The case between Vedanta Ltd. (formerly known as Sesa Sterlite Ltd.), New Delhi (appellant) and Assistant Commissioner of Income Tax (ACIT), Circle-26(1), New Delhi (respondent) pertains to the Assessment Year (AY) 2013-14. The case was filed on 13th June 2019 and concluded with a final order on 2nd February 2023. The case was heard by the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘F’.
Vedanta Ltd. filed its income tax return for AY 2013-14. The issue in question was the claim of refund of Rs. 11,22,14,052, being excess Dividend Distribution Tax (DDT). The appellant sought this refund on the grounds that there was no provision under the Income Tax Act, 1961 to allow such a refund. The claim was made after considering the credit of dividends received from subsidiaries which were later merged with the appellant.
The appellant, Vedanta Ltd., argued that the refund of the excess DDT was a legitimate claim made in the return of income. The appellant contended that the DDT, being an additional income tax paid by the appellant, could be claimed as a refund under Section 237 of the Income Tax Act. The appellant also argued that the Scheme of Amalgamation allowed for the refund of DDT paid by the amalgamating subsidiaries, and that the CIT(A) erred in rejecting the claim without properly considering this.
The respondent, represented by Shri T. Kipgen, CIT DR, maintained that the CIT(A)’s decision to reject the claim was based on the correct interpretation of the law and facts. The respondent argued that there was no provision under the Income Tax Act to allow the refund of DDT as claimed by the appellant.
The Tribunal, comprising N.K. Billaiya (Accountant Member) and Ms. Astha Chandra (Judicial Member), reviewed the submissions and records. They noted that a similar issue had been addressed in the appellant’s case for AY 2012-13, where the Tribunal had restored the matter back to the file of the Ld. AO to issue the refund as per the provisions of law.
The Tribunal referred to the order dated 17th November 2021 in ITA No. 5368/Del/2019 for AY 2012-13, where it was observed that the issue was not about the refund of DDT per se, but about the refund of excess credit of dividend tax paid. Following this precedent, the Tribunal decided to restore the matter back to the file of the Ld. AO to issue the refund of excess dividend tax paid by the assessee for AY 2013-14.
The appeal by Vedanta Ltd. against the ACIT, Circle-26(1), New Delhi, was allowed for statistical purposes. The Tribunal directed the Ld. AO to issue the refund of excess dividend tax paid by the assessee.
Order pronounced in the open court on 2nd February 2023.
Accountant Member: N.K. Billaiya
Judicial Member: Astha Chandra
Date of Order: 02/02/2023
Copy forwarded to:
Assistant Registrar, ITAT, New Delhi
Refund of Excess DDT: Vedanta Ltd. vs ACIT, Circle-26(1), AY 2013-14
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