IT: Where assessee's appeal against scrutiny assessment for claiming refund, was rejected only because its rectification application against section 143(1) had previously been rejected, matter was to be remitted back
■■■
[2013] 37 taxmann.com 231 (Delhi - Trib.)
IN THE ITAT DELHI BENCH 'B'
Siel Ltd.
v.
Assistant Commissioner of Income-tax, Circle -8(1)*
U.B.S. BEDI, JUDICIAL MEMBER
AND T.S. KAPOOR, ACCOUNTANT MEMBER
AND T.S. KAPOOR, ACCOUNTANT MEMBER
IT APPEAL NO. 5601 (DELHI) OF 2004
[ASSESSMENT YEAR 1999-2000]
[ASSESSMENT YEAR 1999-2000]
JULY 12, 2013
Section 237, read with sections 143 and 154, of the Income-tax Act, 1961 - Refunds - General [Claim of] - Assessment year 1999-2000 - Whether, where assessee's appeal against assessment order passed under section 143(3), for claiming refund, was rejected only on ground that its claim of refund had already been rejected in rectification application filed against assessment made under section 143(1), matter was to be remitted in interest of justice - Held, yes [Para 11] [In favour of assessee]
Ms. Shumana Sen for the Appellant. Taramdeep Singh for the Respondent.
ORDER
T.S. Kapoor, Accountant Member - This is an appeal filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-XI, New Delhi dated 25.10.2004 for the assessment year 1999-2000. The grounds taken by the assessee are as under:
| "1. | That on the facts and circumstances of the case and in law the Ld. CIT (A) erred in upholding the order of the Assessing Officer and denying the assessee the credit of tax of Rs.51,30,814/- being Advance Corporation Tax, paid in United Kingdom on dividend paid to the assessee by UK companies. | |
| 2. | That the Ld. CIT (A) having accepted that the assessee had claimed refund of Advance Corporation Tax paid in United Kingdom, ought to have directed the Assessing Officer to refund/ allow its credit to the assessee in accordance with the provisions of law and DTAA between India and United Kingdom. | |
| 3. | That the Ld. CIT (A) failed to understand the provisions of DTAA between India and United Kingdom and the manner of allowing credit to the assessee, of Advance Corporation Tax paid in the United Kingdom. | |
| 4. | That the Ld. CIT (A) erred in observing that the reasons for denial of credit by the Assessing Officer have not been rebutted. | |
| 5. | That the Ld. CIT (A) failed to appreciate the submissions made before him during appellate proceedings. | |
| 6. | That the Ld. CIT (A) erred in totally ignoring the decision of the Hon'ble Supreme Court in CIT vs. Clive Insurance Co. Ltd. (1973) 113 ITR 636 (SC) and Circular No. 369 dated 17.09.1983 issued by the CBDT, relied upon by the assessee during appellate proceedings. | |
| 7. | Without prejudice to the above grounds of appeal and in the alternative, the Ld. Commissioner of Income Tax (appeals) ought to have directed the Assessing Officer to tax the net amount of dividend received, in case credit for Advance Corporation Tax was not available to the assessee. |
The appellant craves leave to add, alter, delete or vary from all or any ground of appeal before or at the time of hearing."
2. The brief facts of the case are that, the assessee company filed its return of income declaring loss of Rs.8,98,24,599/- and claiming refund of Rs.1,03,37,677/- on 30.12.1999. While passing order u/s 143(1) (a) of Income Tax Act, the Assessing Officer observed that TDS certificates amounting to Rs.51,47,732/- were defective and hence credit for the same was not given. Against the said order u/s 143(1) (a), the assessee filed rectification application on 05.06.2000 for claiming credit of TDS amounting to Rs.51,47,732/-. The application of the assessee was rejected viderectification order dated 4th August, 2000. The assessee then filed appeal before CIT (A) against order u/s 154 and Ld. CIT (A) dismissed the appeal of the assessee vide order no.375/99-2000 dated 27.02.2003.
