The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) recently directed readjudication due to the Assessing Officer (AO) wrongly raising a demand on dividend distribution tax, despite the submission of proof of payment.
The AO raised a demand of Rs.15,87,620 towards dividend distribution tax under section 115O of Income Tax Act, 1961 for which the requisite payment was made on time and proof of payment was submitted. The Commissioner of Income Tax (Appeal) through NFAC had erred in not allowing the payment of Dividend Distribution Tax under Section 115O on the pretest of clerical error mentioned in the challan.
The assessee Catvision argued that a demand raised by the Assessing Officer for dividend distribution tax of Rs.15,87,620 for Assessment Year 2018-19. The assessee claims that they have already paid Rs.11,10,225 as dividend distribution tax for the same assessment year, but mistakenly mentioned the wrong assessment year (2017-18) in the challan while making the payment.
The assessee presented these facts to the CIT(A), but the CIT(A) rejected the claim for credit based on the incorrect assessment year mentioned in the challan. The assessee’s counsel argued that although the assessment year was incorrect in the challan, the taxes have been duly paid to the government, and therefore, credit should be given for the payments in relation to Assessment Year 2018-19. The counsel requested the appellate authorities to correct the mistake made by the assessee in mentioning the assessment year.
The Counsel for the assessee further submitted that the credit for such challan has not been taken in any other assessment year and the assessee is willing to file the affidavit and the indemnity bond in this regard and also such other declaration as may be called upon by the Revenue to assign credit in correct A.Y. 2018-19.
The Bench consisting of Judicial Member Chandra Mohan Garg and Accountant Member Pradip Kumar Kedia restored the matter back to the file of the AO to provide one more opportunity to Assessee and for re-examination of the issue by the AO.
The Bench further directed that the Assessing Officer should grant credit for taxes paid, in accordance with provisions of law, where the authority concerned was duly satisfied about appropriate recovery of tax and after taking due safeguards on any possible misuse of the e-challan purportedly bearing incorrect assessment year. It shall be open to the Assessee to place relevant facts and position of law before the AO to enable him to perform his quasi judicial function in accordance with law.
In result, the appeal of the assessee was allowed for statistical purposes.
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