HDFC ERGO GENERAL INSURANCE COMPANY LIMITED,MUMBAI V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 6(2), MUMBAI, MUMBAI

ITA 2843/MUM/2025

AI Insights

The case involves multiple appeals by HDFC Ergo General Insurance Company Limited against the orders of the Learned Commissioner of Income-tax (Appeals) and the Deputy Commissioner of Income-tax concerning the assessment years 2017-18 and 2018-19. The primary issues revolved around the merger of HDFC Ergo General Insurance Company Limited with HDFC General Insurance Company Limited, the subsequent assessment orders, and the handling of appeals concerning the Dividend Distribution Tax (DDT) and other tax liabilities. The Tribunal addressed the procedural handling of these appeals, the substantive issues of tax assessments, and the applicability of DDT rates under the India-Germany Double Taxation Avoidance Agreement (DTAA).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 706827 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2017-2018
• Appeal Filed On: 24-04-2025
• Other Referred Cases: Checkmate Services Pvt. Ltd. v. CIT, DCIT v. Total Oil Pvt Ltd, Genpact India Pvt Ltd v. DCIT, Texas Instruments (India) Pvt Ltd v. JCIT (LTU), Maruti Suzuki India Ltd v. DCIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RITESH MISHRA
• Assessee Lawyers: MADHUR AGARWAL
• Keywords: Opportunity of being heard; Bonafide belief; Principle of natural justice; Assessment record; Double taxation relief
• Section: 143(3); 43B; 244A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E”, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SMT. RENU JAUHRI, ACCOUNTANT MEMBER ITA No.2843/Mum/2025 - A.Y. 2017-18 ITA No.2844/Mum/2025 - A.Y. 2018-19 HDFC Ergo General Insurance Company Limited, 6th Floor, Leela Business Park, Andheri Kurla Road, Andheri (East), Mumbai-400 059 PAN: AABCL5045N vs The Deputy Commissioner of Income-tax-1(1)(2), Mumbai / NeAC, Delhi APPLICANT RESPONDENT ITA No.2870/Mum/2025 - A.Y. 2018-19 HDFC Ergo General Insurance Company Limited, (Successor to HDFC Ergo General Insurance Company Limited, PAN-AABCH0738E) 6th Floor, Leela Business Park, Andheri Kurla Road, Andheri (East), Mumbai-400 059 PAN: AABCL5045N vs NeAC, Delhi, presently DCIT, CC- 6(2), Mumbai APPLICANT RESPONDENT Assessee by : Shri Madhur Agarwal Respondent by : Shri Ritesh Mishra, CIT DR Date of hearing : 30/06/2025 Date of pronouncement : 08/07/2025 2 ITA 2843, 2844 & 2870/Mum /2025 HDFC Ergo General Insurance Co Ltd O R D E R Per Bench: All three appeals of the assesse were filed against the order of the Learned Commissioner of Income-tax (Appeals)-54, Mumbai [for brevity, the “Ld. CIT(A)”], passed under section 250 of the Income-tax Act, 1961 (for brevity, “the Act”), date of order 28/02/2025 for A.Y 2017-18 and 2018-19. The impugned orders emanated from the orders of the Learned Deputy Commissioner of Income-tax, Circle-1(1)(2), Mumbai (for brevity, the “Ld. AO”) for A.Y. 2017-18 passed under section 143(3), date of order 30/12/2019 and by National e-Assessment Centre, Delhi, (for brevity, the “Ld. AO”) under section 143(3) read with section 144B of the Act, date of order 22/03/2024 for A.Y. 2018-19. 2. All the three appeals have same nature of facts and common issue; so all the appeals were heard together and are being disposed of by this common order. ITA No.2843/Mum/2025, AY 2017-18 3. In relation to AY2017-18, it was submitted that HDFC Ergo General Insurance Company Limited merged with HDFC General Insurance Company Limited (formerly known as L&T General Insurance Company Limited). The appointed date of the merger was approved by the Insurance Regulatory and Development Authority of India (IRDA) through its approval letter dated 14/08/2017. Subsequently, the name of the merged entity was changed from HDFC General Insurance Company Limited to HDFC Ergo General Insurance Company Limited. 4. During the assessment proceedings, HDFC Ergo General Insurance Company Limited was assessed under Section 143(3) of the Act, vide order dated 30/12/2019, wherein additions were made under various heads. Meanwhile, 3 ITA 2843, 2844 & 2870/Mum /2025 HDFC Ergo General Insurance Co Ltd another appeal was also filed before the Ld. CIT(A) by an entity bearing the name ‘HDFC Ergo General Insurance Company Limited’, challenging the same assessment order. Due to the identical names of the entities post-merger, the Ld. CIT(A) observed in paragraph 5 as follows: “5. From form no.35 along with grounds of appeal, it is seen that the appeal for A.Y. 2017-18 have been filed twice, i.e. CIT(A)-2/10313/2019-20 dated 29.01.2020 and CIT(A)-2/10310/2019- 20 dated 29.01.2020. In the appeal filed bearing no. CIT(A)-2/10313/2019-20, the appellate order for A.Y. 2017-18 has already been passed on 28.02.2025. Therefore, the present appeal has become infructuous.” In response to this observation, the Ld. AR submitted that both appeals were filed by HDFC Ergo General Insurance Company Limited due to a mistaken belief, and the Ld. CIT(A) erroneously dismissed the appeal bearing No. CIT(A)-2/10310/2019- 20 by order dated 28/02/2025. 