ITAT Quashes CIT(A) Order for Incorrect Surcharge as CPC Corrects Dividend Tax to 15% [Read Order]
The tribunal observed that since the CPC had already rectified the error in the original intimation for AY 2023-24, the CIT(A)’s decision upholding the incorrect surcharge was set aside
The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) allowed the appeal and quashed the Commissioner of Income Tax (Appeals)[CIT(A)] order after noting that the Centralized Processing Center (CPC) had corrected the surcharge on dividend income from 37% to the proper 15% under section 154 of Income Tax Act,1961.
Srijan Family Trust,appellant-assessee, filed its return of income declaring Rs. 1,30,13,620/-. While processing the return, the AO/CPC computed the tax liability by applying a 37% surcharge on the dividend income through an intimation dated 18/12/2023 passed under section 143(1) of the Act.
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Aggrieved by this intimation, the assessee filed an appeal before the CIT(A), which was dismissed vide order dated 25/11/2024. The assessee then preferred the present appeal against the CIT(A)’s order.
The assessee counsel argued that the CIT(A) erred in upholding a surcharge of 37% on dividend income instead of the correct maximum rate of 15%. He added that the assessee’s section 154 application had been allowed by the CPC, which rectified the surcharge, and therefore, the CIT(A)’s order needed to be quashed.
The Department’s representative, relying on the lower authorities’ orders, opposed the appeal and sought its dismissal.
The two member bench comprising Yogesh Kumar U.S (Judicial Member) and Manish Agarwal (Accountant Member) reviewed the submissions and the records. It noted that the assessee had filed an application under section 154 of the Act against the original intimation dated 18/12/2023 for AY 2023-24.
The CPC, through its order dated 14/06/2024, allowed the application and corrected the surcharge on dividend income. Since the CPC had rectified the error, the CIT(A)’s order was set aside, and the impugned order dated 25/11/2024 was quashed.
Accordingly the appeal was allowed.
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