Intertek India Private Limited Vs ACIT (ITAT Delhi)
One-Day PF Delay Due to Technical Glitch Excused; DTAA Rate Applies to DDT on UK Dividend — ITAT Grants Multi-Issue Relief
The Delhi Bench “B” of the ITAT, in Intertek India Pvt. Ltd. v. ACIT (AYs 2016-17 & 2017-18), granted substantial relief to the assessee on multiple issues relating to employees’ PF contribution, dividend distribution tax (DDT), treaty benefit, and TDS credit, partly allowing both appeals.
For AY 2016-17, the Tribunal deleted the disallowance of ₹33.39 lakh towards employees’ contribution to PF, where payment was delayed by one day due to technical glitches in the PF payment portal. The ITAT noted that screenshots evidencing gateway failure, contemporaneous email to the PF grievance cell, and issuance of cheque on the due date clearly established bona fide intent and impossibility of performance. Applying the maxim lex non cogit ad impossibilia, the Tribunal held that the Supreme Court ruling in Checkmate Services was factually distinguishable, and directed allowance of the deduction.
On a significant international tax issue, the ITAT allowed the assessee’s claim for refund of excess DDT, holding that dividends paid to the UK parent company were eligible for the beneficial 10% tax rate under Article 11 of the India-UK DTAA, overriding section 115-O. The Tribunal followed the Bombay High Court judgment in Total Oil India Pvt. Ltd. (2025), which reversed the earlier Special Bench view, and held that treaty protection applies even in the DDT regime. The AO was directed to refund the excess DDT paid.
The Tribunal also directed the AO to grant TDS credit as per the revised return, subject to verification, and held that interest under section 234B was purely consequential. Grounds relating to MAT computation were treated as not pressed, and initiation of penalty proceedings under section 271(1)(c) was rendered academic.
For AY 2017-18, the ITAT applied the same reasoning mutatis mutandis (except the PF issue), and granted corresponding relief.
Accordingly, both appeals were partly allowed for statistical purposes, reaffirming that technical impossibility cannot trigger disallowance, and that treaty rates prevail even in dividend distribution tax matters
FULL TEXT OF THE ORDER OF ITAT DELHI
