9911796707
TMI Blog2021 (10) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner is a Company incorporated in Cyprus on 17th December 2008 as a Private Limited Liability Company under the Cyprus Company Law, CAP-113. B) Petitioner filed its return of income for the assessment year 2015-16 on 30th September 2015, declaring total income at Rs. 28,35,66,580/-. The income of petitioner, inter-alia, consisted of the interest income earned by petitioner by subscribing to interest bearing securities from Indian entities. Petitioner had offered the said interest income at the rate of 10% as per Article 11 of the India-Cyprus Double Taxation Avoidance Agreement ('DTAA'). For the year under consideration, tax of Rs. 8,50,69,973/- was deducted by the payer and was claimed as credit on the income so offered to tax by petitioner. As per petitioner, the total tax liability was Rs. 2,83,56,658/- for the assessment year 2015-16. Petitioner had claimed a refund of Rs. 5,67,13,320. C) Respondent No. 2 passed the assessment order dated 6th February 2018 under section 143(3) read with section 144C (13) of the Act read with rectification order dated 30 March 2018 under section 154 of the Act for the assessment year 2015-16, holding that petitioner is not entitled to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to be paid by Petitioner. No reason has been given in the said form for taking the said stand by Respondent No. 1, except stating as under in the remarks column of Form No. 3. "Refund claimed in the return is Rs. 56713320 whereas refund released including 244A is Rs. 28006730, hence refund reduced is Rs. 28706590. The same has been considered and allowed in form 3." 3. Shri. Vyas submitted that as per the explanation to Section 7(a) of VSV Act where the amount paid before filing the declaration under Section 4 exceeds the disputed tax, the same shall be refunded but the assessee will not be entitled to any interest under Section 244A of the Act. According to Shri Vyas, on a combined reading of Section 3 and Section 7 of the VSV Act, the assessee is not entitled to any interest under Section 244A and therefore, the amount of interest which was paid on the undisputed component as per the revised assessment order dated 30th March 2018 is to be returned to respondent. 4. Shri Vyas further submitted that if the interest was allowed to be repaid by petitioner, it would amount to discrimination between assessees who have been granted interest under Section 244A and other assessees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 42,72,210/- was also paid. Petitioner therefore, got refund of a net amount of Rs. 2,80,06,730/-. According to petitioner, as the department had wrongly charged to tax at sum of Rs. 3,29,78,793/- (Rs. 6,13,35,450/- Less Rs. 2,83,56,658/-), petitioner filed an appeal before the CIT(A) on 5th March 2018 under reference No. 423991101050318 which was pending. 8. The VSV Act was enacted to provide for resolution of disputed tax and for matters connected therewith or incidental thereto. The Government of India wanted to reduce the litigations pending and decided to resolve all disputed tax matters. When the VSV scheme was enacted, petitioner decided to take benefit of the scheme under the Act and filed a declaration and undertaking in Form No. 1 under the VSV Act read with relevant rules whereby petitioner decided to settle the appeal by paying the disputed tax of Rs. 3,29,78,793/-. When we say decided to pay, it does not mean that petitioner had to pay that additional amount, but this amount was already paid to the Government by way of TDS deducted and petitioner was seeking a refund. Petitioner decided to forego that refund claim of Rs. 3,29,78,793/-. After considering petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vied on such disputed tax. amount of the disputed tax. the aggregate of the amount of disputed tax and ten per cent. of disputed tax: provided that where the ten per cent. of disputed tax exceeds the aggregate amount of interest chargeable or charged on such disputed tax and penalty leviable or levied on such disputed tax, the excess shall be ignored for the purpose of computation of amount payable under this Act. ..... 7. Any amount paid in pursuance of a declaration made under section 4 shall not be refundable under any circumstances Explanation.-For the removal of doubts, it is hereby clarified that where the declarant had, before filing the declaration under sub-section (1) of section 4, paid any amount under the Income-tax Act in respect of his tax arrear which exceeds the amount payable under section 3, he shall be entitled to a refund of such excess amount, but shall not be entitled to interest on such excess amount under section 244A of the Income-tax Act." 10. Under the VSV Act, Section 3(a) provides that where a declarant files a declaration to the designated authority in accordance with the provisions of Section 4 in respect of 'tax arrear', the amount payable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally used is any amount paid "in respect of" tax arrear. The term "tax arrear", is defined to mean aggregate amount of disputed tax and the term "disputed tax" is defined to mean the tax payable by petitioner as if the appeal is decided against petitioner. So, the explanation only refers to the amount paid in respect of tax arrear which is refunded under the VSV Act and not any other refund amount. This implies that the reference in which the restriction of interest under section 244A of the Act is made is towards any excess payment of tax in respect of the tax arrears which is the disputed tax. Therefore, the VSV Act clearly envisages that no interest under section 244A of the Act is payable on the amount of tax paid towards the disputed tax which is in excess of the amount determined payable as per Section 3 of the VSV Act. The amount payable towards disputed tax will only arise post the assessment order is passed. In the case at hand, petitioner has not made any payment post the assessment order, in fact, respondent no.2 has determined a refund to petitioner in the revised assessment order after adjusting all the disputed tax. The refund determined by respondent no.2 in the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
