TaxTMI 
TaxTMI 
2025 (7) TMI 599
X X X X Extracts X X X X
X X X X Extracts X X X X
....section 144B of the Act, date of order 22/03/2024 for A.Y. 2018-19. 2. All the three appeals have same nature of facts and common issue; so all the appeals were heard together and are being disposed of by this common order. ITA No.2843/Mum/2025, AY 2017-18 3. In relation to AY2017-18, it was submitted that HDFC Ergo General Insurance Company Limited merged with HDFC General Insurance Company Limited (formerly known as L&T General Insurance Company Limited). The appointed date of the merger was approved by the Insurance Regulatory and Development Authority of India (IRDA) through its approval letter dated 14/08/2017. Subsequently, the name of the merged entity was changed from HDFC General Insurance Company Limited to HDFC Ergo General Insurance Company Limited. 4. During the assessment proceedings, HDFC Ergo General Insurance Company Limited was assessed under Section 143(3) of the Act, vide order dated 30/12/2019, wherein additions were made under various heads. Meanwhile, another appeal was also filed before the Ld. CIT(A) by an entity bearing the name 'HDFC Ergo General Insurance Company Limited', challenging the same assessment order. Due to the identical names of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt to show cause as to why the proposed variation should not be made thereby violating the principles of natural justice and not adhering to the Notification S.O. 741(Ε) (ΝΟ. 6/2021/F. NO. 370149/154/2019- TPL], dated 17-Feb-21 in respect of Faceless Assessment (First Amendment) Scheme, 2021 ["the Scheme, 2021"]. 3. The Order of the CIT(A) dated 28-Feb-25 passed under section 250 of the Act is bad in law since the same was passed based on the submissions made by the appellant for appeal preferred for Assessment Year 2014-15 ("AY 14-15") without providing the appellant sufficient opportunity, thereby violating principles of natural justice. 4. The CIT(A) erred in confirming the disallowance of Rs. 2,80,592 [INR 2,69,164 being sum received by the Appellant from employees on account of contribution to Employee State Insurance Commissions ("ESIC") and INR 11,428 being sum received by the Appellant from employees on account of contribution to Labour Welfare Fund ("LWF")] under section 43B of the Act having failed to appreciate that that the sum of INR 2,80,592 was contributed to ESIC and LWF before the due date of filing the return of income for AY18....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er in relation to Ground Nos. 3, 5,6 and 8 be restored to the file of the Ld. CIT(A) for proper adjudication. 9. The Ld. DR did not raise any objection to the submissions made by the Ld. AR. 10. We have heard the rival submissions and perused the material available on record. In our considered view, the Ld. CIT(A) has passed the order without considering the assessee's submissions and without adjudicating the matter on merits. Therefore, Ground Nos. 3, 5 and 8 are restored to the file of the Ld. CIT(A) for fresh adjudication. The Ld. CIT(A) is directed to pass a speaking order after affording a reasonable opportunity of being heard to the assessee. We shall adjudicate Ground No. 6 along with ITA No. 2870/Mum/2025 jointly at a later stage in this order, as the issue pertains to DDT under Section 115-O, which has been claimed for relief under the provisions of the applicable DTAA. 11. Ground No. 7 is consequential in nature and does not require separate adjudication. 12. Ground No. 4 pertains to the delayed payment of employees' contribution to statutory funds, namely Rs. 2,69,164/- under ESIC and Rs. 11,428/- under the Labour Welfare Fund, aggregating to Rs. 2,80,592/-, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....25). 16. Subsequently, based on the coordinate bench decision in JCIT (LTU) v. Texas Instruments (India) Pvt Ltd, IT(TP)A No. 275/Bang/2019 (A.Y. 2011-12), dated 11.03.2022, the assessee, as a matter of alternate efficacious remedy, filed a fresh appeal before the Ld. CIT(A) challenging the levy of DDT at 20.35765% instead of the DTAA-prescribed 10%. The Bangalore Bench, in Texas Instruments (India) Pvt Ltd, held that since DDT liability under Section 115-O does not form part of the assessment of total income under Section 143(3), a separate appeal before the CIT(A) is maintainable under Section 246A, on the ground that the assessee "denies its liability to be assessed under this Act." The order also discussed other binding precedents including Genpact India Pvt Ltd v. DCIT [(2019) 111 taxmann.com 402 (SC)], where the Hon'ble Supreme Court held that an assessee can challenge tax liability under special charging provisions such as Section 115QA by filing a separate appeal under Section 246A. The Tribunal, in Texas Instruments, further clarified that the DDT, being an additional tax not linked to computation of total income, does not fall within the purview of Section 143(3) as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the Act or raising any additional demand. In this context, the bench asked the Ld A.R as to how the issue of DDT can be said to arise out of the impugned assessment order and whether the assessee can raise additional ground relating to the same in the present appeal, when no discussion is there on DDT liability. 4.4 The Ld A.R heavily placed his reliance on the decision rendered by Hon'ble Supreme Court in the case of Genpact India (P) Ltd (2019)(111 taxmann.com402) and submitted that the Hon'ble Supreme Court has held that the additional tax payable u/s 115QA can be challenged u/s 246A under the clause "an order against the assessee where the assessee denies his liability". He submitted that the Hon'ble Supreme Court did not lay down proposition that there has to be a separate appeal filed before Ld CIT(A) for the liability u/s 115QA. He further submitted that the Hon'ble Supreme Court did not advert to the point that the "denial of liability to tax" may not be a subject matter of the assessment proceedings u/s 143(3) and it did not put a bar on raising the said issue as an additional ground in the appeal filed against the assessment order passed u/s 14....
