By Following Its Earlier Decision Made In The Case Ofm/S.chemplast Sanmar Ltd v. Deputy Commissioner Of Income Tax(2004) 83 Ttj (Chennai) 42), The Tribunal Dismissed The Appealfiled By The Revenue. Aggrieved Against The Same, The Present Tax

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 17-04-2013 CORAM: THE HONOURABLE MRS.JUSTICE R.BANUMATHIAND THE HONOURABLE MR.JUSTICE K.RAVICHANDRABAABU Tax Case (Appeal) No.31 of 2010 Commissioner of Income Tax Coimbatore. .... Appellant/RespondentVersus A.B.T. Industries Ltd.,10/14-15 Kalingatayan StreetRamnagar, Coimbatore ... Respondent/Appellant Prayer: Appeal filed against the order of the Income Tax AppellateTribunal "D" Bench, dated 23.2.2006, in I.T.A No.2357/Mds/2004, underSection 260A of the Income Tax Act, 1961 for the assessment years2001-02 file against the order of the Commissioner of Incometax(Appeals) Coimbatore I.T.A.No.240/2003-2004 dated 1/7/2004 againstthe order of the Assistant Commissioner of Income Tax Department,company Circle 1 (i) Coimbatore dated 24/2/2003. For Appellant :Mr.N.V.Balaji Standing Counsel for I.T.For Respondent :Mr.R.Meenakshisundaram JUDGMENT The Revenue is on appeal against the order of the Income TaxAppellate Tribunal in respect of the assessment year 2001-2002. 2. The assessee is a company. The assessment was completedunder Section 143(1) of the Income Tax Act on 24.2.2003. TheAssessing Officer, while completing the assessment gave credit forTDS amount of Rs. 14,07,235/- only, as against the claim of theassessee for total TDS of Rs. 29,86,639/- The assessee through theirletter dated 9.5.2003 informed the assessing Officer that the incomepertaining to the TDS credit have been offered for tax in theassessment year 2001-02 and claimed MAT credit before chargingsurcharge on Income Tax. The claim of the assessee was considered bythe assessing Officer by passing order under Section 154 of theIncome Tax Act. The assessing Officer found that the claim for MATcredit can be considered only after charging the surcharge onIncome Tax. Accordingly, he passed the revised assessment order thereby ordering refund of Rs.12,91,037/-, however without grantinginterest under Section 244A on the ground that the refund has arisenas a result of giving MAT credit only. Aggrieved against the saidorder, the assessee went on appeal before the Commissioner ofIncome Tax (Appeals) by contending that surcharge should havebeen calculated after deducting MAT credit and interest underSection 244A should have been granted. The first appellate authoritywhile rejecting the claim of the assessee with regard to charging ofsurcharge after deduction of MAT credit, had however directed theAssessing Officer to calculate the interest under Section 244A andgrant the same. As against the order of the first appellateauthority, the Revenue went on appeal before the Tribunal. 3. By following its earlier decision made in the case ofM/s.Chemplast Sanmar Ltd., Vs. Deputy Commissioner of Income Tax(2004) 83 TTJ (Chennai) 42), the Tribunal dismissed the appealfiled by the Revenue. Aggrieved against the same, the present taxcase appeal is filed by the Revenue by raising the followingsubstantial question of law:- "Whether on the facts and circumstances of the case, the Tribunal ought to have appreciatedthe fact that the refund had arose on account ofthe MAT credit and the same could only be carriedforward to set off and refund of MAT credit cannotbe granted as per section 115JAA(5) andconsequently, interest on such refund underSection 244A cannot be granted?" 3. By following its earlier decision made in the case ofM/s.Chemplast Sanmar Ltd., Vs. Deputy Commissioner of Income Tax(2004) 83 TTJ (Chennai) 42), the Tribunal dismissed the appealfiled by the Revenue. Aggrieved against the same, the present taxcase appeal is filed by the Revenue by raising the followingsubstantial question of law:- "Whether on the facts and circumstances of the case, the Tribunal ought to have appreciatedthe fact that the refund had arose on account ofthe MAT credit and the same could only be carriedforward to set off and refund of MAT credit cannotbe granted as per section 115JAA(5) andconsequently, interest on such refund underSection 244A cannot be granted?" 