MAHINDRA OVERSEAS INVESTMENT COMPANY (MAURITIUS) LIMITED ,MUMBAI V. ASSISTANT DIRECTOR OF INCOME TAX-CPC BENGALURU , MUMBAI

ITA 1792/MUM/2024

AI Insights

The case involves Mahindra Overseas Investment Company (Mauritius) Ltd, which appealed against the order of the CIT(A) for the assessment year 2019-20. The primary contention was the CIT(A)'s refusal to adjudicate an additional ground concerning the tax rate applied to dividend income, which the assessee argued should be 20% as per section 115A of the Income Tax Act, instead of the 40% applied. The Tribunal found that the CIT(A) should have considered the additional ground as all relevant facts were available, and the legal question raised was pertinent to the case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 32999 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2019-2020
• Other Referred Cases: Goetze India Ltd Vs. CIT, NTPC Co. Ltd Vs. CIT, CIT Vs. Prithvi Brokers & Shareholders
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEYAQAT ALI AAFAQUI
• Assessee Lawyers: YOGESH THAR; CHITANYA D. JOSHI
• Keywords: Revised return; Residential status
• Section: 250; 143(1); 22; 115A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH MUMBAI BEFORE HON’BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER & HON’BLE SMT. RENU JAUHRI, ACCOUNTANT MEMBER ITA No. 1792/Mum/2024 (Assessment Year: 2019-20) Mahindra Overseas Investment Company (Mauritius) Ltd, IFS Court Bank Street, Tnenteight, Cybercity Mauritius Vs. ACIT, Circle -7(1)(1) Aayakar Bhavan, MK Road, Mumbai PAN/GIR No. AALCM8059M (Applicant) (Respondent) Assessee by Shri Yogesh Thar & Chitanya D. Joshi Revenue by Shri Leyaqat Ali Aafaqui, Sr. AR Date of Hearing 17.03.2025 Date of Pronouncement 04.04.2025 आदेश / ORDER PER SANDEEP GOSAIN, JM: The present appeal has been filed by the assessee challenging the impugned order dated 12.02.2024 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi / CIT(A), for the A.Y 2019-20. 1. GROUND NO. 1: NON-ADJUDICATION OF ADDITIONAL GROUND BY LD. CIT(A): 2 ITA No. 1792/Mum/2024 Mahindra Overseas Investment Company (Mauritius) Ltd, Mumbai 1.1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in not entertaining / adjudicating the additional ground namely ground number 4 filed during the course of appellate proceedings for the alleged reason that the said ground is not coming from the intimation passed u/s. 143(1) which has been challenged in the said appeal. 1.2. The ld. CIT(A) failed to appreciate and ought to have considered that what has been challenged in the additional ground is the incorrect charging of tax rate applicable to dividend income of a foreign company and the same is evident from the intimation passed u/s. 143(1) and therefore the additional ground / issue arose from the said intimation only. 1.3. The Id. CIT(A) further erred in not appreciating that since all facts relevant for adjudication of additional ground were available on records, the additional ground ought to have been adjudicated on merits. 1.4. The Appellant prays that the order passed u/s. 250 declining to decide the additional ground namely ground number 4 be held to invalid and that the Id. CIT(A) be directed to decide the said additional ground on merits. WITHOUT PREJUDICE TO GROUND NO 1; 2. GROUND NO. 2: CHARGING DIVIDEND TO TAX AT THE RATE OF 40% INSTEAD OF 15% AS APPLICABLE U/S. 115A OF THE ACT: 2.1. On the facts and in the circumstances of the case and in law, the Id. AO erred in taxing the dividend received by the Appellant at the rate of 40% instead of 20% as applicable u/s, 115A of the Act. 2.2. The Id. AO failed to appreciate and ought to have considered that by virtue of s. 115A of the Act, the special rate of 20% is applicable to a foreign company irrespective of it being a tax resident in India. 3 ITA No. 1792/Mum/2024 Mahindra Overseas Investment Company (Mauritius) Ltd, Mumbai 2.3. The Appellant, therefore, prays that the dividend offered to tax by the Appellant be taxed at the rate of 20% applying provisions of s. 115A of the Act. GENERAL The Appellant craves leaves to add to, alter and/or amend any or all of the above grounds of appeal during the course of appellate proceedings, if deemed appropriate. 