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TMI Blog2016 (5) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... are the dividend. It is not in dispute that dividend tax, under section 115P of the Act, was paid by the assessee well within 14 days of declaration of dividend by the shareholders in the annual general meeting. The contention of the Revenue that a provision for payment of dividend, in the balance-sheet of the assessee, would itself amount to declaration of dividend does not merit acceptance, as provision for payment of dividend does not automatically result in payment of dividend. It is only after the board of directors decide to recommend dividend, and the shareholders in the general meeting approve the recommendation of the board of directors, can dividend be held to have been declared. We find no error in the orders of the Tribunal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dividend tax was paid within 14 days of the said declaration. The Assessing Officer levied interest of ₹ 1,33,98,180 and ₹ 3,82,15,542 treating the provision for payment of dividend as declaration of final dividend. On the ground that tax ought to have been remitted by 14th April (within 14 days of making the provision), and as tax was paid within 14 days of the declaration of dividend by the shareholders in the annual general meeting, interest was levied on belated payment of dividend tax. Aggrieved thereby, the assessee carried the matter in appeals before the Commissioner of Income-tax (Appeals). 3. Before the Commissioner, the assessee contended that, under the Act, the board of directors had the power to recommend divide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of declaration of dividend is when it is actually declared by the board; and from the material on record it was clear that dividend was declared for the assessment year 2003-04 on September 24, 2003, and tax was paid on October 3, 2003 which was within the time limit prescribed under section 115-P of the Act. In I. T. A. No. 293 of 2013, the Tribunal followed its earlier order in I. T. A. No. 1774 of 2011 and held in favour of the assessee. 6. Section 173 of the Companies Act requires an explanatory statement to be annexed to notice except, among others, declaration of dividend. Section 217 of the Companies Act, 1956 relates to the report of the board of directors. Section 217(1)(c) stipulates that there shall be attached to every balanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee well within 14 days of declaration of dividend by the shareholders in the annual general meeting. 7. The contention of the Revenue that a provision for payment of dividend, in the balance-sheet of the assessee, would itself amount to declaration of dividend does not merit acceptance, as provision for payment of dividend does not automatically result in payment of dividend. It is only after the board of directors decide to recommend dividend, and the shareholders in the general meeting approve the recommendation of the board of directors, can dividend be held to have been declared. We find no error in the orders of the Tribunal, much less a substantial question of law, necessitating interference under section 260A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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