4. It is submitted by the learned counsel appearing for theRevenue that the dispute involved in this case is as to whether theassessee is entitled to interest under Section 244A. learned counselfurther submitted that the Assessing Officer had given MAT credit tothe tune of Rs.14,39,653/- towards the total tax liability of Rs.31,35,255/- . Consequently, he has also given credit to TDS to thetune of Rs. 29,86,639/- and accordingly ordered for refund ofRs.12,91,037/-. As the refund was made as a result of giving MATcredit, the Assessing Officer had rightly rejected the claim ofinterest under Section 244A. 5. Per contra, the learned counsel appearing for the assesseesubmitted that as per the decision of the Supreme Court reported in(2011) 330 ITR 226 (SC) (Commissioner of Income Tax Vs. Tulsyan NECLtd.), MAT credit has to be given first and thereafter interest isto be computed. Therefore, the learned counsel contended that evenafter giving MAT credit, the tax liability payable by the assesseeis lesser than the TDS amount credit given and therefore the balanceamount ordered to be refunded should also carry interest underSection 244A. 6. Heard the learned counsel appearing for either side. 7. We have perused the order of the Assessing Officer madeunder Section 154, wherein he has given MAT credit under Section115JA to the tune of Rs. 14,39,653/- towards to the total taxliability of Rs.31,35,255/- . Thereafter, he has also given creditto TDS payment made by the assessee to the tune ofRs.29,86,639/-. Thus, it made him to make an order of refund of Rs.12,91,037/- to the assessee. From the said order of the AssessingOfficer, it is very clear that the refund was not made only due tothe grant of MAT credit and on the other hand it is in pursuant tothe TDS credit also to the tune of Rs.29,86,639/-. Therefore, thereasoning of the Assessing Officer is factually incorrect inrefusing to grant interest under Section 244A. When the said orderof the Assessing Officer was challenged by the assessee before thefirst appellate authority, it appears, two grounds were raised viz.,(i) surcharge should have been calculated after deducting MAT creditand (ii) interest under Section 244A should have been granted. 8. The first appellate authority rejected the claim of theassessee, insofar as the first ground is concerned, by holdingthat the MAT credit is to be treated on par with TDS payment andtherefore surcharge cannot be calculated after giving credit to MATcredit. However, insofar as the claim of interest under Section244A is concerned, the first appellate authority found that refundhad arisen out of the excess TDS payment and therefore theassessee is entitled to interest under Section 244A. He has alsospecifically found that the proviso to Section 115JAA(2) was notapplicable to the facts of the case. Accordingly, he directed theAssessing Officer to calculate the interest under Section 244A andgrant the same. 8. The first appellate authority rejected the claim of theassessee, insofar as the first ground is concerned, by holdingthat the MAT credit is to be treated on par with TDS payment andtherefore surcharge cannot be calculated after giving credit to MATcredit. However, insofar as the claim of interest under Section244A is concerned, the first appellate authority found that refundhad arisen out of the excess TDS payment and therefore theassessee is entitled to interest under Section 244A. He has alsospecifically found that the proviso to Section 115JAA(2) was notapplicable to the facts of the case. Accordingly, he directed theAssessing Officer to calculate the interest under Section 244A andgrant the same. 9. It is seen that as against the said order of the firstappellate authority, only the Revenue went on appeal before theTribunal. When we perused the order of the Tribunal, we could seethat the Tribunal considered only the issue in respect of givingMAT credit before set off of TDS and advance tax from the taxpayable by the assessee. No doubt, such issue is now settled in viewof the decision made by the Apex Court reported in (2011) 330 ITR 226(SC) (Commissioner of Income Tax Vs. Tulsyan NEC Ltd.) wherein theApex Court has held that the MAT credit admissible