Section 2(43)

Section 2(43) — the law in short

What the courts have decided on section 2(43), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Foseco India Ltd. Company v. Assistant Commissioner of Income Tax High CourtCuts both waysUnder appeal
  Can I still rely on Colorcon Asia to get the treaty rate on DDT, or has the Bombay High Court unsettled it?
  It has unsettled it, but has not overruled it. On 27 April 2026 a Division Bench of the Bombay High Court, hearing seven appeals of Foseco India Ltd., framed two questions for a Larger Bench: whether the Division Bench decision in Colorcon Asia Pvt. Ltd. lays down the correct position in law when it holds that DDT is a tax paid by the company on the dividend income of the shareholder, entitling the shareholder to the benefit of the India-UK treaty; and whether, considering the Supreme Court's decision in Godrej & Boyce, Colorcon Asia is per incuriam. The Registry was directed to place the proceedings before the Chief Justice for constitution of a Larger Bench.
• Colorcon Asia Pvt. Ltd. v. Joint Commissioner of Income Tax High CourtHelps taxpayerUnder appeal
  My Indian company paid DDT at over twenty per cent on dividend to its UK parent. Can I restrict it to the ten per cent treaty rate, and does the Special Bench decision stop me?
  A Division Bench of the Bombay High Court at Goa held that it can. It allowed the appeal, set aside the Board for Advance Rulings' ruling of 27 June 2024, and declared that Colorcon Asia Pvt. Ltd. is entitled to restrict the tax rate on dividends distributed by it to Colorcon Ltd, United Kingdom, at ten per cent under Article 11 of the India-UK tax treaty — on the reasoning that DDT paid by a distributing company is not an income tax on the profits or income of the company but a tax on the dividend, which is the income of the shareholder, charged in the company's hands only for administrative convenience, so that s.90(2) lets the lower treaty rate be applied.
• CIT v Saint Gobain Glass India Ltd High CourtHelps taxpayer
  CPC has computed my MAT credit on income-tax alone and left out the surcharge and the education cess in both the MAT and the normal computation. That has cut the credit down. Is the Department right?
  No. The Madras High Court held that MAT credit under s.115JAA includes surcharge and education cess and is not confined to income-tax stripped of them, following its own earlier judgment in PCIT v. Scope International Pvt. Ltd. and the Supreme Court's construction of 'income tax' in CIT v. K. Srinivasan. The Revenue's appeal was dismissed and the substantial question answered against it.
• Vodafone India Services Pvt Ltd v Union of India (Gujarat) High CourtHelps taxpayerNo later treatment found
  The AO rejected my stay application in a few lines and told me to pay 20%. Can that order stand?
  No. An order under s.220(6) that brushes aside the assessee's submissions and mechanically directs payment of 20% is not a speaking order and will be quashed. The Gujarat High Court also held that a penalty demand is not 'tax', so the CBDT's 20% benchmark and the parameters that govern a tax demand do not simply carry across to a penalty appeal.
• Mohmmad Zamir Khan v ACIT High CourtHelps departmentNo later treatment found
  My years are before June 2013. Can the department still say the Explanation to s.179 makes me liable for the company's interest and penalty?
  The Bombay High Court says yes. It held that the Explanation added to s.179 with effect from 1 June 2013 came in only to remove the doubt created by the earlier decisions, that it is therefore clarificatory, and that on Gold Coin a clarificatory amendment operates retrospectively - so directors were liable for the company's penalty and interest for years as far back as 1995-96.
• Sanjay Ghai v ACIT High CourtHelps taxpayerSuperseded by amendment
  The s.179 order against me is mostly interest and penalty, not tax. Can the department recover those from me as a director?
  On the section as it stood before 1 June 2013, no. The Delhi High Court held that 'tax due' in s.179(1) means tax as defined by s.2(43) and does not carry interest or penalty with it, so the director could not be made liable for anything more than the tax. That position has since been displaced by the Explanation to s.179 - read the validity note and the amendment warning before relying on this.
• Maganbhai Hansrajbhai Patel v ACIT High CourtHelps taxpayerSuperseded by amendment
  The officer has raised a demand on me personally as a director of a private company that has closed, and the figure includes interest and penalty as well as tax. Does section 179 reach interest and penalty?
  On this judgment, no - not as the section then stood. Section 179(1) makes a director of a private company jointly and severally liable for the tax due from the company which cannot be recovered from it. The Gujarat High Court held that the words tax due cannot be stretched to take in interest and penalty. The Act defines tax, it separately defines interest, and it does not define penalty at all; and where the legislature meant to sweep in everything it said so, as it did in s.156, which speaks of tax, interest, penalty, fine or any other sum payable. Section 179 does not use those words. The position has since been changed for later years by an Explanation added to the section.
• Giesecke & Devrient (India) Pvt. Ltd. v. Addl. CIT ITATHelps taxpayer
  Is there any Tribunal authority, older than the recent High Court decisions, that DDT cannot exceed the treaty rate — and can I still cite it?
  Yes. The Delhi Tribunal held on 13 October 2020 that the tax rates specified in a double taxation avoidance agreement in respect of dividend must prevail over DDT, and that the DDT levied by the company should not exceed the rate specified in Article 10 of the India-Germany treaty. It allowed the additional ground on principle but restored the matter to the Assessing Officer for the limited purpose of verifying, under Article 10(4), whether the beneficial owner carried on business in India through a permanent establishment; the appeal was allowed in part for statistical purposes.
• DCIT v Total Oil India Pvt Ltd (Special Bench) ITATHelps departmentOverruled
  My company paid dividend distribution tax on dividend to a French shareholder. Can I pay at the lower treaty rate on dividends instead of the section 115-O rate?
  This question is now before the Supreme Court and must not be treated as closed. What follows is what this Special Bench decided in April 2023; for where the point stands today, read the validity note. No, on the reasoning of this Special Bench. It treated dividend distribution tax under section 115-O as a charge on the domestic company on its own distributed profits, not a tax paid on behalf of the shareholder, following the Bombay High Court in Godrej & Boyce that the company does not act as the shareholder's agent and the charge is not on dividend in the shareholder's hands. It held that Tata Tea, which upheld the constitutional validity of section 115-O, does not support the taxpayer, a precedent being an authority only for what it actually decides. On that footing the shareholder's treaty rate does not limit the section 115-O rate.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.