5. The Ld. DR did not raise any serious objection to the submissions made by the Ld. AR. Accordingly, we find that the appeal was dismissed merely on the ground of duplication, without examining the merits of the case, which amounts to a violation of the principles of natural justice. We, therefore, direct the Ld. CIT(A) to restore the appeal for A.Y. 2017-18 bearing No. CIT(A)-2/10310/2019-20 to its file. We do not express any opinion on the merits of the case, so as not to prejudice the appellate proceedings. Needless to say, the assessee shall be granted a reasonable opportunity of being heard in the restored appeal. 6. In the result, the appeal bearing ITA No. 2843/Mum/2025 stands allowed. 4 ITA 2843, 2844 & 2870/Mum /2025 HDFC Ergo General Insurance Co Ltd ITA Nos 2844 & 2870/Mum/2025, AY 2018-19 ITA No. 2844/Mum/2025 7. Grounds raised by the assesse in ITA No.2844/Mum/2025 are as follows:- APPEAL “Each of the following grounds are independent of, and without prejudice to one another: 1. The Commissioner of income-tax (Appeals)-54, Mumbai (hereinafter referred to as \"the CIT(A)\"] while passing order under section 250 of the Income Tax Act, 1961 (hereinafter referred to as \"the Act\") failed to consider the submission dated 16- Dec-21 filed by the Appellant before the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (hereinafter referred to as \"AO\") in response to notice dated 01-Dec-21 bearing appeal No. NFAC/2017-18/10020556. 2. The CIT(A) erred in dismissing the order without realising that the AO had made variations to the returned income prejudicial to the interest of Company without serving notice to the Appellant to show cause as to why the proposed variation should not be made thereby violating the principles of natural justice and not adhering to the Notification S.O. 741(Ε) (ΝΟ. 6/2021/F. NO. 370149/154/2019- TPL], dated 17-Feb-21 in respect of Faceless Assessment (First Amendment) Scheme, 2021 [\"the Scheme, 2021\"]. 3. The Order of the CIT(A) dated 28-Feb-25 passed under section 250 of the Act is bad in law since the same was passed based on the submissions made by the appellant for appeal preferred for Assessment Year 2014-15 (\"AY 14-15\") without providing the appellant sufficient opportunity, thereby violating principles of natural justice. 4. The CIT(A) erred in confirming the disallowance of Rs. 2,80,592 [INR 2,69,164 being sum received by the Appellant from employees on account of contribution to Employee State Insurance Commissions (\"ESIC\") and INR 11,428 being sum received by the Appellant from employees on account of contribution to Labour Welfare Fund (\"LWF\")] under section 43B of the Act having failed to appreciate that that the sum of INR 2,80,592 was contributed to ESIC and LWF before the due date of filing the return of income for AY18-19 and hence allowable under section 43B of the Act. 5 ITA 2843, 2844 & 2870/Mum /2025 HDFC Ergo General Insurance Co Ltd 5. The CIT(A) erred in not directing AO to allow the additional deduction of Rs. 2,82,880 under section 80JJAA of the Act. 6. The CIT(A) erred in not directing the AO to grant refund of Rs. 6,05,30,569 being excess Dividend Distribution Tax ('DDT') paid by the Appellant being the difference between the rate of 20.35765 percent under section 115-0 of the Act on the dividends declared and paid by the Appellant to its foreign promoter shareholder ERGO International AG, a tax resident of Germany, and the rate of 10% being the rate under Article 10 of the India-Germany Double Taxation Avoidance Agreement (DTAA). 7. The CIT(A) erred in not directing the AO to grant interest under section 244A of the Act amounting to Rs. 2,57,25,492 on the refund referred to in ground no. (6) above due to the Appellant. 8. The CIT(A) erred in confirming the disallowance of Rs. 40,074 being sum paid towards profession tax having failed to appreciate that the said sum paid towards professional tax is not routed through profit and loss account and hence allowable under section 438 of the Act. The appellants crave leave to add to, amend, alter, vary, omit or substitute the aforesaid grounds of appeal or add a new ground or grounds of appeal at any time before or at the time of hearing of the appeal as they may be advised.” 