2. Ground No.1 raised by the assessee relates to challenging the order of Ld. CIT(A) in non-adjudication of additional ground taken by the assessee before Ld. CIT(A) In this regard, we have heard the counsels for both the parties, perused the material placed on record, judgements cited before us and the orders passed by the revenue authorities. 3. From the records, we noticed that during the appellate proceedings, an additional ground of appeal regarding taxation of dividend @40% instead of @20% as per section 115A of the income tax act was taken, but the same was dismissed by holding that no adjustment has been made in the order u/s 143(1) of the act and the additional ground raised is not coming out of the order passed u/s 143(1) of the act. 4 ITA No. 1792/Mum/2024 Mahindra Overseas Investment Company (Mauritius) Ltd, Mumbai 4. Ld. DR argued that even an additional ground cannot be entertained by Ld. CIT(A) since the assessee has not filed the revised return and supported his arguments by referring to the decision of Hon’ble Supreme Court in the case of Goetze India Ltd Vs. CIT 2006, 284 ITR 323 (SC). 5. In this regard Ld. AR appearing on behalf of the assessee drawn our attention towards documents filed by the assessee before the revenue authorities which comprises of Return Of Income which is at paper book page No. 1 to 97 in the said return the entire facts are contained with regard to type of company, residential status, schedule of profit and loss account containing dividend income, details of income from other sources, intimation u/s 143(1) of the Act, which is at paper book page No. 99. 6. After having heard both the parties at length, we are of the view that assessee can take additional ground if it is legal in question and all the relevant material is available before the authorities for adjudicating the same as has been held by Hon’ble Supreme Court in the case of NTPC Co. Ltd Vs. CIT [1998] 229 ITR 383, Ho’ble Jurisdictional High Court in the case of CIT Vs. Prithvi Brokers & Shareholders [2012] 349 ITR 336 (Bombay) has discussed the legal proposition as regarding raising the additional claim and Hon’ble Bombay High Court has 5 ITA No. 1792/Mum/2024 Mahindra Overseas Investment Company (Mauritius) Ltd, Mumbai categorically held that assessee can raise a fresh claim before the appellate authorities for the first time even without filing a revised return. Moreover, Hon’ble High Court at para No. 22 and 23 has specifically observed that the Hon’ble Supreme Court in the case of Goetze India Ltd (supra) was dealing only with the powers of AO and not with those of the appellate authorities for entertaining the additional claims. Therefore in our considered view, Ld. CIT(A) should have entertained and adjudicated the additional grounds raised by the assessee which is legal in nature and all the required documents for adjudicating the same were already available before him. 7. Be that as it may, keeping in view, the principles laid down by the higher judicial authorities, we admit the additional ground raised by the assessee before Ld. CIT(A) and while setting aside the impugned order, restore the matter back to the file of Ld. CIT(A), with the directions to adjudicate the same on merits. Ld. CIT(A) can also call for any other documents if necessary for the disposal of the additional ground. 8. Before parting, we make it clear that our decision to restore the matter back to the file of the Ld. CIT(A) shall in no way be construed as having any reflection or expression 6 ITA No. 1792/Mum/2024 Mahindra Overseas Investment Company (Mauritius) Ltd, Mumbai on the merits of the dispute which shall be adjudicated by the Ld.CIT(A) independently in accordance with law. 9. In the result the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 04.04.2025. Sd/- Sd/- (RENU JAUHRI) (SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 04/04/2025 KRK, PS आदेश की \bितिलिप अ\u000eेिषत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. \u000eथ / The Respondent. 3. संबंिधत आयकर आयु\u0019 / The CIT(A) 4. आयकर आयु\u0019(अपील) / Concerned CIT 5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, मु\u0003बई / DR, ITAT, Mumbai 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, स\u000eािपत ित //True Copy// 1. उप/सहायक पंजीकार ( Asst. Registrar) आयकर अपीलीय अिधकरण, मु\u0003बई मु\u0003बई मु\u0003बई मु\u0003बई / ITAT, Mumbai "