Tinplate Company of India, Kolkata V. DCIT(CPC), , Bangalore

ITA 437/KOL/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 9011 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 07-07-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; FORM 26AS
• Section: 2; 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘A’ BENCH, KOLKATA {VIRTUAL COURT HEARING} (Before Shri Aby T. Varkey, Hon’ble Judicial Member & Shri Girish Agrawal, Hon’ble Accountant Member) ITA No. 437/Kol/2020 Assessment Year: 2015-16 M/s. The Tinplate Company of India Limited.........................................................................Appellant 4, Bankshall Street Dalhousie Kolkata -700 001 [PAN : AABCT 0129 P] Vs. Deputy Commissioner of Income Tax, (CPC) Bangalore.................................................Respondent Appearances by: Shri Ketav Ved, FCA, appeared on behalf of the assessee. Shri Biswanath Das, Addl. CIT, Sr. D/R, appearing on behalf of the Revenue. Date of concluding the hearing : February 2 nd , 2022 Date of pronouncing the order : February 11 th , 2022 ORDER Per Girish Agrawal, Accountant Member:- This appeal filed by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals) - 6, Kolkata, (hereinafter the ‘ld. CIT(A)’), dt. 18/03/2020. 2. The assessee has raised the following grounds of appeal:- 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not allowing / adjudicating the issue relating to short grant of credit for Dividend Distribution Tax paid (DDT) of INR 84,63,518/-. 2. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not allowing / adjudicating the issue relating to erroneous levy of interest under section 115P of the Act. 3. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not allowing / adjudicating the issue / additional ground relating to claim for deduction of education cess debited in the books of accounts of the appellant. 4. The Appellant craves leave to add to or alter, by deletion, substitution or otherwise, any or all of the above grounds of objections, at any time before or during the hearing of the Appeal. 5. The Appellant submits that the above grounds are independent and without prejudice to one another. 3. At the outset, in respect of Ground No. 3 relating to the claim for deduction of education cess debited in the books of account of the assessee, the ld. A/R fairly conceded that the matter has been held against the assessee by the co-ordinate bench of the Tribunal in the case of M/s. Kanoria Chemicals & Industries Ltd. vs. ACIT in ITA No. 2184 & 2439/Kol/2018; Assessment Year 2012 identical circumstances it was held as under: “17. The Ld. Counsel for the assessee has submitted that ‘Cess’ has not been specifically mentioned in the aforesaid provisions of section 40(a)(ii) and, therefore, Cess is an allowable the “CBDT Circular No. 91/58/66 been interpreted that the ‘Cess’ shall not be disallowable. The said Circular for the sake of ready reference is reproduced as "Interpretation of provision of Section 40(a)(ii) of IT Act, 1961 Clarification regarding. Board where the Income Tax Officer has disallowed the 'cess' paid by the assessee on the ground that there has be provisions of section 10(4) of the Old Act and Section 40(a)(ii) of the new Act. 2. The view of the Income Tax Officer is not correct. Clause 40(a)(ii) of the Income Tax Bill, 1961 as introduced in the Parliament stood as unde "(ii) any sum paid on account of any cess, rate or tax levied on the profits or gains of any business or profession or assessed at a proportion ot, or otherwise on the basis of, any such profits or gains". When the matter came up before the Select 'omit the word 'cess' from the clause. The effect of the omission of the word 'cess' is that only taxes paid are to be disallowed in the assessments for the years 1962-63 and onwards. 3. The Board desire that the changed pos the notice of all the Income Tax Officers so that further litigation on this account may be avoided.{Board's F . No.91/5B/66 1967. 18. The Learned Counsel for the assessee in this respect has further the decision of the Hon’ble Bombay High Court in the case of “Sesa Goa Limited Vs.JCIT“ (2020) 117 taxmann.com 96 and further on the decision of the Hon’ble Rajasthan High Court in the case of “Chambal Fertilizers & Chemicals Ltd Vs. JCIT”: D.B Income-tax Appeal No. 52/2018 decided on 31 Hon’ble High Court/s relied upon the aforesaid CBDT Circular Dt. 18 1967(supra) and in view of the interpretation made by the CBDT have held that ‘education cess’ can be income chargeable under profession. The Learned Counsel has of the Co-ordinate Benches of this Tribunal, who judgments of the Hon’ble High Courts: 2 M/s. The Tinplate Company of India Limited M/s. Kanoria Chemicals & Industries Ltd. vs. ACIT in ITA No. 2184 & 2439/Kol/2018; Assessment Year 2012-13, order dt. 26/10/2021, identical circumstances it was held as under:- 17. The Ld. Counsel for the assessee has submitted that ‘Cess’ has not been specifically mentioned in the aforesaid provisions of section 40(a)(ii) and, Cess is an allowable expenditure. He in this respect has relied upon Circular No. 91/58/66-ITJ(19) dated 18-05-1967”, wherein it has that the ‘Cess’ shall not be disallowable. The said Circular for reference is reproduced as under:- "Interpretation of provision of Section 40(a)(ii) of IT Act, 1961 Clarification regarding.