DCIT 1(2), MUMBAI V. LIC NOMURA MUTUAL FUND ASSET MANAGEMENT CO.LTD, MUMBAI

ITA 5068/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3811 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 31-03-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 04-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR PRAMOD NIKALJE
• Assessee Lawyers: S VENKATRAMA N
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A , MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI JOGINDER SINGH , JUDICIAL MEMBER ITA NO. 5068/MUM/2013 : (A.Y : 20 1 0 - 11 ) D.C.I.T 1(2), MUMBAI (APPELLANT) VS M/S. LIC NOMURA MUTUAL FUND ASSET MANAGEMENT CO. LTD., INDUSTRIAL ASSURANCE BLDG., 4 TH FLOOR, OPP. CHURCHGATE STATION, MUMBAI 400 020 (RESPONDENT) PAN : AAACJ1166H APPELLANT BY : DR. PRAMOD NIKALJE RESPONDENT BY : SHRI S. VENKATRAMAN DATE OF HEARING : 03/02/2016 DATE OF PRONOUNCEMENT : 24 /02/2016 O R D E R PER G.S. PANNU , A M : THE CAPTIONED APPEAL BY THE R EVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - 2, MUMBAI DATED 19/04/2013, PERTAINING TO THE ASSESSMENT YEAR 2010 - 11, WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER DATED 04/02/2013 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IN THIS APPEAL, THE R EVENUE HAS RAISED THE FOLLOWING G ROUNDS OF APPEAL : 2 M/S. LIC NOMURA MUTUAL FUND AMC ITA NO. 5068/MUM/2013 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE CIT(A) ERRED IN ENTERTAINING AND ADJUDICATING THE ISSUE OF DIVIDEND DISTRIBUTION TAX AS NEITHER THE ASSESSING OFFICER HAS ANY POWER TO PASS AN ORDER NOR SUCH AN ORDER HAS BEEN PASSED AGAINST WHICH APPEAL COULD HAVE BEEN PREFERRED. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ALSO ERRED IN NOT APPRECIATING THAT U/S 115Q ASSESSING OFFICER HAS THE POWER TO DEEM AN ASSESSEE IN DEFAULT FOR NON - PAYMENT OF DIVIDEND DISTRIBUTION TAX AND THEREBY ISSUING NOTICE OF DEMAND. 3. SUBSTANTIVELY SPEAKING, THE ONLY ISSUE IN THIS APPEAL RELATES TO THE DETERMINATION OF TAX ON DIVIDEND DISTRIBUTED BY THE ASSESSEE - COMPANY IN TERMS OF SEC. 115O OF THE ACT. IN BRIEF, THE RELEVANT FACTS ARE THAT THE RESPONDENT - ASSESSEE IS A COMPANY INCOR PORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 AND IS AN ASSET MANAGEMENT COMPANY PROVIDING SERVICES TO LIC MUTUAL FUND. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION , IT FILED A RETURN OF INCOME DECLARING A TOTAL INCOME OF RS.111,52,05,892/ - WHICH WAS SUBJECT TO SCRUTINY ASSESSMENT. IN THE ASSESSMENT FINALIZED U/S 143(3) OF THE ACT DATED 04.02.2013, THE TOTAL INCOME WAS ASSESSED AT RS.112,77,86,712/ - AFTER MAKING CERTAIN ADDITIONS/DISALLOWANCES WHICH ARE NOT THE SUBJECT MATTER OF CONTROVERSY BEFOR E US. FOR OUR PURPOSE, THE RELEVANT FACT IS THAT IN THE RETURN OF INCOME FILED, THE ASSESSEE - COMPANY REFLECTED THE AMOUNT OF DIVIDEND DISTRIBUTED AT RS. 75 CRORES INSTEAD OF THE CORRECT AMOUNT OF RS. 7.5 CRORES. ON ACCOUNT OF SUCH A MISTAKE IN THE RETURN OF INCOME, THE ASSESSING OFFICER IN THE I NCOME T AX C OMPUTATION F ORM (I.E. ITNS 150) ANNEXED TO THE ASSESSMENT ORDER, DETERMINED THE TAX ON DIVIDEND DISTRIBUTION IN TERMS OF SEC. 115O OF THE ACT AT RS.13,43,45,475/ - AS AGAINST THE CORRECT LIABILITY OF RS.1 ,27,46,250/ - . THE ADDITIONAL TAX 3 M/S. LIC NOMURA MUTUAL FUND AMC ITA NO. 5068/MUM/2013 LIABILITY DETERMINED BY THE ASSESSING OFFICER WAS CARRIED IN APPEAL BEFORE THE CIT(A). 