8. The Ld. AR submitted during the course of arguments that the grounds raised before the Bench pertain to the fact that the Ld. CIT(A) has failed to adjudicate Ground Nos. 3, 5, 6, and 8. The Ld. AR has filed a paper book comprising pages 1 to 522, which is placed on record. It was submitted that the assessee had furnished detailed submissions before the Ld. CIT(A) on 16/12/2021 in relation to the aforementioned grounds. These documents were duly uploaded online, and the acknowledgment receipts are annexed in the APB at pages 50 to 76, wherein the assessee has extensively addressed all relevant grounds. The Ld. AR specifically 6 ITA 2843, 2844 & 2870/Mum /2025 HDFC Ergo General Insurance Co Ltd contended that the Ld. CIT(A) has not adjudicated the aforementioned grounds and has erroneously noted that no specific submissions were made by the assessee. In fact, the necessary details were submitted through a letter dated 16/12/2021, a copy of which is included in APB pages 3 to 76. Accordingly, the Ld. AR prayed that the matter in relation to Ground Nos. 3, 5,6 and 8 be restored to the file of the Ld. CIT(A) for proper adjudication. 9. The Ld. DR did not raise any objection to the submissions made by the Ld. AR. 10. We have heard the rival submissions and perused the material available on record. In our considered view, the Ld. CIT(A) has passed the order without considering the assessee’s submissions and without adjudicating the matter on merits. Therefore, Ground Nos. 3, 5 and 8 are restored to the file of the Ld. CIT(A) for fresh adjudication. The Ld. CIT(A) is directed to pass a speaking order after affording a reasonable opportunity of being heard to the assessee. We shall adjudicate Ground No. 6 along with ITA No. 2870/Mum/2025 jointly at a later stage in this order, as the issue pertains to DDT under Section 115-O, which has been claimed for relief under the provisions of the applicable DTAA. 11. Ground No. 7 is consequential in nature and does not require separate adjudication. 12. Ground No. 4 pertains to the delayed payment of employees’ contribution to statutory funds, namely, Rs.2,69,164/- under ESIC and Rs.11,428/- under the Labour Welfare Fund, aggregating to Rs.2,80,592/-, which was disallowed and added back to the assessee’s income under Section 43B of the Act. The said addition was confirmed by the Ld. CIT(A). The Ld. DR submitted that the issue stands covered in favour of the revenue by the judgment of the Hon’ble Supreme 7 ITA 2843, 2844 & 2870/Mum /2025 HDFC Ergo General Insurance Co Ltd Court in Checkmate Services Pvt. Ltd. v. CIT [(2022) 143 taxmann.com 178 (SC)]. In view of the said binding precedent, this ground raised by the assessee is liable to be dismissed. Accordingly, Ground No. 4 stands dismissed. 13. In the result, the appeal of the assessee in ITA No. 2844/Mum/2025 is partly allowed for statistical purposes. Ground Nos. 1 & 2 are general in nature, Ground Nos. 3, 5, and 8 are restored for fresh adjudication, while Ground Nos. 4 and 7 are dismissed. ITA No.2870/Mum/2025 14. The assessee has challenged the applicability of Section 115-O of the Act, in the present appeal. The Ld. AR submitted that the Dividend Distribution Tax (DDT) levied under Section 115-O is subject to the provisions of the Double Taxation Avoidance Agreement (DTAA), and in this case, the India–Germany DTAA would apply. It was contended that, in view of Article 10 of the India–Germany DTAA, the DDT on dividends distributed to the foreign promoter shareholder, ERGO International AG, a tax resident of Germany, should be restricted to 10%, as the DTAA provisions are more beneficial to the assessee under Section 90(2) of the Act. The assessee, having paid DDT at the rate of 20.35765%, claimed a refund of Rs.6,05,30,569/-, being the excess tax paid. It is informed to the bench that the decision of the Special Bench of the ITAT, Mumbai in the case of DCIT v. Total Oil Pvt Ltd [(2023) 144 taxmann.com 332], where it was held that the DTAA would not apply to the levy of DDT under Section 115-O, unless the contracting states have agreed to extend DTAA benefits to the 8 ITA 2843, 2844 & 2870/Mum /2025 HDFC Ergo General Insurance Co Ltd domestic company distributing dividends. The Tribunal, in that case, ruled that the DTAA is not automatically applicable to DDT unless expressly provided. 15. In the original appeal bearing no. NFC/2017-18/10020556 for A.Y. 2018–19, the assessee had raised this issue in Ground No. 13 before the Ld. CIT(A) corresponding ground no-6 of assessee’s appeal before ITAT, ITA No. 2844/Mum/2025. However, the Ld. CIT(A) rejected the ground, citing absence of specific submissions (refer page 77 of the impugned appellate order in ITA No. 2844/Mum/2025). 