was an obvious and apparent mistake inasmuch as income-tax at the rate of 25% has not been charged on gross dividends amounting to Rs. 5,49,975 received by the assessee foreign company. As regards the assessment year 1989-90, the facts are that :-- As against the income declared by the assessee to the extent of Rs. 26,70,343, the Assessing Officer vide intimation under section 143(1)(a), determined the same at Rs. 28,70,347. In computing the income under section 143(1)(a), the assessee was not allowed deduction under section 80GGA amounting to Rs. 2 lakhs in respect of donations paid to two ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ividend income of Rs. 14,83,674 and deduction claimed under section 35(1)(ii) was held to be not allowable. The facts for assessment year 1991-92 are that : The return of income was filed declaring a total income of Rs. 29,15,250. The Assessing Officer after issuing notice under section 143(2) observed that the assessee is a company registered in Sikkim under the Sikkim's Company Act and claimed to be a foreign company. Accordingly, the status of the assessee was accepted as a foreign company as in the earlier years. The Assessing Officer observed that in the year under consideration, the assessee had received income from dividend and interest as well as from capital gains from sale of shares. Taking note of the fact that the assessee had claimed deduction under section 80GGA on bonus paid to approved institutions amounting to Rs. 22,50,000, the Assessing Officer did not allow the claim of the assessee. He was of the view that the deduction under Chapter VI-A are not permissible to the assessee-company in view of the fact that it is a foreign company. As such, he held that the assessee was liable to be taxed at the rate of 25% on gross basis on account of dividends etc. as per se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g deductions under section 80GGA of the Act though the amendment in section 115A has been brought on the statute books with effect from assessment year 1995-96. Assessment years 1990-91 & 1991-92 : (i )Charge of flat rate of tax of 25% under section 115A of the Act without granting deductions under section 80GGA of the Act though the amendment in section 115A has been brought on the statute books with effect from assessment year 1995-96. (ii)Without prejudice, non-granting of deductions under section 80GGA of the Act on interest income and long term capital gains for assessment year 1991-92." 7. The Learned Counsel for the assessee has pointed that the Tribunal vide its order dated 25-4-2003 has held that the amendment of section 115A by Finance Act, 1994 w.e.f. 1-4-1995 has held it as clarificatory in nature and as such the said amendment would apply to the earlier assessment years. He pointed out that by the clause 32 of the Finance Act, 1994, the following amendments were made in section 115A of the Act w.e.f. 1-4-1995 :-- (a)The rate of tax on dividend received by foreign company was reduced from 25% to 20%. (b)No deduction was to be allowed to foreign company in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s order in para 31 only decided that deductions under Chapter VIA are not available against Dividend income. The Tribunal did not decide, nor gave any directions, whether deductions under Chapter VIA, should be given against interest income, and long term capital gains of the assessee, and thus did not deal with the above ground of the assessee. 11. Thus, while dismissing the appeal of the assessee for the assessment year 1990-91 and 1991-92, the tribunal has completely ignored and overlooked to consider and to deal with the aforesaid ground raised in the appeal for the assessment year 1991-92. The said omission on the part of the Tribunal was mistake apparent from records, which needs to be rectified. Thus he has urged that's in view of the above noted three apparent mistakes, the entire order be recalled and the matter may be adjudicated afresh. 12. On the other hand, the Learned DR has vehemently opposed the Miscellaneous Application stating that the Tribunal has examined and also discussed each and every issue raised by the assessee elaborately. He has further submitted that the Miscellaneous Application is misconceived inasmuch as no alleged mistake could be said to be appar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d or debt incurred by Government or the Indian concern in foreign currency, or (iii) income received in respect of units, purchased in foreign currency, of a Mutual Fund specified under clause (23D) of section 10 or of the Unit Trust of India, shall be taxed at the rate of twenty per cent. 16. Prior to this amendment, section 115A of the Income-tax Act, 1961 provided for the taxing of the aforesaid item of income, except in respect of units of the Unit Trust of India, at the rate of 25% in the case of foreign company. Thus, since the amendment to section 115A by Finance Act, 1994 has been held to be one clarificatory in nature, the natural consequence would be to tax aforesaid item of income at the rate of 20% and not 25% in the case of foreign company. It is seen that the Tribunal while holding that the amendment to section in 15A by Finance Act, 1994 is a clarificatory in nature, has not passed any order or direction regarding the rate of charging of tax. It is ordered that since the amended provision would apply to the earlier assessment year the rate as prescribed in the amended provision, may be made applicable to the earlier assessment year under consideration. 17. As regar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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