in terms ofsection 115JAA of the Income Tax Act, 1961, has to be set offagainst the assessed tax payable, before calculating interestunder Sections 234A, 234B and 234C. It is further held thereinthat if an assessee is entitled to a tax credit as a consequenceof the assessee making payment of tax under Section 115JA(1) inyear one, then, the set off such tax credit follows as a matter ofcourse once the conditions mentioned under Section 115JAA arefulfilled and the grant of such credit is not dependent upondetermination by the Assessing Officer. Thus, the Apex Court decidedthe issue in favour of the assessee therein. The decision of the Madras High Court reported in (2009) 314 ITR 231 (Commissioner ofIncome Tax Vs. Chemplast Sanmar Ltd) was also affirmed by the ApexCourt in the said decision. Thus, in view of the decision of theApex Court, as discussed supra, the issue with regard to grant ofMAT credit has already been settled. Therefore, the onlygrievance of the Revenue before the Tribunal could be against theorder of the first appellate authority directing the AssessingOfficer to grant interest under Section 244A. The Tribunal, on theother hand, has rejected the Revenue's appeal by following itsearlier order reported in M/s.Chemplast Sanmar Ltd., Vs. DeputyCommissioner of Income Tax (2004) 83 TTJ (Chennai) 42) . There isabsolutely no discussions, whatsoever, with regard to the interestpayments under Section 244A except by extracting a paragraph fromthe order of the Tribunal in Chemplast Sanmar Ltd case. 10. It appears that the Tribunal had concentrated only on theissue as to whether giving credit for MAT before set off of TDSand advance tax from the tax payable by the assessee is correct ornot. The Tribunal adverted its attention to the ChemplastSanmar Ltd., case to answer the said issue and consequentlyrejected the Revenue's appeal. The grounds of appeal raised inthis appeal by the Revenue also indicate that the issue before theTribunal was only with regard to interest payable under Section 244Aand not with regard to the adjustment of MAT credit. 10. It appears that the Tribunal had concentrated only on theissue as to whether giving credit for MAT before set off of TDSand advance tax from the tax payable by the assessee is correct ornot. The Tribunal adverted its attention to the ChemplastSanmar Ltd., case to answer the said issue and consequentlyrejected the Revenue's appeal. The grounds of appeal raised inthis appeal by the Revenue also indicate that the issue before theTribunal was only with regard to interest payable under Section 244Aand not with regard to the adjustment of MAT credit. 11. Even though the Tribunal dismissed the appeal filed by theRevenue as against the order of the first appellate authority, suchorder of dismissal was not in reference to the issue with regard topayment of interest under Section 244A. Under these circumstances,we would have normally remitted the matter back to the Tribunal toreconsider the issue. However, we are not resorting to do so aswe have already pointed out that the refund had arisen not as aresult of giving MAT credit alone as observed by the AssessingOfficer, but had arisen out of the excess TDS payment made by theassessee. Therefore, the assessee is entitled to interest underSection 244A. The first appellate authority has rightly consideredthe said issue and directed the Assessing Officer to grant the same.Consequently, there is no necessity for remitting the matter to theTribunal. On the other hand, we are of the view that dismissal ofthis appeal would give quietus to the matter. 12. Considering all these facts and circumstances, we find nomerits in this appeal and accordingly reject the same by answeringthe question of law accordingly. No costs.Sd/-Asst. Registrar //True Copy // Sub Asst. Registrar krr To 1. The Income Tax Appellate Tribunal 'D' Bench, Chennai 2. The Commissioner of Income -Tax (Appeals)-I, Coimbatore.3. The Assistant Commissioner of Income Tax, Company Circle I (1), Coimbatore. 3. The Assistant Commissioner of Income Tax, Company Circle I (1), Coimbatore. + one cc to Mr. M.V.Balaji, Sr.22340 + one cc to Mr.V.R.Meenakshi Sundari, sr.21489 Tax Case (Appeal) No.31 of 2010 BS RR 08/05/2013