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The Tax Publishers ITC Ltd. v. CIT [ITA No. 301/Kol/2015, dt. 3-2-2016] Interest on refund of excess dividend distribution tax *Facts:* The assessee paid more dividend distribution tax than the actual liability of dividend distribution tax. The assessing officer granted refund of the same with interest under section 244A. The CIT invoked revision powers under section 263 citing that there is no provision to grant refund for excess dividend distribution tax under the act. On appeal the ITAT: Held that assessee is entitled to interest under section 244A on excess dividend distribution tax as the same is akin to advance tax/additional tax. Excess dividend distribution tax was read as additional income tax under section 115-O hence vide section 244A(1)(b) applies to any other refund which is of wide import which can cover excess self-asst. tax, advance tax, tax paid on demand raised TDS deposited, dividend distribution tax etc. thus assessee was entitled to refund of interest on excess dividend distribution tax as well. Cases referred :-- ACIT v. Kerala Transport Co. -2013 (10) TMI 1232 9 (Ker-HC) CIT v. ABT Industries Ltd. - 2013 - TIOL - 332-High Court-MAD-IT (Mad-HC) Addl. CIT v. Royal Bank of Scotland N.V. [2011] 15 taxmann. Com 333 (Kol-Tribunal) CIT v. Vijaya bank - [TS-481-HC-2011 (KAR)] (Kar-HC)] CIT v. SIV Industries Ltd. (2007-2 TMI 30 (HC) (Mad-HC) UOI v. Tata Chemicals Ltd. (2014) 43 taxmann.com 240 (SC) - Section 244A grants substantive right for interest and not procedural right - was applied. Nowhere in Section 115-O it reads that payment of excess dividend distribution tax is an advance tax. It is only on principles of equity that the department cannot make use of any excess funds deprived by the assessee to its advantage that refund is applicable on such excess paid dividend distribution tax so is the interest. Taxes excess paid and not apportioned may be read as advance taxes no matter any specific mention under normal principles of bailment.

The Tax Publishers

ITC Ltd. v. CIT [ITA No. 301/Kol/2015, dt. 3-2-2016]

Interest on refund of excess dividend distribution tax

Facts:

The assessee paid more dividend distribution tax than the actual liability of dividend distribution tax. The assessing officer granted refund of the same with interest under section 244A. The CIT invoked revision powers under section 263 citing that there is no provision to grant refund for excess dividend distribution tax under the act. On appeal the ITAT:

Held that assessee is entitled to interest under section 244A on excess dividend distribution tax as the same is akin to advance tax/additional tax.

Excess dividend distribution tax was read as additional income tax under section 115-O hence vide section 244A(1)(b) applies to any other refund which is of wide import which can cover excess self-asst. tax, advance tax, tax paid on demand raised TDS deposited, dividend distribution tax etc. thus assessee was entitled to refund of interest on excess dividend distribution tax as well.

Cases referred :--

ACIT v. Kerala Transport Co. -2013 (10) TMI 1232 9 (Ker-HC)

CIT v. ABT Industries Ltd. - 2013 - TIOL - 332-High Court-MAD-IT (Mad-HC)

Addl. CIT v. Royal Bank of Scotland N.V. [2011] 15 taxmann. Com 333 (Kol-Tribunal)

CIT v. Vijaya bank - [TS-481-HC-2011 (KAR)] (Kar-HC)]

CIT v. SIV Industries Ltd. (2007-2 TMI 30 (HC) (Mad-HC)

UOI v. Tata Chemicals Ltd. (2014) 43 taxmann.com 240 (SC) - Section 244A grants substantive right for interest and not procedural right - was applied.

Nowhere in Section 115-O it reads that payment of excess dividend distribution tax is an advance tax. It is only on principles of equity that the department cannot make use of any excess funds deprived by the assessee to its advantage that refund is applicable on such excess paid dividend distribution tax so is the interest. Taxes excess paid and not apportioned may be read as advance taxes no matter any specific mention under normal principles of bailment.