3. The assessee again revived the issue by filing an appeal before CIT (A) against assessment order passed u/s 143(3) and Ld. CIT (A) vide order dated 28.03.2003 directed the Assessing Officer to look into the matter and give appropriate relief to the assessee after allowing adequate opportunity to the assessee, notwithstanding the fact that the CIT (A) had already rejected the assessee's plea on the same issue. However, the Assessing Officer then videorder dated 15.01.2004 again rejected the claim of the assessee by holding as under:
| "(a) | That the credit for which the assessee is claiming credit was in the form of certificate only and no credits had actually been made to the coffers of the Govt. of the United Kingdom as is clear from the certificate provided by the company secretary of the Overseas Company. | |
| (b) | The said amount was taxable in India as per Article 11[1(2)] of the DTAA. The said amount has not been credited to the account of Indian Government also as is required as per the provisions of section 200 of the I. T. Act, 1961. | |
| (c) | The amount as per Article 11[1(2)] of the DTAA may be taxed in the United Kingdom also. Seeing (b) and (c) together there is no infirmity in the fact that the same was taxable in India and that as per provisions of taxability in the United Kingdom the assessee has not been taxed there and that since the taxes have not been credited to the account of the Govt. of India credit for the same cannot be given in accordance with the provisions of section 200 of the I. T. Act, 1961. | |
| (d) | That the assessee in terms of the provisions of Article 11[1(2)] the assessee had the opinion of claiming credit for the advance corporation tax to the extent the credit exceeded his liability to the United Kingdom tax. The assessee has not furnished any proof that it had claimed credit for the same in the United Kingdom or not. | |
| (e) | As per the provisions of Article 2 of the DTAA the advance corporation tax does not feature in the list of taxes which were subject of the convention and hence the agreement. |
Going by the above as also the fact that the same issue had been dealt by the Assessing Officer earlier also wherein the assessee's plea for giving credit for advance corporation tax credit in the United Kingdom was rejected through an order which was subsequently confirmed by the CIT (A), I find no force in the assessee's plea and the request of the assessee fails to that extent."
4. Against this order, the assessee again went into appeal and Ld. CIT (A) vide order dated 25.10.2004 upheld the order of Assessing Officer by holding as under:
"Ground Nos.1 to 6
All the grounds of appeal are directed against the decision of the Assessing Officer in not allowing credit of Rs.51,30,814/- being the Advance Corporation Tax paid in U.K which had been claimed as refund due. The Assessing Officer has given detailed reasons for rejecting the claim of appellant assessee. The written submissions filed by the appellant have been considered and it is noticed that the submissions of the appellant are general and not specific. The appellant must rebut each and every point raised by the Assessing Officer to substantiate its claim for allowing credit of alleged Advance Corporation Tax. The onus to prove that the claim made- as per provisions of law- is on the person who makes the claim. In the instant case, the appellant had failed to justify its claim not only before the Assessing Officer but also during the course of appellate proceedings when it failed to rebut the specific reasons discussed by the Assessing Officer.
Further, as a matter of fact, this issue has already been adjudicated upon by my predecessor vide his order dated 27.02.2003 in Appeal No.375/99-00 filed by the appellant against order u/s 154 read with section 143(1) (a) of the Income Tax Act 1961. The same issue cannot be taken up again for fresh decision. Accordingly, the appeal filed by the assessee is dismissed."
5. Aggrieved, the assessee filed appeal before ITAT and ITAT vide its order dated 06.03.2009 dismissed the appeal of assessee. The assessee filed appeal before Hon'ble Delhi High Court which vide order dated 19th November, 2009 remitted the file back to Tribunal for the following directions:
"Without commenting upon the aspect dealt with by the Tribunal, we would like the Tribunal to deal with this aspect in further details and take the observations made in para 22 in its logical way. In spite of what is stated in para 20, the appellant was not entitled to the refund under Article 24 of the DTAA of the Act, no reasons for that aspect is forthcoming. For this reason alone, we remit the case back to the Tribunal to decide this aspect conclusively giving its reason."