16. Subsequently, based on the coordinate bench decision in JCIT (LTU) v. Texas Instruments (India) Pvt Ltd, IT(TP)A No. 275/Bang/2019 (A.Y. 2011–12), dated 11.03.2022, the assessee, as a matter of alternate efficacious remedy, filed a fresh appeal before the Ld. CIT(A) challenging the levy of DDT at 20.35765% instead of the DTAA-prescribed 10%. The Bangalore Bench, in Texas Instruments (India) Pvt Ltd, held that since DDT liability under Section 115-O does not form part of the assessment of total income under Section 143(3), a separate appeal before the CIT(A) is maintainable under Section 246A, on the ground that the assessee “denies its liability to be assessed under this Act.” The order also discussed other binding precedents including Genpact India Pvt Ltd v. DCIT [(2019) 111 taxmann.com 402 (SC)], where the Hon’ble Supreme Court held that an assessee can challenge tax liability under special charging provisions such as Section 115QA by filing a separate appeal under Section 246A. The Tribunal, in Texas Instruments, further clarified that the DDT, being an additional tax not linked to computation of total income, does not fall within the purview of Section 143(3) assessments and must be appealed independently. The relevant paragraphs of the order of Texas Instruments (India) Pvt Ltd (supra) are reproduced as below:- 9 ITA 2843, 2844 & 2870/Mum /2025 HDFC Ergo General Insurance Co Ltd “4. The assessee has raised following additional ground before the Tribunal:- \"On the facts and circumstances of the case and in law, the Assessing officer/Commissioner of Income tax (appeals) ought to have restricted the levy of Dividend Distribution Tax \"DDT), on the dividend paid to M/s Texas Instruments Incorporated, USA, to 15 percent in terms of Article 10 of Double Taxation Avoidance Agreement (\"DTAA\") between India and USA, instead of 16.0688 percent charged in terms of section 115-0 of the Income tax Act, 1961.\" 4.1 In this additional ground, the assessee has raised a legal issue contending that the dividend distribution tax payable on the dividend amount paid to its A.E. in USA should be restricted to the rate prescribed under DTAA. It is submitted that this is a purely legal issue and no new facts are necessary. Relying on the decision rendered by Hon'ble Supreme Court in the case of National Thermal Power Corporation Ltd (229 ITR 283), the assessee has prayed for admission of this additional ground. 4.2. The Ld AR submitted that this issue is covered in favour of the assessee by the decision rendered by the co-ordinate benches of Tribunal in the following cases:- (a) Giesecke & Devrient (India) (P) Ltd vs. ACIT (2020) [120 taxmann.com 338) (Delhi-Trib) (b) DCIT vs Indian Oil Petronas (P) Ltd (2021) (127) taxmann.com 389) (Kolkata-Trib). (c) Maruti Suzuki India Ltd vs. DCIT (2019)(ITA No.961/Del/2015) (Delhi) (d) PCIT vs. Maruti Suzuki India Ltd (2019)(W.P. (C) 13241/2019) The Ld A.R has also placed reliance on the interim order passed by the Delhi bench of Tribunal in the case of Maruti Suzuki India Ltd vs. DCIT (2019) (ITA No.961/Del/2015 dated 31.10.2019), wherein the Delhi bench has expressed the view that the Dividend Distribution tax (DDT) is a \"tax on income\" and hence additional ground can be raised by the assessee in appellate proceedings. 4.3 The present appeal pertains to the assessment order passed u/s 143(3) of the Act and we noticed that, in the impugned assessment order, the AO did not discuss anything about Dividend Distribution Tax either affirming the tax paid by the assessee u/s 115-0 of the Act or raising any additional demand. In this context, the bench asked the Ld A.R as to how the issue of DDT can be said to arise out of the impugned assessment order and whether the assessee can raise additional ground relating to the same in the present appeal, when no discussion is there on DDT liability. 4.4 The Ld A.R heavily placed his reliance on the decision rendered by Hon'ble Supreme Court in the case of Genpact India (P) Ltd (2019)(111 taxmann.com402) and submitted that the Hon'ble Supreme Court has held that the additional tax payable u/s 115QA can be challenged u/s 246A 10 ITA 2843, 2844 & 2870/Mum /2025 HDFC Ergo General Insurance Co Ltd under the clause \"an order against the assessee where the assessee denies his liability\". He submitted that the Hon'ble Supreme Court did not lay down proposition that there has to be a separate appeal filed before Ld CIT(A) for the liability u/s 115QA. He further submitted that the Hon'ble Supreme Court did not advert to the point that the \"denial of liability to tax” may not be a subject matter of the assessment proceedings u/s 143(3) and it did not put a bar on raising the said issue as an additional ground in the appeal filed against the assessment order passed u/s 143(3) of the Act. 4.5 The Ld A.R also submitted that the details of DDT are given in the Income tax return