- "Recently a case has come to the notice of the Board where the Income Tax Officer has disallowed the 'cess' paid by the assessee on the ground that there has been no material change in the provisions of section 10(4) of the Old Act and Section 40(a)(ii) of the new 2. The view of the Income Tax Officer is not correct. Clause 40(a)(ii) of the Income Tax Bill, 1961 as introduced in the Parliament stood as unde "(ii) any sum paid on account of any cess, rate or tax levied on the profits gains of any business or profession or assessed at a proportion ot, or otherwise on the basis of, any such profits or gains". When the matter came up before the Select Committee, it was decided to 'omit the word 'cess' from the clause. The effect of the omission of the 'cess' is that only taxes paid are to be disallowed in the assessments 63 and onwards. – 3. The Board desire that the changed position may please be brought to notice of all the Income Tax Officers so that further litigation on this may be avoided.{Board's F . No.91/5B/66-ITJ(19), dated 18 18. The Learned Counsel for the assessee in this respect has further decision of the Hon’ble Bombay High Court in the case of “Sesa Goa Limited Vs.JCIT“ (2020) 117 taxmann.com 96 and further on the decision of the Hon’ble Rajasthan High Court in the case of “Chambal Fertilizers & Chemicals Ltd Vs. tax Appeal No. 52/2018 decided on 31-07-2018, wherein, the High Court/s relied upon the aforesaid CBDT Circular Dt. 18 view of the interpretation made by the CBDT have held that ‘education cess’ can be claimed as an allowable deduction while comput income chargeable under the heads of profits and gains of business or ession. The Learned Counsel has further relied upon the following decisions ordinate Benches of this Tribunal, who have followed the judgments of the Hon’ble High Courts: ITA No. 437/Kol/2020 Assessment Year: 2015-16 M/s. The Tinplate Company of India Limited M/s. Kanoria Chemicals & Industries Ltd. vs. ACIT in ITA No. 13, order dt. 26/10/2021, wherein under 17. The Ld. Counsel for the assessee has submitted that ‘Cess’ has not been specifically mentioned in the aforesaid provisions of section 40(a)(ii) and, expenditure. He in this respect has relied upon 1967”, wherein it has that the ‘Cess’ shall not be disallowable. The said Circular for "Interpretation of provision of Section 40(a)(ii) of IT Act, 1961 - "Recently a case has come to the notice of the Board where the Income Tax Officer has disallowed the 'cess' paid by the en no material change in the provisions of section 10(4) of the Old Act and Section 40(a)(ii) of the new 2. The view of the Income Tax Officer is not correct. Clause 40(a)(ii) of the Income Tax Bill, 1961 as introduced in the Parliament stood as under:- "(ii) any sum paid on account of any cess, rate or tax levied on the profits gains of any business or profession or assessed at a proportion ot, or otherwise on the basis of, any such profits or gains". Committee, it was decided to 'omit the word 'cess' from the clause. The effect of the omission of the 'cess' is that only taxes paid are to be disallowed in the assessments ition may please be brought to notice of all the Income Tax Officers so that further litigation on this ITJ(19), dated 18-5- 18. The Learned Counsel for the assessee in this respect has further relied upon decision of the Hon’ble Bombay High Court in the case of “Sesa Goa Limited Vs.JCIT“ (2020) 117 taxmann.com 96 and further on the decision of the Hon’ble Rajasthan High Court in the case of “Chambal Fertilizers & Chemicals Ltd Vs. 2018, wherein, the High Court/s relied upon the aforesaid CBDT Circular Dt. 18-05- view of the interpretation made by the CBDT have held that allowable deduction while computing the heads of profits and gains of business or relied upon the following decisions have followed the aforesaid a. Decision of Kolkata Bench of the Tribunal in the case of DCIT Vs. ITC Infotech India Ltd, ITA No. 67/Kol/2015 dt. 23 b. Decision of Kolkata Bench of the Tribunal in Vs. ACIT, ITA No. 404/Kol/2017 dt. 23 c. Decision of Kolkata Bench of the Tribunal in the case of SREI Infrastructure Finance Ltd Vs.Addl. CIT, R 19. However, with due respect to the decisions of the Court and Hon’ble Rajasthan High Court and of co Tribunal,we find that the issue is squarely covered by the decision of the Hon’ble Apex Court of the country in the case of “CIT Vs. K. Srinivasan” (1972) 83 ITR 346, wherein the following questio Apex Court:- “ Whether the words “Income tax” in the Finance Act of 1964 in sub and sub-s.