4. THE CIT(A) CONSIDERING THE FACT - POSITION BROUGHT OUT BY THE ASSESSEE CONCLUDED THAT IT WAS ONLY ON ACCOUNT OF A CLERICAL MISTAKE TH AT THE DIVIDEND PAID WAS MENTIONED IN THE RETURN OF INCOME AT RS. 75 CRORES INSTEAD OF THE CORRECT FIGURE OF RS. 7.5 CRORES. HE, THEREFORE, CONCLUDED THAT THE DIVIDEND DISTRIBUTED BY THE ASSESSEE - COMPANY LIABLE FOR TAX DETERMINATION U/S. 115O OF THE ACT W AS TO BE TAKEN AS RS. 7.5 CRORES AND NOT RS. 75 CRORES. AGAINST SUCH A DECISION OF THE CIT(A) , THE R EVENUE IS IN APPEAL BEFORE US. 5. AT THE TIME OF HEARING , THE LD. DR APPEARING FOR THE R EVENUE HAS NOT POINTED OUT ANY COGENT MATERIAL OR REASONING WHICH WOULD REQUIRE US TO INTERFERE WITH THE FINDING OF THE CIT(A) THAT THE ACTUAL DIVIDEND DISTRIBUTED BY THE ASSESSEE - COMPANY WA S ONLY RS. 7.5 CRORES AND NOT RS.75 CRORES. IT IS ALSO EMERGING FROM A READING OF THE ORDER OF THE CIT(A), ESPECIALLY PARA S 3.7 TO 3.9, THAT THE FINDING OF THE CIT(A) IS BASED ON THE UNDISPUTED MATERIAL BROUGHT OUT BY THE ASSESSEE. THUS, ON THIS ASPECT OF THE MATTER WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). 6. HOWEVER, IN ORDER TO IMPART COMPLETENESS TO THIS ORDER , WE MAY NOW ADDRESS THE SPECIFIC POINT MANIFESTED IN THE AFORESTATED G ROUNDS OF APPEAL RAISED BY THE R EVENUE. THE POINT OF THE R EVENUE RAISED IN G ROUND OF APPEAL NO. 1 IS TO THE EFFECT THAT THE CIT(A) COULD NOT HAVE ENTERTAINED AND ADJUDICATED THE GRIEVA NCE OF THE ASSESSEE ON WRONG DETERMINATION OF TAX LIABILITY OF DIVIDEND DISTRIBUTED U/S. 115O OF THE ACT 4 M/S. LIC NOMURA MUTUAL FUND AMC ITA NO. 5068/MUM/2013 AS THE ASSESSING OFFICER HAS NOT PASSED SUCH AN ORDER. IN OTHER WORDS, AS PER THE R EVENUE THE ASSESSING OFFICER HAS NO POWER TO PASS AN ORDER AND NOR SUCH AN ORDER HAS BEEN PASSED IN THE PRESENT CASE. 7. IN OUR CONSIDERED OPINION, THE AFORESTATED PLEA OF THE R EVENUE IS MISCONCEIVED, BOTH ON FACTS AND IN LAW. OSTENSIBLY , AT PAGE S 78 AND 79 OF THE P APER B OOK IS PLACED A COPY OF I NCOME T AX C OMPUTATION F ORM (I.E. ITNS 150) WHICH IS ANNEXED TO THE ASSESSMENT ORDER U/S. 143(3) AND IS SIGNED BY THE ASSESSING OFFICER. THE SAID I NCOME T AX C OMPUTATION F ORM CLEARLY ENUMERATES THE TAX LIABILITY ON THE PROFITS DISTRIBUTED BY THE ASSESSEE - COMPANY. MOREOVER, AS CO RRECTLY BROUGHT OUT BY THE LEARNED REPRESENTATIVE FOR THE ASSESSEE, THE JUDGEMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF KALYANKUMAR RAY V. CIT, 191 ITR 634 (SC) CLEARLY POSTULATES THAT THE I NCOME T AX C OMPUTATION F ORM WHICH IS SIGNED BY THE ASSESSING OFFICER IS ALSO TO BE UNDERSTOOD AS AN ORDER IN WRITING PASSED BY THE ASSESSING OFFICER DETERMINING THE TAX LIABILITY WITHIN THE MEANING OF SEC. 143(3) OF THE ACT. CONSIDERED IN THIS LIGHT, IN OUR VIEW , THE CIT(A) WAS QUITE JUSTIFIED IN ADJUDICATING THE IMPUGNED PLEA OF THE ASSESSEE WHEREBY THE ASSESSEE HAD SOUGHT TO DENY HIS LIABILITY ON THE AMOUNT OF TAX DETERMINED BY THE ASSESSING OFFICER UNDER SEC. 115O OF THE ACT IN THE INCOME TAX COMPUTATION FORM ANNEXED TO THE ASSESSMENT ORDER . THUS, ON THIS ASPE CT WE FIND NO REASON TO UPHOLD THE PLEA OF THE R EVENUE. 8. IN FACT, A READING OF THE G ROUND OF APPEAL NO. 2 SHOWS THAT THE R EVENUE ACCEPTS THE POSITION THAT THE ASSESSING OFFICER HAS THE POWER TO DEEM AN ASSESSEE IN DEFAULT FOR NON - PAYMENT OF DIVIDEND DIS TRIBUTION TAX AND THEREBY ISSUING A NOTICE OF DEMAND. IN OUR CONSIDERED OPINION THE 5 M/S. LIC NOMURA MUTUAL FUND AMC ITA NO. 5068/MUM/2013 G ROUND OF APPEAL RAISED BY THE R EVENUE IS CONTRARY TO UNDERSTANDING SOUGHT TO BE CONVEYED IN GROUND NO. 1 AND , THUS HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CAS E AND ALSO THE POSITION IN LAW , THE GROUND OF APPEAL NO. 2 IS MISPLACED. THE SAME IS HEREBY DISMISSED. 9. ACCORDINGLY, THE APPEAL OF THE R EVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 4 T H FEBRUARY, 2016. SD/ - SD/ - ( JOGINDER SINGH ) JUDICIAL MEMBER ( G.S. PANNU ) ACCOUNTANT MEMBER MUMBAI, DATE : 2 4 T H FEBRUARY , 2016 COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, A BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR *SSL* I.T.A.T, MUMBAI