filed by the assessee and further there is no separate assessment procedure prescribed for assessing the correct amount of DDT liability u/s 115-0. He submitted that the assessment order did not discuss anything about DDT and hence it should be assumed that this amounts to deemed acceptance of DDT liability by the AO. He submitted that the same amounts to application of mind as held in the case of Kelvinator (2002)(256 ITR 1) by Hon'ble Delhi High Court. Accordingly he submitted that it cannot be said that the DDT liability is not part of assessment order passed u/s 143(3), if it is not specifically discussed in the assessment order, especially when there is no other section in the Act dealing with the assessment of DDT liability like the case of Fringe Benefit Tax assessment. He further submitted that the Hon'ble Madras High Court in the case of CIT vs. Indian Express (Madurai) (1983)(13 Taxman 441) (Mad) has held that any point which goes into the adjustment of tax liability can be looked into by ITAT. 4.6 He submitted that in the case of Maruti Suzuki vs. DCIT (2019)(ITA No.961/Del/2015), the revenue has stated that the DDT was not part of tax liability of the assessee nor it is part of assessment record and accordingly contended that the ground on DDT cannot be admitted. However, the Delhi Tribunal has admitted additional ground on DDT liability. 4.7 Without prejudice to the above arguments that the Tribunal should admit additional ground, the Ld A.R submitted that if the ITAT were to hold that the appellant had to first file appeal on this ground before Ld CIT(A) u/s 246A, then the ITAT may direct Ld CIT(A) to admit the appeal of the appellant condoning the delay in filing the appeal. 4.8 We heard Ld D.R on this issue and perused the record. The DDT is paid as per the provisions of sec.115-0, which is titled as \"Tax on Distributed Profits of Domestic Companies\". The assessment order is passed u/s 143(3) of the Act, wherein the assessing officer is required to make assessment of the \"total income or loss\" of the assessee. The expression \"total income\" is defined in sec. 2(45) of the Income tax Act to mean the \"total amount of income referred to in section 5, computed in the manner laid down in this Act. It can be noticed from section 5, it talks about the income received or deemed to be received or accrued or deemed to accrue or arise. Thus when the assessing officer is determining \"total income\" of the assessee, he is required to look into the 11 ITA 2843, 2844 & 2870/Mum /2025 HDFC Ergo General Insurance Co Ltd income received or deemed to be received or accrued or deemed to accrue or arise. On the contrary, it can be noticed that the DDT is a \"tax payable on the distribution of dividend and it is in no way connected to the determination of \"total income\". The appeal filed by the assessee before us is related to the \"determination of total income\" u/s 143(3) of the Act. 4.9 Now the question that arises is whether the assessee can raise the issue relating to payment of DDT in an appellate proceeding relating to determination of total income u/s 143(3) of the Act. We notice that the Hon'ble Delhi Court in the case of Genpact India (P) Ltd vs. DCIT (2019)(108 taxmann.com 340) dealt with a writ petition filed before it by the assessee challenging the demand raised u/s 115QA of the Act, which relates to tax on distributed income by way of buy back of shares. The writ petition was filed on the reasoning that the Income tax Act does not provide appeal remedy for the additional tax demanded u/s 115QA of the Act. However, the revenue submitted that the assessee is having alternative remedy for filing appeal before Ld CIT(A) and accordingly prayed for rejection of Writ petition filed by the assessee. It is pertinent to note that the said assessment order passed by the AO included the demand raised u/s 1150A of the Act also besides the demand raised u/s 143(3) of the Act. The Hon'ble Delhi High Court rejected the writ petition and allowed the assessee to file separate appeal before Ld CIT(A) u/s 246A of the Act against the tax liability raised u/s 115QA of the Act. With regard to the contention of the assessee that the additional tax payable u/s 115QA should not be construed as forming part of assessment order, the Hon'ble Delhi High Court answered the same as under:- \"16. At the outset, the Court would first like to deal with the submissions of Mr Ganesh that the impugned demand raised under Section 115-QA of the Act should not be construed as forming part of the impugned assessment order and that it is something separate from it. While it is true that the demand under Section 115-QA of the Act would be in addition to the total income, the fact of the matter is that in the present case it forms an integral part of the impugned assessment order under Section 143 (3) of the Act. Reading the assessment order as a whole, it is plain to the Court that this demand under Section 115-QA of the Act is in addition to demands under other issues, all of which form part of the impugned assessment order. In fact. Paragraph 11 of the impugned assessment order, which gives the computation of the total taxable income, includes the demands raised under all heads and it includes the demand under Section 115-QA of the Act. Therefore, it is not possible for this Court to read this part of the order separate from the rest of the assessment order.