X X X X Extracts X X X X
X X X X Extracts X X X X
....can be noticed from section 5, it talks about the income received or deemed to be received or accrued or deemed to accrue or arise. Thus when the assessing officer is determining "total income" of the assessee, he is required to look into the income received or deemed to be received or accrued or deemed to accrue or arise. On the contrary, it can be noticed that the DDT is a "tax payable on the distribution of dividend and it is in no way connected to the determination of "total income". The appeal filed by the assessee before us is related to the "determination of total income" u/s 143(3) of the Act. 4.9 Now the question that arises is whether the assessee can raise the issue relating to payment of DDT in an appellate proceeding relating to determination of total income u/s 143(3) of the Act. We notice that the Hon'ble Delhi Court in the case of Genpact India (P) Ltd vs. DCIT (2019)(108 taxmann.com 340) dealt with a writ petition filed before it by the assessee challenging the demand raised u/s 115QA of the Act, which relates to tax on distributed income by way of buy back of shares. The writ petition was filed on the reasoning that the Income tax Act does not provide....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the assessee denies his liability to be assessed under this Act". mentioned in clause (a) of sub. Section (1) of sec. 246A of the Act. Since the DDT payable u/s 115-0 of the Act is an additional tax liability akin to the tax payable u/s 115QA of the Act, there should not be any dispute that the assessee can challenge the liability imposed on it u/s 115-0 of the Act as held by Hon'ble Supreme Court in the case of Genpact India P Ltd (supra). 4.11 However, the question that arises is whether the assessee can challenged the liability u/s 115-0 of the Act by raising an additional ground in the appeal filed against the assessment order passed u/s 143(3) of the Act. It is pertinent to note that clause (a) of sub. Sec. (1) of sec. 246A contains various types of the orders passed by the tax authorities which, inter alia, includes (a) an order against the assessee where the assessee denies his liability to be assessed under this Act and (b) any order of assessment under sub-section (3) of section 143. Thus the grievance of the assessee on DDT liability falls under different class of liabilities mentioned in sec. 246A of the Act. Further, Sec. 246A pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... fresh appeal before the Ld. CIT(A) with a request for condonation of delay, reiterating the same legal position and enclosing a detailed "Statement of Facts," which is reproduced as follows: "STATEMENT OF FACTS This is an appeal before the Hon'ble Commissioner of Income Tax (Appeals), National Faceless Appeal Centre ['CIT(A)'] against the assessment order dated 22-Apr-21 passed by the Assessing officer ('Ld AO') under section 143(3) read with section 115-0 of the Income-tax Act, 1961 ('the Act') in case of HDFC ERGO General Insurance Company Limited ('HDFC ERGO' or 'the Appellant or 'the Company') for AY 18-19 relevant to Financial Year ('FY') 1718. 1. The Appellant is a joint venture between HDFC Ltd, India's premier Housing Finance Institution and ERGO International AG, the primary insurance entity of Munich Re Group. 2. The Appellant filed its original Return of Income ('ROI') for the captioned year on 23-Nov-18 vide e-filing acknowledgement no. 379397491231118 under section 139(1) of the Act declaring a total income of INR 96,40,64,290 and duly paid taxes on the same. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Hon'ble Bangalore ITAT in case of Texas Instruments (supro), as a matter of good compliance, the Appellant is filing the present appeal before the Hon'ble CIT(A) with a request for condoning the delay for not filing a separate appeal within the prescribed time limit. 9. There is no change in the existing appeal filed before the Hon'ble CIT(A) and once this appeal is admitted, the Appellant shall not press the ground on DDT in the appeal filed before Hon'ble CIT(A) in Appeal No. NFAC/2017-18/10020556. 10. The said issue of DDT refund is squarely covered by the favourable decision of Delhi Bench of the Hon'ble ITAT in case of Giesecke & Devrient [India) Pvt Ltd (ITA No. 7075/DEL/2017) wherein it has been held that the DDT rate under the Act should not exceed the tax rates specified in Article 10 of the DTAA (i.e. 10% as mentioned in Article 10 of the India-Germany DTAA). In the present case too, the DTAA under consideration is the same ie. India-Germany DTAA. This issue does not require any investigation into fresh facts and is purely legal in nature. Accordingly, following the said decision which is binding on the Hon'ble CIT(A), the said ....