Vedanta Ltd. Vs. ACIT (ITAT Delhi)
Summary: The Delhi Bench “F” of the Income Tax Appellate Tribunal considered the assessee’s appeal against the order dated 12.04.2019 passed by the Commissioner of Income Tax (Appeals)-9, New Delhi, for Assessment Year 2013-14. The principal issue was the assessee’s claim for refund of Rs. 11,22,14,052, described in the grounds as excess Dividend Distribution Tax (DDT). The CIT(A) had rejected the claim, allegedly on the ground that there was no provision under the Income-tax Act, 1961 to grant such refund.
The assessee contended that the claim was legitimate and had been made in the return of income after considering credit of dividends received from subsidiaries under Section 115-O(1A) of the Act, which subsidiaries were subsequently merged with the assessee. It further contended that DDT constituted additional income tax paid by the assessee and that refund of the excess amount could be claimed under Section 237 of the Act. The assessee also disputed the CIT(A)’s observation that it had failed to establish that the Scheme of Amalgamation permitted refund of DDT actually paid by the amalgamating subsidiaries, stating that it had claimed credit of dividends received from the subsidiaries, resulting in excess DDT paid by the assessee itself.
During the hearing, both parties brought to the Tribunal’s notice that an identical issue had arisen in the assessee’s appeal for AY 2012-13. The Tribunal therefore recorded that the issue was covered in favour of the assessee.
The Tribunal examined its earlier order dated 17.11.2021 in Vedanta Ltd. vs. ACIT, ITA No. 5368/Del/2019, concerning AY 2012-13. In that matter, the assessee had similarly claimed credit of dividends received from subsidiaries, resulting in a refund of excess DDT paid by the assessee. The earlier Tribunal order had restored the matter to the Assessing Officer with a direction to issue the refund in accordance with law at the earliest. The Tribunal had specifically observed that the issue was not one of refund of DDT per se, but of refund of excess credit of dividend tax over the actual amount payable. It had also distinguished the claim from a case where the assessee sought to claim dividend tax itself as an expense.
Finding that the facts and circumstances for AY 2013-14 remained the same, the Tribunal followed its earlier decision and restored the matter to the file of the Assessing Officer to issue the refund of excess dividend tax paid by the assessee. The Tribunal consequently allowed the appeal for statistical purposes.
The order therefore did not itself quantify or finally issue the refund; rather, the matter was restored to the Assessing Officer for issuance of the refund. The operative direction was specifically to issue the refund of excess dividend tax paid by the assessee.
Cases Discussed
- Vedanta Ltd. Vs. ACIT, ITA No. 5368/Del/2019, order dated 17.11.2021 — followed as the Tribunal’s earlier decision for AY 2012-13 on the identical issue of refund of excess dividend tax paid by the assessee.
FULL TEXT OF THE ORDER OF INCOME TAX APPELLATE TRIBUNAL, DELHI
The appeal by the assessee is directed against the order dated 12.04.2019 of the Ld. Commissioner of Income Tax (Appeals) – 9, New Delhi (“CIT(A)”) pertaining to Assessment Year (“AY”) 2013-14.
2. The assessee has taken the following grounds of appeal:-
“1. That the CIT(Appeals) erred on facts and in law in rejecting the claim of Appellant seeking refund of Rs. 11,22,14,052, being excess Dividend Distribution Tax (referred to as “DDT”), allegedly on the ground that there is no provision under the Income Tax Act, 1961 (‘the Act’) to allow granting such refund of DDT.
1.1 That the CIT(Appeals) erred on facts and in law in not appreciating that the aforesaid claim made by the Appellant was legitimate claim made, in the return of income itself, after considering the credit of dividend(s), as per Section 115-O(IA) of the Act, received from subsidiary(ies) which was later on merged with the Appellant.
1.2 That the CIT(Appeals) erred on facts and in law in not appreciating that the DDT being an additional income tax paid by the Appellant, the refund of the same could be claimed under Section 237 of the Act.
1.3 That the CIT(Appeals) erroneously observed that the Appellant failed to prove that Scheme of Amalgamation allowed refund of DDT actually paid by the amalgamating subsidiary(ies), without appreciating that the Appellant only claimed credit of dividend(s) received from subsidiary(ies) which resulted in refund of excess DDT which was paid by the Appellant only.”
3. We have heard the Ld. Representative of the parties and perused the records. Parties have brought to our notice that identical issue arose for consideration in assessee’s appeal for AY 2012-13 filed before the Tribunal. Therefore, the issue is covered in favour of the assessee.
4. We have gone through the order dated 17.11.2021 of the Tribunal in ITA No. 5368/Del/2019 in the case of the assessee for AY 2012-13 (copy at page 1-2 of assessee’s Paper Book) wherein similar issue of claim of credit of dividend received from subsidiaries which resulted in refund of excess Dividend Distribution Tax (DDT) paid by the assessee was involved. The Tribunal restored the matter back to the file of the Ld. AO to issue refund as per the provisions of law at the earliest with the following observations:
“2. … We find that this issue is not pertaining to refund of DTT perse but refund of excess credit of dividend tax which is in excess of the actual amount payable. Nor this is not a case of the assessee in claiming the dividend tax as expense but claiming the excess dividend tax paid as refund.”
5. Since the facts and circumstances remain the same in the year under appeal before us, following the decision (supra) of the Tribunal, we restore the matter back to the file of the Ld. AO to issue the refund of excess dividend tax paid by the assessee.
6. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 2nd February, 2023.
