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2021 (5) TMI 566 - AAR - Income TaxAdmissibility of application for Advance ruling under section 245R - only objection of the Department is that the proceeding was pending on the date of filing of present application, therefore, the application was not admissible under clause (i) of the proviso to section 245R(2) - HELD THAT:- The question No. 21 was in respect of dividend income earned by the applicant and had no relevance to the dividend declared by the applicant. Further, question No. 23 regarding difference in tax credit in form 26AS and return, large outward remittance to non-resident, the gross total income being less than value of foreign remittances and high ratio of refund to TDS are also not found connected with the dividend declared by the applicant and dividend distribution tax made thereon. As already mentioned earlier the applicant had not only deducted and paid dividend distribution tax under section 115-O of the Act on the dividend declared at the prescribed rate but no refund of dividend distribution tax was claimed in the return. Therefore, there could have been no basis to raise this issue in the questionnaire. From the copy of questionnaire sent with notices under section 142(1) of the Act brought on record, we do not find the issue of dividend distribution tax appearing in any of the questions. The claim for the refund of excess dividend distribution tax was made vide applicant's letter dated November 30, 2018 which was after the filing of the present application. The pendency has to be considered on the date of filing of the application and there was no pendency on that date. Merely because the applicant had raised the issue of excess dividend distribution tax in his subsequent letter dated November 30, 2018, it does not create any pendency of the date of application filed earlier. Thus, the questions raised in the present application is not found pending before the Income-tax authority on the date of filing of the application. As held in the case of Hyosung Corporation v. AAR [2016 (2) TMI 575 - DELHI HIGH COURT] that a notice under section 143(2) merely asking for certain information from the assessee issued prior to filing of application before Authority for Advance Rulings will not constitute bar in terms of clause (i) of the proviso to section 245R(2), on Authority for Advance Rulings entertaining and allowing the application. Consequently, the mere fact that such a notice was issued prior to the filing of the application by the petitioner before the Authority for Advance Rulings will not constitute a bar, in terms of clause (i) of the proviso to section 245R(2) of the Act, on the Authority for Advance Rulings entertaining and allowing the applications". The same principle applies in respect of other notices issued under section 142(1) of the Act. As already discussed earlier the specific questions of dividend distribution tax being a tax on dividend or otherwise and lower rate of 10 per cent. in respect of dividend distribution tax payable to non-resident shareholder under article 10 of the India-Japan DTAA did not form part of any of the questionnaires or notices. Therefore, such notices issued prior to filing of the application cannot be a bar in terms of clause (i) of the proviso to section 245R(2) of the Act, for admitting the application. As found that the issue involved in the questions raised in the application filed before us was not pending before the Income-tax authority and the bar in terms of clause (i) of the proviso to section 245R(2) is not found attracted. Therefore, the application is admitted under section 245R(2) of the Act.
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