\" 4.10. It is pertinent to note that the M/s Genpact India P Ltd challenged the above said decision rendered by Hon'ble Delhi High Court before Hon'ble Supreme Court and the decision of Hon'ble 12 ITA 2843, 2844 & 2870/Mum /2025 HDFC Ergo General Insurance Co Ltd Supreme Court is reported in (2019)(111 taxmann.com 402). As noticed earlier the Hon'ble Apex Court held that the contention of the assessee that it is not liable to pay tax u/s 115QA would fall under the clause \"an order against the assessee where the assessee denies his liability to be assessed under this Act\". mentioned in clause (a) of sub. Section (1) of sec. 246A of the Act. Since the DDT payable u/s 115-0 of the Act is an additional tax liability akin to the tax payable u/s 115QA of the Act, there should not be any dispute that the assessee can challenge the liability imposed on it u/s 115-0 of the Act as held by Hon'ble Supreme Court in the case of Genpact India P Ltd (supra). 4.11 However, the question that arises is whether the assessee can challenged the liability u/s 115-0 of the Act by raising an additional ground in the appeal filed against the assessment order passed u/s 143(3) of the Act. It is pertinent to note that clause (a) of sub. Sec. (1) of sec. 246A contains various types of the orders passed by the tax authorities which, inter alia, includes (a) an order against the assessee where the assessee denies his liability to be assessed under this Act and (b) any order of assessment under sub-section (3) of section 143. Thus the grievance of the assessee on DDT liability falls under different class of liabilities mentioned in sec. 246A of the Act. Further, Sec. 246A provides for appellate remedy for different types of tax demands raised upon the assessee and there should not be any dispute that the assessees have been filing separate appeals for the demand raised under different sections of the Act. 4.12 In the case of Genpact India P Ltd, the Hon'ble Delhi High Court noticed that the additional tax liability u/s 115QA was raised in the assessment order itself. Hence the Hon'ble Delhi High Court held that \"it is not possible for this Court to read this part of the order separate from the rest of the assessment order\". We also notice that M/s Genpact India P Ltd had filed appeal before Ld CIT(A) challenging various additions made by the AO while determining the total income of the assessee and by the time the writ petition was disposed of by Hon'ble Delhi High Court, the Ld CIT(A) had disposed of the appeal filed by the assessee and further the revenue had challenged his order by filing appeal before ITAT. However, the assessee was directed by Hon'ble Delhi High Court to agitate the issue of tax liability u/s 115QA by filing appeal before Ld CITIA) only. 4.13 In the instant case, first of all, the DDT liability is not forming part of assessment order passed u/s 143(3) of the Act. Further, the liability u/s 115-0 can be challenged under the clause \"an order against the assessee where the assessee denies his liability to be assessed under this Act\" mentioned in sec. 246A(1)(a) as held by Hon'ble Supreme Court. The above said clause is a 13 ITA 2843, 2844 & 2870/Mum /2025 HDFC Ergo General Insurance Co Ltd separate clause unconnected with the clause any order of assessment under sub-section (3) of section 143\" 4.14 Accordingly, we are of the view that the assessee cannot raise the additional ground relating to DDT liability in the present appeal. The assessee, if so advised, may prefer appeal in that regard before Ld CIT(A). Since the assessee had entertained bonafide belief that its grievance on DDT liability can be raised as additional ground before ITAT, it did not file appeal before Ld CIT(A). Accordingly, we direct the Ld CIT(A) to take a lenient view on the matter of condonation of delay, if the assessee prefers appeal before him on DDT liability of the year under consideration. 4.15 In view of the foregoing discussions, we reject the additional ground raised by the assessee on DDT liability.” 