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2013 (2) TMI 149 - HC - Income TaxRevision application u/s 264 to get refund - amalgamated company viz. Torrent Power Limited, got merged with the assessee company has declared interim dividend on which Corporate Dividend Tax (CDT) has been duly paid under the provisions of Section 115-O - claiming refund of CDT as companies paying dividend and receiving dividend have already got amalgamated, there is, in effect, no distribution of dividend - petitioner presented revision petition under section 264 before the CIT - Held that:- the Commissioner committed a serious error in, on one hand, holding that the revision petition was not maintainable and thereafter proceeding to decide the issues on merits and coming to the conclusion that even on merits, the claim of the petitioner was not tenable. If an authority under the Act comes to the conclusion that certain proceedings were not maintainable before him, the only course open would be to dismiss the same as being not competent. Once he concludes that he does not have the competence to allow a revision petition, he is equally not competent to reject the same on merits. In other words, the Commissioner could not have examined the merits of the petitioner’s claim unless he himself was convinced that the revision petition was maintainable. His dual stand that the revision petition was not maintainable and further that on merits also, the petitioner had no arguable case, in law is self-contradictory. Only an authority competent to entertain certain proceedings, be it in original, appellate or revisional nature, can hand down a decision on merits. Unable to understand as why the Commissioner felt that the revision was not maintainable. We may recall that the petitioner had moved an application to the Assessing Officer seeking refund of the dividend distribution tax already paid. Such application was rejected by the Assessing Officer by a detailed speaking order. Merely because such application was not in a formal format, the same would not change the character of the application being one seeking refund under the Act. Likewise, the Assessing Officer, after hearing the petitioner made a detailed speaking order dealing with the petitioner’s claim for refund. Such order also cannot be simply brushed aside as one being correspondence between the assessee and the Assessing Officer. Essentially, the Assessing Officer on 24th May 2002, passed an order rejecting the petitioner’s claim for refund. Such order was certainly amenable to revision at the hands of the Commissioner under section 264. Certain dividend was declared and paid by one of the companies which ultimately merged with the assessee company along with other companies. Before the date of declaration and payment of dividend, scheme for amalgamation was framed. By virtue of the decision of the High Court, such scheme was sanctioned with no variation in the effective date. Thus, the date of amalgamation which actually took effect was prior to the date on which dividend was declared and paid. In that view of the matter,no hesitation in holding that by virtue of such subsequent developments, the payment of dividend could no longer retain the character of dividend paid by Torrent Power Ltd since there cannot be payment of dividend by one company to its own self. See Marshall Sons and Co. (India) Ltd. v. ITO [1996 (11) TMI 6 - SUPREME COURT] wherein held such transfers would cease to be sales between two independent entities but would be treated as branch transfers. In the return of income filed by the transferee company, a detailed note amalgamation was filed pointing out that distribution dividend tax was already paid which, by virtue of such merger of companies, was required to be refunded. Section 237 however, provides that if any person satisfies the Assessing Officer that the amount of tax paid by him or on his behalf or treated as paid by him or on his behalf for any assessment year exceeds the amount with which he is properly chargeable under the Act for that year, he shall be entitled to a refund of the excess amount - refund granted - in favour of assessee.
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