(2)(b) of s. 2 would include surcharge and additional surcharge.” 20. The Hon’ble Supreme Court answered the question in favour of revenue observing as under:- “In our judgment it is unnecessary to express any opinion in the matter because the essential point for determination is whether surcharge is an additional mode or rate for cha given in the Webster's New International Dictionary includes amongothers"to charge (one) too much or in addition " also "additional of surcharge is to charge charge. If that meaning is applied to s. 2 of the Finance Act 1963 it would lead to the result that income tax and super tax were to be charged in four different ways or at four different rates which may rate (In part I of the First Schedule); (ii) Sur (iv) additional surcharge calculated in the manner provided Read in this way the tax”. 21. The Hon’ble Supreme Court, therefore, has revenue and held that surcharge and additional surcharge are part of the income-tax. At this stage, it is pertinent to mention here that ‘edu was brought in for mentioned as under:- “An additional surcharge, to be called the Education Cess to finance the Government’s commitment to universalise quality basic education, is 3 M/s. The Tinplate Company of India Limited a. Decision of Kolkata Bench of the Tribunal in the case of DCIT Vs. ITC Infotech India Ltd, ITA No. 67/Kol/2015 dt. 23-10-2019 b. Decision of Kolkata Bench of the Tribunal in the case of Tega Industries L ACIT, ITA No. 404/Kol/2017 dt. 23 c. Decision of Kolkata Bench of the Tribunal in the case of SREI Infrastructure Finance Ltd Vs.Addl. CIT, R-9, ITA No. 1318/Del/2012 dt. 31-12 19. However, with due respect to the decisions of the Hon’ble Bombay High and Hon’ble Rajasthan High Court and of co-ordinate Benches of this find that the issue is squarely covered by the decision of the Hon’ble the country in the case of “CIT Vs. K. Srinivasan” (1972) 83 ITR following questions came for adjudication before the Hon’ble “ Whether the words “Income tax” in the Finance Act of 1964 in sub s.(2)(b) of s. 2 would include surcharge and additional Supreme Court answered the question in favour of revenue “In our judgment it is unnecessary to express any opinion in the matter because the essential point for determination is whether surcharge is an additional mode or rate for charging income tax. The meaning of the word "surcharge"as given in the Webster's New International Dictionary includes amongothers"to charge (one) too much or in addition " also "additional tax".Thus the of surcharge is to charge in addition or to subject to an additional or charge. If that meaning is applied to s. 2 of the Finance Act 1963 it would lead to the result that income tax and super tax were to be charged in four different ways or at four different rates which may be described as (i) the basic rate (In part I of the First Schedule); (ii) Sur- charge; (iii) special (iv) additional surcharge calculated in the manner provided additional charges form a part of the income 21. The Hon’ble Supreme Court, therefore, has decided the issue in favour of the revenue and held that surcharge and additional surcharge are part of the At this stage, it is pertinent to mention here that ‘edu the first time by the Finance Act, 2004, wherein it was - An additional surcharge, to be called the Education Cess to finance the Government’s commitment to universalise quality basic education, is ITA No. 437/Kol/2020 Assessment Year: 2015-16 M/s. The Tinplate Company of India Limited a. Decision of Kolkata Bench of the Tribunal in the case of DCIT Vs. ITC Infotech the case of Tega Industries Ltd ACIT, ITA No. 404/Kol/2017 dt. 23-8-2019 c. Decision of Kolkata Bench of the Tribunal in the case of SREI Infrastructure 12-2019. Hon’ble Bombay High inate Benches of this find that the issue is squarely covered by the decision of the Hon’ble the country in the case of “CIT Vs. K. Srinivasan” (1972) 83 ITR ns came for adjudication before the Hon’ble “ Whether the words “Income tax” in the Finance Act of 1964 in sub-s (2) s.