TaxTMI 
TaxTMI 
2010 (9) TMI 721
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....cts and circumstances of the case, the learned CIT(A) is justified in quashing the order dated 16.01.2008 passed under section 154 of the Act. 3. Brief facts relevant to the issue are that the assessee filed its return of income on 28.10.2003 declaring total income at Rs.8,43,762/-. The return was processed under section 143(1) and thereafter the scrutiny assessment under section 143(3) was passed on 30.09.2005. The order giving effect to the order of the CIT(A) was also passed on 17.08.2006. Thereafter, the AO proposed to withdraw the deduction under section 80M of Rs, 30,00,050/- by invoking the provisions of section 154 of the Act. The AO observed that during the year the assessee received the dividend income o....
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....and thereby applicable to the assessment year under consideration. He has further contended that when the AO in the original assessment overlooked to apply the provisions of section 115-O then it is apparent mistake on the face of the assessment order and the same can be rectified by invoking the provisions of section 154 of the Act. He has relied upon the order of the AO. 6. On the other hand, the learned AR of the assessee has submitted that the issue of deduction under section 80M as well as dividend distribution tax under section 115O is a highly complex and debatable issue, therefore, the same cannot be held as apparent error or mistake on the face of the record which can be rectified under section 154. He has further co....
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....s. 115-O. [(1) Notwithstanding anything contained in any other provision of this Act and subject to the provisions of this section, in addition to the income-tax chargeable in respect of the total income of a domestic company for any assessment year, any amount declared, distributed or paid by such company by way of dividends (whether interim or otherwise) on or after the 1st day of April, 2003, whether out of current or accumulated profits shall be charged to additional income-tax (hereafter referred to as tax on distributed profits) at the rate of [fifteen] per cent.] [(1A) The amount referred to in sub-section (1) shall be reduced by,- (i) the amount of dividend, if any, received by the domestic company during the financial year....
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.... any other person in respect of the amount of tax so paid. (5) No deduction under any other provision of this Act shall be allowed to the company or a shareholder in respect of the amount which has been charged to tax under sub-section (1) or the tax thereon. [(6) Notwithstanding anything contained in this section, no tax on distributed profits shall be chargeable in respect of the total income of an undertaking or enterprise engaged in developing or developing and operating or developing, operating and maintaining a Special Economic Zone for any assessment year on any amount declared, distributed or paid by such Developer or enterprise, by way of dividends (whether interim or otherwise) on or after the 1st day of April, 2005 out of i....
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....115-O(1), then the disallowance of deduction u/s 80M by applying the provisions is not a question which can be decided u/s 154 of the Act. The honourable jurisdictional High Court in the case of Godrej Agrovet ltd V/s DCIT (Supra) in paragraph 11 has held as under: "11. On these facts as they stand, it is impossible to contend that the assessee was not entitled to a deduction under section 80M. Significantly, the view of the AO was consistent with the decision of the Tribunal in the case of Castle Investment (supra). The judgment in Castle Investment in so far as is material held that section 115-O(5) does not in any way restrict the allowability of the claim under section 80M. Under section 80M, what is claimed as a de....