Appellant v. Respondent

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 28.04.2009 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN and THE HONOURABLE MR.JUSTICE M.M.SUNDRESH Commissioner of Income TaxMadurai M/s.Madras Cements LimitedAuras Corporate Centre, V FloorMylapore, Chennai – 600 004. Appellantv. Respondent Tax Case Appeal filed under section 260A of the IncomeTax Act, 1961 against the order of the Income Tax AppellateTribunal, Madras 'D' Bench, Chennai, dated 25.5.2007 passed inITA No.2605/Mds/2004 relating to the assessment year 2001-2002against the order of the Commissioner of Income Tax (Appeals) II,Madurai dated 16.7.2004 and passed in ITA No.89/2004-05 andagainst the order of the Deputy Commissioner of Income Tax CircleI, Virudhunagar, dated 29.3.2004 and passed in PAN/GIR.No. :M-117/DCIT/VNR, for the assessment year 2001-2002. For appellant : Mrs.Pushya SitaramanFor Respondent: Mr.P.J.Rishikesh JUDGMENT (Judgment of the Court was delivered by K.RAVIRAJA PANDIAN,J.) The appeal has been preferred by the revenue against theorder of the Income Tax Appellate Tribunal, Madras 'D' Bench,Chennai, dated 25.5.2007 passed in ITA No.2605/Mds/2004 relatingto the assessment year 2001-2002. 2. The material facts as culled out from the statement offacts in the memorandum of grounds of appeal are stated below:- The assessee is a public limited company and is engagedin the business of manufacture and sale of cement. For theassessment year 2001-2002, the assessee company filed its returnof income, wherein the assessing officer considered the interesthttps://hcservices.ecourts.gov.in/hcservices/under Section 234C prior to MAT credit and thus completed the assessment. Aggrieved by the said order, the assessee filed anappeal before the Commissioner of Income Tax(Appeals), whodirected the assessing officer to give the method of computationof interest under Section 234C specifying the quantum, period andrate of interest. He also further directed him to charge interestunder Section 234C on the tax payable on the returned incomeafter deducting the MAT credit and TDS. Aggrieved by the order ofthe Commissioner of Income-tax (Appeals), the revenue filed anappeal before the Income-tax Appellate Tribunal and the Tribunalallowed the appeal in favour of the assessee following itsearlier order in the case of Chemplast Sanmar Limited Vs. DCIT,(2004) 83 TTJ (Chennai) 427 held that the MAT credit had to beallowed prior to levy of interest under Sections 234B and 234C ofthe Act. Aggrieved by the same, the revenue filed this appeal byformulating the following questions of law: "1. Whether in the facts andcircumstances of the case, the Tribunal wasright in holding that MAT credit is to be setoff from the tax payable before levyinginterest under Section 234B and 234C of theIncome tax Act, 1961?2. Whether on the facts andcircumstances of the case the MAT credit can begiven priority of set off against tax payable,contrary to the Scheme of Schedule G of Form 1? 3. We heard the arguments of the learned counsel for theappellant and perused the materials available on record. "1. Whether in the facts andcircumstances of the case, the Tribunal wasright in holding that MAT credit is to be setoff from the tax payable before levyinginterest under Section 234B and 234C of theIncome tax Act, 1961?2. Whether on the facts andcircumstances of the case the MAT credit can begiven priority of set off against tax payable,contrary to the Scheme of Schedule G of Form 1? 3. We heard the arguments of the learned counsel for theappellant and perused the materials available on record. 4. The very same issues involved in this appeal have beenconsidered by the Division Bench of this Court in T.C.A.Nos.887of 2004 etc. batch on 09.04.2009 and the Division Bench hasanswered in favour of the assessee and against the revenue byobserving as follows:"7.In respect of the first question of law, thearguments advanced by the counsel on either sideare the same as the one advanced before theDelhi High Court cited supra. The Delhi HighCourt has considered the relevant provisions anddealt with the matter in detail and held thatthe credit under Section 115JAA should be giveneffect to before charging of interest underSection 234A, 234B and 234C of the Act. We arein agreement with the reasoning given by theDelhi High Court. The learned counsel appearingfor the revenue has not produced any materials orgiven compelling reasons to take a contrary viewwith that of the Delhi High Court. In suchcircumstances, we answer the first question infavour of the assessee and against the revenue....... 18. In the present case, the intention of https://hcservices.ecourts.gov.in/hcservices/ the legislature is to give tax credit to tax andnot to the tax and interest. Once the intentionis clear, the revenue cannot rely on the Form-Ito say that the MAT credit under Section 115JAAshould be given only after tax and interest.Further we have answered the first question oflaw in favour of the assessee i.e. the MATcredit under Section 115JAA should be giveneffect to before charging the interest underSection 234B and 234C. Rule 12(1)(a) and Form-Icannot go beyond the provisions of the Act.Form-I cannot lay down the order of priority ofadjustment of TDS, advance Tax, MAT credit underSection 115JAA which is contrary to theprovisions of the Act. The order passed by theTribunal is in accordance with law and we do notfind any error or illegality in the order ofthe Tribunal so as to warrant interference.Accordingly, we answer the questions 2 and 3also in favour of the assessee and as against theRevenue." 5. The questions of law in this appeal are identical tothe one considered by the Division Bench. Therefore, followingthe Division Bench Judgment stated supra, the appeal is dismissedsince the questions of law have already been answered in favourof the assessee.krr Sd/Asst.Registrar/true copy/Sub Asst.RegistrarTo 1. The Assistant Registrar Income Tax Appellate Tribunal, III Floor, Besant Nagar, Madras 90. 2.The Commissioner of Income TaxChennai 3.The Income Tax Appellate Tribunal,Chennai 'D' Bench, Chennai. https://hcservices.ecourts.gov.in/hcservices/ 4.The Deputy Commissioner of Income Tax, Cirle I, Virudhunagar. + 1 cc to M/s. Pushya Sitaraman, Advocate SR No.18390 KSK(CO)SR/9.6.2009 T.C.(A)No.367 of 2008