TaxTMI 
TaxTMI 
2024 (7) TMI 1139
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....dated Assessment Order dated Remarks 1. ITA No.1136/Del/2023 Assessee 2005-06 CIT(A)-30, New Delhi order dated 20.02.2023 Assessment order dated 26.11.2021 Assessment Order under section 237 of the Income Tax Act, 1961. 2 ITA No.1137/Del/2023 Assessee 2006-07 CIT(A)-30, New Delhi order dated 20.02.2023 Assessment order dated 26.11.2021 Assessment Order under section 237 of the Income Tax Act, 1961. 3. ITA No.1138/Del/2023 Assessee 2009-10 CIT(A)-30, New Delhi order dated 20.02.2023 Assessment order dated 26.11.2021 Assessment Order under section 237 of the Income Tax Act, 1961. 4. ITA No.1139/Del/2023 Assessee 2011-12 CIT(A)-30, New Delhi order dated 20.02.2....
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....s of Section 115O of the Act. Similar payments by way of DDT were paid by the assessee company on distribution of dividend for different assessment years under captioned appeals. 2.2 The assessee moved an application dated 18.02.2019 under Section 237 of the Act before the AO seeking refund due to excess payment of DDT for all such years. To contend excess tax paid by way of DDT, the assessee pointed out before the AO that while the DDT has to be paid as per the rates [12.5% plus surcharge etc. which was enhanced to 15% + surcharge etc from AY 2007-08] prescribed under Section 115-O of the Act, the Article-10 of Indo-Mauritius Treaty provides for taxation on dividend distribution at a lower rate of 5% qua the rate prescribed under Sectio....
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....claim refund in the absence of any revised return filed in this regard. The application moved under Section 237 was thus rejected. 4. Aggrieved, the assessee preferred appeal before the CIT(A). The CIT(A) also declined to interfere with the action of the AO for varied reasons. The relevant operative paragraph of the order of the CIT(A) is reproduced hereunder: "7.3 On careful perusal of the facts on records and the legal position, it is observed:- (a) The dividend is an income in the hands of the shareholders not in the hands of the appellant. (b) Provisions of Section 115-O were included in the statute to collect the taxes at the time of declaration/distribution of dividend by the domestic companies for the ad....
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....itius) has paid DDT at applicable rates ranging between 12.5% to 15% + surcharge + cess under Section 115-O of the Act instead of 5% applicable to residents of Mauritius in terms of Article 10(2)(a) of Indo-Mauritius DTAA on dividend payment. The ld. counsel submitted that shareholder M/s. Peri Mauritius being a tax resident of Mauritius, the tax liability on dividend stands @ 5% only as per India Mauritius DTAA. The excess tax paid by the assessee while making the distribution of dividend under Section 115-O of the Act is thus liable to refund under Section 237 of the Act. The ld. counsel adverted to provisions of Section 237 of the Act, Section 115-O of the Act and Article 10 of DTAA to contend that the revenue authorities were not justif....
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....distributed profits. Thus, the assessee in the instant case has paid distribution tax at specified rate as provided under Section 115-O owing to special provision. There is no legal obligation to pay tax upon the shareholder who is recipient of the dividend income in view of Section 115-O of the Act notwithstanding default, if committed, in payment of DDT by the Domestic Company distributing dividend. The payment of DDT thus is not on behalf of the shareholder but owing to obligation squarely placed upon the domestic company distributing profits by way of dividend. The payment of tax is to be regarded as additional income tax on account of distribution of profits in distinction to vicarious liability of payment of tax on behalf of sharehold....
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....rities have wrongfully retained excess tax paid on remittance of dividend and thus wrongfully denied the benefit of treaty available to the assessee. 10. We straightaway take note of the special bench decision in the case of Total Oil (supra). In that case, the assessee M/s Total Oil India Private Ltd., an Indian Co., declared/paid dividend for AY 2016-17. One of the shareholders to whom dividend was to be paid was a Non Resident (Tax resident of France). Similar plea was raised in that case that the rate at which tax under 115-O of the Act had to be paid could not be more than the rate at which dividend could be taxed in the hands of the Non Resident shareholder in India under the DTAA between India and France as the rate of tax prescri....