(2)(b) of s. 2 would include surcharge and additional Supreme Court answered the question in favour of revenue “In our judgment it is unnecessary to express any opinion in the matter because the essential point for determination is whether surcharge is an additional rging income tax. The meaning of the word "surcharge"as given in the Webster's New International Dictionary includes amongothers"to tax".Thus the meaning in addition or to subject to an additional or extra charge. If that meaning is applied to s. 2 of the Finance Act 1963 it would lead to the result that income tax and super tax were to be charged in four different be described as (i) the basic charge or charge; (iii) special surcharge and (iv) additional surcharge calculated in the manner provided in the Schedule. f the income tax and super decided the issue in favour of the revenue and held that surcharge and additional surcharge are part of the At this stage, it is pertinent to mention here that ‘education cess’ the first time by the Finance Act, 2004, wherein it was An additional surcharge, to be called the Education Cess to finance the Government’s commitment to universalise quality basic education, is proposed to be levied at the rate of two per cent on the amount of tax deducted or advance tax paid, inclusive of surcharge.” 22. The provisions of the Finance Act 2011 relevant to the Assessment Year under consideration i.e. 2012 reference, the same is 2(11) The amount of income and as increased by a surcharge for purposes of the Union calculated in the manner provided therein, shall be furthe surcharge for purposes of the Union, to be called the "Education Cess on income-tax", calculated at the rate of two per cent. of such income surcharge, so as to fulfil the commitment of the Government to provide and finance universalised quality basic education. 23. A perusal of the aforesaid provisions of the Finance Act 2004 and Finance Act 2011 would show that it has been specif is an additional surcharge levied on the income decision of the Hon’ble Supreme Court in the case of “CIT Vs. K. Srinivasan” (supra) the additional surcharge is part of the income decision of the Hon’ble the relevant provisions have not been brought into cases of “Sesa Goa Ltd” & Hon’ble Supreme Court prevails respectfully following the decision of “CIT Vs. K. Srinivasan” decided against the assessee. The addit accordingly dismissed. 4. Respectfully following the decision of the co Kanoria Chemicals & Industries Ltd. (supra 5. Now coming to Groun credit for Dividend Distribution Tax (DDT) paid for Rs.84,63,518/ u/s 115P of the Act. It is purely a question of fact which needs verification from the records for the claim of credit for DDT paid by the assessee. The ld. A/R the short grant of credit was made in the processing of the return under the intimation u/s 143(1) of the Act by the CPC, Bangalore. reproduced the grounds of appeal including grounds for claim of short grant of credit for DDT and interest thereon vide Ground 2 & 3 raised by the assessee but failed to give any finding thereon. In respect of these two grounds the 4 M/s. The Tinplate Company of India Limited proposed to be levied at the rate of two per cent on the amount of tax deducted or advance tax paid, inclusive of surcharge.” 22. The provisions of the Finance Act 2011 relevant to the Assessment Year consideration i.e. 2012-13 are also relevant. For the sake of ready is reproduced hereunder:- 2(11) The amount of income-tax as specified in sub-sections (1) to (10) and as increased by a surcharge for purposes of the Union calculated in the manner provided therein, shall be further increased by an additional surcharge for purposes of the Union, to be called the "Education Cess on tax", calculated at the rate of two per cent. of such income surcharge, so as to fulfil the commitment of the Government to provide ance universalised quality basic education. 23. A perusal of the aforesaid provisions of the Finance Act 2004 and Finance 2011 would show that it has been specifically provided that ‘education cess’ additional surcharge levied on the income-tax. Therefore, in the light of the of the Hon’ble Supreme Court in the case of “CIT Vs. K. Srinivasan” additional surcharge is part of the income-tax Hon’ble Apex Court and the provisions of Finance Act, 200 the relevant provisions of section 2(11) & (12) of the subsequent Fin have not been brought into the knowledge of the Hon’ble High Courts cases of “Sesa Goa Ltd” & “Chambal Fertilisers” (supra). Since the decisi Hon’ble Supreme Court prevails over that of the Hon’ble High Courts, th respectfully following the decision of the Hon’ble Supreme Court in the “CIT Vs. K. Srinivasan” (supra), this issue is decided against the assessee. The additional ground of assessee’s appeal is accordingly dismissed. Respectfully following the decision of the co-ordinate bench in the case of Kanoria Chemicals & Industries Ltd. (supra) Ground No. 3 of the assessee Now coming to Ground Nos. 1 & 2 in respect of issue relating to short grant of credit for Dividend Distribution Tax (DDT) paid for Rs.84,63,518/- and interest thereon . It is purely a question of fact which needs verification from the of credit for DDT paid by the assessee. The ld. A/R the short grant of credit was made in the processing of the return under the intimation by the CPC, Bangalore. We observed that ld. CIT(A) in his order reproduced the grounds