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2014 (12) TMI 553 - AT - Income TaxExercise of jurisdiction by CIT u/s 263 Assessment made u/s 153A - shortfall in the payment of dividend distribution tax - Declaration of dividend which can be made only by the company in the AGM on the recommendation of Board of Directors - Held that:- The dividend proposed in the accounts by the Board of Directors on 31.03.2004 was ₹ 1.24 crores and the provision for dividend distribution tax amounted to ₹ 15.5 lakhs - In the AGM of the company held on 30.12.2004 the dividend declared was ₹ 62 lakhs and the dividend distribution tax due was ₹ 7.75 lakhs. This was duly paid by the assessee company - assessee company is liable to pay tax on distributed profits within 14 days from the date of declaration of dividend or distribution of dividend or payment of dividend whichever is earlier - the dividend was declared in the Annual General Meeting on 30.12.2004, when the AGM was held -The provision for dividend made in the accounts or the recommendation of the Board of Directors regarding the proposed dividend cannot be considered as declaration of dividend. It is only u/s 205(1)(A) that the power to declare interim dividend has been conferred to the Board of Directors - it is only the interim dividend that can be declared by the Board of Directors - since the Annual General Meeting took place on 30.12.2004 and in the AGM ₹ 62 lakhs was declared and the dividend distribution tax thereon came to ₹ 7.75 lakhs - the assessee company was not liable to pay dividend distribution tax of more than ₹ 7.75 lakhs order u/s 263 passed by the ld. CIT is not sustainable on merits - de hors any incriminating material when the assessment is not abated the addition u/s 153A is not sustainable the same has also been held in Al Cargo Global Logistics Limited vs DCIT [2012 (7) TMI 222 - ITAT MUMBAI(SB)] - no assessment u/s 153A is sustainable - when assessment itself is not sustainable, no exercise of jurisdiction u/s 263 of the Act on such assessment is sustainable thus, the order of the CIT is set aside Decided in favour of assessee.
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