Chennai Appellant v. East Coast Constructions Limited

IN THE HIGH COURT OF JUDICATURE AT MADRAS Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN and THE HONOURABLE MR.JUSTICE M.M.SUNDRESH Tax Case (Appeal)No.2688 of 2006 Commissioner of Income TaxChennai Chennai Appellantv.East Coast Constructions Limited4, Moores RoadChennai 6.Respondent Tax Case Appeal filed under section 260A of the Income TaxAct, 1961 against the order of the Income Tax Appellate Tribunal,Madras 'A' Bench, Chennai, dated 21.04.2006 passed in ITANo.189/Mds/2005 against the Commissioner of Income Tax (Appeals)-Vin ITA No.31/2003-04 dated 3.6.03 against the Deputy Commissionerof Income Tax Company Circle V(3) Madras dated 28.2.03 and made inPAN/GI.No.AAACR3147C/GI No.53027-R. For appellant :Mrs.Pushya SitaramanJUDGMENT(Judgment of the Court was delivered by K.RAVIRAJA PANDIAN, J.) The revenue on appeal against the order of the Income TaxAppellate Tribunal, Madras 'A' Bench, Chennai, dated 21.04.2006passed in ITA No.189/Mds/2005 in respect of the assessment year2000-01. 2. The assessee filed its return for the assessment year2000-01. The Assessing Officer granted MAT credit aftercalculating the interest under Section 234B and 234 C. Aggrievedby the order, the assessee filed an appeal before the Commissionerof Income Tax (Appeals), who allowed the appeal following thedecision of the Tribunal in Chemplast Sanmar Limited. The assesseefiled a second appeal before the Income Tax Appellate Tribunal.The Tribunal allowed the appeal in favour of the assessee followingits earlier order in the case of Chemplast Sanmar Limited for theassessment year 2002-03 and held that the assessee is entitled toadjust the MAT credit first before charging of interest u/s 234Bhttps://hcservices.ecourts.gov.in/hcservices/and 234 C. Aggrieved by the same, the revenue filed the present appeal by formulating the following questions of law:- "1. Whether in the facts and circumstances ofthe case, the Tribunal was right in holding thatMAT credit is to be set off from the tax payablebefore setting off the Tax deducted at Source andAdvance tax paid? 2. Whether on the facts and circumstances ofthe case the MAT credit can be given priority ofset off against tax payable, contrary to thescheme of Schedule G of Form 1? 3. Whether the interest under Section 234 Band 234 C had to be calculated after giving theMAT credit against the tax payable on the basis ofnormal computation? 3. We heard the arguments of the learned counsel for theappellant and perused the materials available on record. 4. The very same issues have been considered by the DivisionBench of this Court in T.C.A.Nos.887 of 2004 etc. batch on09.04.2009. In respect of the 3rd question of law, the DivisionBench has answered in favour of the assessee and against therevenue by observing 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 the DelhiHigh Court cited supra. The Delhi High Court hasconsidered the relevant provisions and dealt withthe matter in detail and held that the creditunder Section 115JAA should be given effect tobefore charging of interest under Section 234A,234B and 234C of the Act. We are in agreementwith the reasoning given by the Delhi High Court.The learned counsel appearing for the revenue hasnot produced any materials or given compellingreasons to take a contrary view with that of theDelhi High Court. In such circumstances, weanswer the first question in favour of theassessee and against the revenue. 5. In respect of the 1[st] and 2[nd] questions of law, the DivisionBench has observed as follows:- 5. In respect of the 1[st] and 2[nd] questions of law, the DivisionBench has observed as follows:- "18. In the present case, the intention of thelegislature is to give tax credit to tax and not tothe tax and interest. Once the intention is clear,the revenue cannot rely on the Form-I to say thatthe MAT credit under Section 115JAA should be givenonly after tax and interest. Further we haveanswered the first question of law in favour of theassessee i.e. the MAT credit under Section 115JAAshould be given effect to before charging thehttps://hcservices.ecourts.gov.in/hcservices/interest under Section 234B and 234C. Rule 12(1)(a) and Form-I cannot go beyond the provisions of theAct. Form-I cannot lay down the order of priorityof adjustment of TDS, advance Tax, MAT credit underSection 115JAA which is contrary to the provisionsof the Act. The order passed by the Tribunal is inaccordance with law and we do not find any error orillegality in the order of the Tribunal so as towarrant interference. Accordingly, we answer thequestions 2 and 3 also in favour of the assessee andas against the Revenue. Thus all the questions of law have been answered against therevenue in favour of the assessee. 6. The questions of law in this case also are identical as theone considered by the Division Bench. Following the Division BenchJudgment cited supra, the appeal is dismissed. Sd/Asst.Registrar/true copy/Sub Asst.Registrarrg To1. The Income Tax Appellate Tribunal, Chennai 'A' Bench, Chennai.2. The Commissioner of Income Tax Appeals-V Chennai 3. The Deputy Commissioner of Income Tax, Company Circle V(3) Madras 1 cc To M/s. Pushya Sitaraman, Advocate, SR.14496 1 cc To Dr.Anitha Sumanth, Advocate, SR.15258 T.C.(A)No.2688 of 2006 NM(CO)SRA(30/4/2009)