of appeal including grounds for claim of short grant of credit for DDT and interest thereon vide Ground 2 & 3 raised by the assessee but failed to give any finding thereon. In respect of these two grounds the ld. A/R submitted that copy of ITA No. 437/Kol/2020 Assessment Year: 2015-16 M/s. The Tinplate Company of India Limited proposed to be levied at the rate of two per cent on the amount of tax 22. The provisions of the Finance Act 2011 relevant to the Assessment Year r the sake of ready sections (1) to (10) and as increased by a surcharge for purposes of the Union calculated in r increased by an additional surcharge for purposes of the Union, to be called the "Education Cess on tax", calculated at the rate of two per cent. of such income-tax and surcharge, so as to fulfil the commitment of the Government to provide 23. A perusal of the aforesaid provisions of the Finance Act 2004 and Finance ically provided that ‘education cess’ Therefore, in the light of the of the Hon’ble Supreme Court in the case of “CIT Vs. K. Srinivasan” tax. The aforesaid Apex Court and the provisions of Finance Act, 2004 and section 2(11) & (12) of the subsequent Finance Acts knowledge of the Hon’ble High Courts in the Fertilisers” (supra). Since the decision of the that of the Hon’ble High Courts, therefore, Hon’ble Supreme Court in the case of (supra), this issue is ional ground of assessee’s appeal is ordinate bench in the case of M/s. Ground No. 3 of the assessee is dismissed. d Nos. 1 & 2 in respect of issue relating to short grant of and interest thereon . It is purely a question of fact which needs verification from the of credit for DDT paid by the assessee. The ld. A/R submitted that the short grant of credit was made in the processing of the return under the intimation ld. CIT(A) in his order reproduced the grounds of appeal including grounds for claim of short grant of credit for DDT and interest thereon vide Ground 2 & 3 raised by the assessee but failed to give ld. A/R submitted that copy of challan evidencing payment of DDT was placed on record before the ld. CIT(A) along with copy of Form 26AS. The ld. A/R further submitted that in view of the above documentary evidence, necessary directions may be given to th grant full credit of DDT as claimed by the assessee. We find that these grounds being purely of factual nature, the order of the ld. CIT(A) is set aside and the matter is remanded back to the file of the verification of records for the claim of grant of credit for DDT paid interest u/s 115P of the Act law. 6. Ground Nos. 4 & 5 are general in nature and needs 7. In the result, the appeal of the assessee is treated as allowed for statistical purposes. Kolkata, the Sd/- [Aby T. Varkey] Judicial Member Dated: 11.02.2022 {SC SPS} Copy of the order forwarded to: 1. M/s. The Tinplate Company of India Limited 4, Bankshall Street Dalhousie Kolkata -700 001 2. Deputy Commissioner of Income Tax, (CPC) Bangalore 3. CIT(A)- 4. CIT- , 5. CIT(DR), Kolkata Benches, Kolkata. 5 M/s. The Tinplate Company of India Limited challan evidencing payment of DDT was placed on record before the ld. CIT(A) along with copy of Form 26AS. The ld. A/R further submitted that in view of the above necessary directions may be given to the Assessing Officer to grant full credit of DDT as claimed by the assessee. We find that these grounds being purely of factual nature, the order of the ld. CIT(A) is set aside and the matter is remanded back to the file of the Ld. Assessing Officer for the limited purpose of verification of records for the claim of grant of credit for DDT paid along with applicable interest u/s 115P of the Actand allow the same if found proper and in accordance with os. 4 & 5 are general in nature and needs no adjudication. In the result, the appeal of the assessee is treated as allowed for statistical Kolkata, the 11 th day of February, 2022. [Girish Ag Judicial Member Accountant Member M/s. The Tinplate Company of India Limited Deputy Commissioner of Income Tax, (CPC) Bangalore 5. CIT(DR), Kolkata Benches, Kolkata. Assistant Registrar ITAT, Kolkata Benches ITA No. 437/Kol/2020 Assessment Year: 2015-16 M/s. The Tinplate Company of India Limited challan evidencing payment of DDT was placed on record before the ld. CIT(A) along with copy of Form 26AS. The ld. A/R further submitted that in view of the above e Assessing Officer to grant full credit of DDT as claimed by the assessee. We find that these grounds being purely of factual nature, the order of the ld. CIT(A) is set aside and the matter is limited purpose of along with applicable and allow the same if found proper and in accordance with no adjudication. In the result, the appeal of the assessee is treated as allowed for statistical Sd/- Girish Agrawal] Accountant Member True copy By order Assistant Registrar/DDO ITAT, Kolkata Benches