17. Accordingly, the assessee filed a fresh appeal before the Ld. CIT(A) with a request for condonation of delay, reiterating the same legal position and enclosing a detailed “Statement of Facts,” which is reproduced as follows: “STATEMENT OF FACTS This is an appeal before the Hon'ble Commissioner of Income Tax (Appeals), National Faceless Appeal Centre ['CIT(A)'] against the assessment order dated 22-Apr-21 passed by the Assessing officer ('Ld AO') under section 143(3) read with section 115-0 of the Income-tax Act, 1961 ('the Act') in case of HDFC ERGO General Insurance Company Limited ('HDFC ERGO' or 'the Appellant or 'the Company') for AY 18-19 relevant to Financial Year ('FY') 1718. 1. The Appellant is a joint venture between HDFC Ltd, India's premier Housing Finance Institution and ERGO International AG, the primary insurance entity of Munich Re Group. 2. The Appellant filed its original Return of Income ('ROI') for the captioned year on 23-Nov-18 vide e-filing acknowledgement no. 379397491231118 under section 139(1) of the Act declaring a total income of INR 96,40,64,290 and duly paid taxes on the same. 3. During AY 1819, 48.66 percent shareholding of the Appellant was held by its foreign promoter shareholder ERGO International AG ('ERGO International\") which is a tax resident of Germany. For the impugned AY, the Appellant had declared and paid dividend of inter alia INR 58,44,04,624 to ERGO International on which Dividend Distribution Tax ('DDT') of INR 11,89,71,031 at the rate of 20.35765 percent was paid by the Appellant under section 115-0 of the Act. Details of the dividend paid and DDT deposited are duly reflected in the ROI filed by the Appellant. 14 ITA 2843, 2844 & 2870/Mum /2025 HDFC Ergo General Insurance Co Ltd 4. The assessment under section 143(3) for the captioned year was completed assessing total income of the Appellant at INR 97,14,97,670 after making various adjustments to the returned income. 5. In terms of Article 10 of the India-Germany Double Taxation Avoidance Agreement ('DTAA'), the DDT rate on dividends paid to ERGO International being a tax resident of Germany eligible for benefit of DTAA, shall be restricted to 10 percent and consequently the excess tax deposited by the Appellant ought to be refunded. During the course of assessment proceedings, the Appellant filed an additional claim before the Ld. AD vide letter dated 05-Jan-21 for refund of such excess DDT deposited by the Company. However, the Ld. AO ignored the submissions of the Appellant and passed the assessment order under section 143(3) of the Act without any discussion in this regard. 6. Aggrieved by the assessment order dated 22-Apr-21, the Appellant filed an appeal against such order (including challenging the erroneous assessment of DDT at 20.35765 percent instead of 10 percent) before the Hon'ble Commissioner of Income tax (Appeals), National Faceless Appeal Centre ('NFAC') ['CIT(A)'] [Appeal No. NFAC/2017-18/10020556). The aforesaid appeal is presently pending for adjudication before the Hon'ble CIT(A). 7 In the recent judgment of the Hon'ble ITAT in case of JCIT v. Texas Instruments (India) Pvt Ltd IT (TP) A No. 525/Bang/2019 (Bangalore ITAT), it has been held that separate appeal needs to be filed before Hon'ble CIT(A) in case of DDT refund matters (similar to facts of the Appellant) since the same does not arise out of regular assessment order passed under section 143(3) of the Act. 8. In view of the legal principle laid down by the Hon'ble Bangalore ITAT in case of Texas Instruments (supro), as a matter of good compliance, the Appellant is filing the present appeal before the Hon'ble CIT(A) with a request for condoning the delay for not filing a separate appeal within the prescribed time limit. 9. There is no change in the existing appeal filed before the Hon'ble CIT(A) and once this appeal is admitted, the Appellant shall not press the ground on DDT in the appeal filed before Hon'ble CIT(A) in Appeal No. NFAC/2017-18/10020556. 10. The said issue of DDT refund is squarely covered by the favourable decision of Delhi Bench of the Hon'ble ITAT in case of Giesecke & Devrient [India) Pvt Ltd (ITA No. 7075/DEL/2017) wherein it has been held that the DDT rate under the Act should not exceed the tax rates specified in Article 10 of the DTAA (i.e. 10% as mentioned in Article 10 of the India-Germany DTAA). In the present case too, the DTAA under consideration is the same ie. India-Germany DTAA. This issue does not 15 ITA 2843, 2844 & 2870/Mum /2025 HDFC Ergo General Insurance Co Ltd require any investigation into fresh facts and is purely legal in nature. Accordingly, following the said decision which is binding on the Hon'ble CIT(A), the said appeal should be adjudicated in favour of the Appellant.” 