6. In view of the above, Hon'ble High Court's directions the parties appeared before Tribunal from time to time.
7. At the outset, the Ld. AR of the assessee took us to paper book pages 22 and 23, which was a part of agreement between India and United Kingdom and read article-11 in respect of dividend. Our attention was also invited to article 24 placed at paper book page 28 and in view of the above, article 24 it was argued that assessee was entitled to refund of taxes paid in United Kingdom in respect of its dividend income.
8. The Ld. Departmental Representative on the other hand, invited our attention to Tribunal's order at para 22 and argued that Hon'ble Tribunal has already held that assessee was not entitled to the claim. It was argued that confusion in the order of Tribunal arises only if para 22 is read separately and if they are read together that there is no confusion. Our attention was also invited page 30 of paper book and para 15 of Tribunal's order was read and in view of this, it was argued then there was no evidence of any credit of taxes having been paid to coffers of Government of United Kingdom and, therefore, it was argued that the Ld. CIT (A) has rightly rejected the claim.
9. We have heard the rival parties and have gone through the material placed on record. We find that the Tribunal in its order dated 6th March, 2009vide para 20 had held that credit may have to be given for amount not exceeding that portion of Indian tax which such income bears to the entire income chargeable to Indian Tax. However in para 21 and para 22 it dismissed the appeal by holding as under:
| "21. | Further, as a matter of fact, this issue has already been adjudicated upon by the CIT (A) in his earlier order dated 27.02.2003 in appeal against order u/s 154 read with section 143(1) (a) of the Income Tax Act, 1961. The refund of the same amount cannot be re-agitated or taken up again for fresh decision in other proceedings for that very assessment year. This would be against the principles of res judicata. On that ground also the appeal filed by the assessee is to be dismissed. | |
| 22. | In view of the above, the assessee is not entitled to any refund of the credit of Rs.51,30,814/- being Advance Corporation Tax paid by the U. K. companies on dividend distributed to the assessee." |
10. We further observe that the Hon'ble High Court has set aside the order of Tribunal and it has directed the Tribunal to elaborate the reasons for arriving at its findings in para 22. The Tribunal in its order dated 06.03.2009 has dismissed the appeal of the assessee by holding that the matter had already been decided by Ld. CIT (A) in appeal against order u/s 154 and therefore applying the principle of resjudicata dismissed the appeal. In our considered opinion, the appeal for the same amount of refund against order u/s 143(3) and against section 154 read with section 143(1) (a) are different proceedings. Once proceedings u/s 143(2) are started assessment u/s 143(1) (a) comes to an end. The assessment u/s 143(1) (a) becomes final only if no notice is issued within prescribed period and if notice u/s 143 (2) is issued after assessment u/s 143 (1) (a), the assessment orders passed u/s 143 (3) replaces order passed u/s 143(1) (a). Therefore, in our opinion the assessee had the right to appeal against order passed u/s 143 (3) and had the right to agitate the same issue as already agitated in proceedings against order passed u/s 154 read with section 143(1) (a) as order passed u/s 154 against order passed u/s 143 (1) (a) is an extension of proceedings u/s 143 (1) (a).
11. As regards merits of the case, we observe that Ld. CIT (A) dismissed the appeal of the assessee just holding that assessee was not able to rebut each and every point raised by Assessing Officer and further on the basis that appeal was already decided by his predecessor in appeal filed against order u/s 154. In view of the above facts and circumstances, we are of the view that queries raised by Assessing Officer points a, b, c, d and e are the questions of facts which can be verified by Assessing Officer with the help of assessee and Department. Therefore, in the interest of justice we set aside the matter to the office of Assessing Officer who will readjudicate the case on the basis of facts of the case and as per law.
In view of the above, the appeal filed by assessee is allowed for statistical purposes.
Regards
Prarthana Jalan
__._,_.___
No comments:
Post a Comment