TaxTMI 
TaxTMI 
2025 (4) TMI 273
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....esent appeal against the Order No. ITBA/APL/S/250/2022- 23/1046539878(1) dated 31.10.2022 ('the Impugned Order) wherein the learned Commissioner of Income Tax (Appeals), Delhi-42 (Ld. Commissioner (Appeals)) without considering the facts of the case and the provisions of income-Tax Act, 1961 (the Act') relevant rules made thereunder and applicable case laws has inter-alia held that the Central Processing Centre (CPC) has not committed any error in rejecting Rectification Application filed under Section 154 of the Act by the Appellant vide Order date 04.01.2022. On the facts and in the circumstances of the case and in law, the Ld. Commissioner (Appeals) has grossly errored in passing the Impugned Order wherein it has been erroneously and without any basis in law and facts of the case observed that: i. The Appellant has not filed proper rectification application with CPC; ii. The Appellant has failed to show that relevant conditions for applicability of lower rate of 5% on the subject interest income in accordance with provisions of Section 115A read with Section 194LC of the Act were satisfied in the instant case; iii. It is not settled yet that Appellant is entitled....
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....er Section 154 of the Act and therefore on this ground alone the Impugned Order ought to be set aside. E. That the Ld. Commissioner failed to appreciate that the Appellant is entitled to claim beneficial rate of 5% as the Appellant satisfied all the conditions for claiming beneficial rate under Section 115A read with Section 194LC of the Income Tax Act, which are tabulated as below: Sr. No. Conditions as per Section 115A Remarks- Satisfaction of the conditions by and Section 194LC of the the Appellant Remarks- Satisfaction of the Conditions by the Appellant i Interest must be payable to a non-resident Interest is paid to the Appellant Le a non-resident foreign company, hence this condition was satisfied fully. ii The money is borrowed in foreign currency from a source outside India The money was borrowed in foreign currency from a source outside India Le. Netherlands. Money was received in India in foreign currency and thereafter the foreign currency was converted into Indian rupees by the Authorised Dealer Bank for the purpose of crediting to the bank account of Axalta India. Hence this condition was satisfied fully. iii Borrowing is done under a loan agreement....
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....iming the beneficial rate of 5% under Section 115A read with 194LC of the Act and in support of its submissions the Appellant had also submitted relevant documentary proofs. However, the Ld. Commissioner (Appeals) completely ignored the submissions of the Appellant and without any basis concluded that the Appellant has failed to show that relevant conditions for applicability of lower rate of 5% on the subject interest income in accordance with provisions of Section 115A read with Section 194LC of the Act were satisfied in the instant case, whereas there were sufficient proofs before the Ld. Commissioner (Appeals) that the Appellant had duly fulfilled all the conditions for claiming beneficial rate of tax. It is settled principal of law that an order should be passed after examining the contentions raised in an appeal and not otherwise. Therefore, the Impugned Order is passed without application of mind, and it is liable to be set aside on this ground itself. G. That a reading of the Impugned Order makes it evident that the Ld. Commissioner (Appeals) has failed to appreciate the facts and documents submitted and the Impugned Order was passed with a pre-meditated mindset to reject....
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....cts and law, the Impugned Order ought to be set aside on this ground alone. That pendency of application for advance ruling cannot be a ground for denying the statutory entitlement of beneficial tax rate to the Appellant, and specifically where the application is pending more than six months. In view of Section 245R (6) of the Act, the Authority is bound to pronounce advance ruling in writing within six months of the receipt of application, therefore the Ld. Commissioner erroneously denied the statutory benefit to the Appellant on flimsy ground hence the Impugned Order ought to be set aside on this ground. J. That the Ld. Commissioner (Appeals) has failed to appreciate that offering the income to higher rate of tax was on account an inadvertent error on part of the Appellant and it cannot be basis of collection of excess tax. Further, the Ld. Commissioner (Appeals) failed to appreciate that on the basis of an inadvertent error in the return of income, the Appellant cannot be deprived of benefit of lower tax rate provided by the provisions of the Act, hence the Impugned Order ought to be set aside. K. That the Ld. Commissioner (Appeals) had failed to appreciate that the Appell....
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....at or before the appeal hearing. 4. Both the parties next invited our attention to the CIT(A)'s lower appellate discussion reading as under: - "8. Ground no. 2 is against the intimation issued by CPC taxing the interest income @ 10% as per Article 11 of the India-Netherlands Tax Treaty. 8.1 It is contended that the interest income was taxable @5% in accordance with provisions of section 115A read with section 194LC of the Act. 8.2 It is an admitted fact that the appellant had itself offered the interest income @ 10% in the return of income filed with the CPC. It is also an admitted fact that the appellant had never filed any revised return upon discovery of any mistake or omission in the return so filed. Further, it is observed that the appellant never filed any proper rectification application with the CPC in so far that the computation of tax was never revised by it but only re-processing of the return was sought u/s 154 from the CPC. 8.3 It is also observed that the appellant has failed to show that the relevant conditions for applicability of lower rate of 5% on the subject interest income in accordance with the provisions of section 115A read with section 194LC of the....