18. The DR submitted that the assessee has already agitated the same issue in the appeal bearing ITA No. 2844/Mum/2025 for A.Y. 2018–19, and the Ld. CIT(A) had rejected the ground for want of documentary evidence. He argued that the issue should be sustained only in that appeal and not duplicated. 19. We heard the rival submissions and considered the documents available in the record. Ground No. 13 of the appeal before 1st appellate authority corresponding Ground No.6 of the appeal of the assessee in ITA No. 2844/Mum/2025 for A.Y. 2018–19, relating to refund of excess DDT paid under Section 115-O of the Act, was rejected by the Ld. CIT(A) citing lack of specific submissions. The assessee declared and paid dividend of Rs.58.44 crores to ERGO International AG, a German resident, and paid DDT of Rs.11.89 crores at 20.35765%. The DDT, being higher than the DTAA-prescribed rate of 10%, was claimed as excess tax paid. The assessee raised the issue before the Assessing Officer during assessment, but the same was not addressed in the assessment order. A separate appeal was thus filed to comply with judicial precedent, with an undertaking not to press the DDT ground in the original appeal once the fresh appeal is admitted. The assessee also cited binding precedents including Giesecke & Devrient (India) Pvt Ltd, [2020] 120 taxmann.com 338 (Delhi - Trib.), where it was held that DTAA provisions would prevail over the domestic law rate of DDT. 16 ITA 2843, 2844 & 2870/Mum /2025 HDFC Ergo General Insurance Co Ltd However, in light of the legal principles laid down by the ITAT in Texas Instruments (India) Pvt Ltd (supra) and the Hon’ble Supreme Court in Genpact India Pvt Ltd (supra), we hold that the issue of excess DDT paid under Section 115-O, being independent of the assessment of total income under Section 143(3) of the Act, must be adjudicated in a separate appeal under Section 246A of the Act. The fresh appeal filed by the assessee before the Ld. CIT(A) on this issue shall be admitted and adjudicated on merits, and delay in filing the same shall be condoned, in view of the bona fide belief entertained by the assessee based on evolving judicial interpretations. The assessee shall be given a reasonable opportunity of being heard before the Ld. CIT(A), and a speaking order shall be passed after considering the submissions made and legal precedents cited. Upon admission of the fresh appeal, the assessee shall not press Ground No. 13 related to DDT in the original appeal bearing no. NFAC/2017-18/10020556 (related Ground no-6 of the appeal before ITAT in ITA No. 2844/Mum/2025), to avoid duplication. Following the order of Hon’ble Apex Court in Genpact India (P.) Ltd (supra) & order of the coordinate bench in Texas Instruments (India) Pvt Ltd (supra), the matter related to DDT refund is directed to be adjudicated exclusively in the fresh appeal filed before the Ld. CIT(A) under Section 246A of the Act by a speaking order. The Ld. CIT(A) is directed to admit and adjudicate the fresh appeal on DDT filed independently by the assessee. In the interest of justice, we direct the Ld. CIT(A) to condone the delay and pass a reasoned and speaking order on merits and no findings are given on merits at this stage. 20. In the result, the appeal of the assessee in ITA No. 2870/Mum/2025 is allowed in accordance with the terms discussed hereinabove. 17 ITA 2843, 2844 & 2870/Mum /2025 HDFC Ergo General Insurance Co Ltd 21. In the result, the appeal of the assessee in ITA No. 2844/Mum/2025, Ground no-6 on DDT is treated as infructuous in this appeal & dismissed; to be adjudicated independently in the separate appeal filed under Section 246A of the Act bearing no. NFAC/2017-18/10191009 related ITA No. 2870/Mum/2025. 22. In the result, appeals bearing ITA No.2843/Mum/2025 is allowed; appeal in ITA No.2844 & 2870/Mum/2025 is partly allowed for statistical purpose. Order pronounced in the open court on 08th day of July 2025. Sd/- sd/- (SMT. RENU JAUHRI) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, िदनांक/Dated: 08/07/2025 Pavanan Copy of the Order forwarded to: 1. अपीलाथ /The Appellant , 2. ितवादी/ The Respondent. 3. आयकर आयु\u0014 CIT 4. िवभागीय ितिनिध, आय.अपी.अिध., मुबंई/DR, ITAT, Mumbai 5. गाड फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, Mumbai 18 ITA 2843, 2844 & 2870/Mum /2025 HDFC Ergo General Insurance Co Ltd Details Date Initials Designation 1 Draft dictated on PC on 30.06.2025 Sr.PS/PS 2 Draft Placed before author 01.07.2025 Sr.PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member JM/AM 5. Approved Draft comes to the Sr.PS/PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS/PS 7. File sent to the Bench Clerk Sr.PS/PS 8 Date on which the file goes to the Head clerk 9 Date of Dispatch of order "