Commissioner Of Income Tax Chennai Appellant v. M/S.mmg India Private Limited

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 28.04.2009 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIANandTHE HONOURABLE MR.JUSTICE M.M.SUNDRESH Tax Case (Appeal)No.665 of 2007 Commissioner of Income TaxChennai Appellant vs. M/s.MMG India Private LimitedNo.144, SeevaramThoraipakkamChennai – 96.Respondent Tax Case Appeal filed under section 260A of the Income TaxAct, 1961 against the order of the Income Tax Appellate Tribunal,Chennai 'A' Bench, Chennai, dated 28.2.2006 passed in ITANo.1379/Mds/2005 relating to the assessment year 2001-2002 againstthe Income Tax Appellate Tribunal, Chennai A Bench, dated29.11.2004 made in ITA.No.1379/Mds/2005 for the Assessment Year2001-2002. Against the order of the Commissioner of Income Tax AppealsV, No.121, Mahatma Gandhi Road, Chennai - 34 dated 29.11.2004 madein ITA.No.275/2004-2005 for the Assessment Year 2001-2002. Against the order of the Assistant Commissioner of IncomeTax Company Circle IV(2), Chennai - 34 dated 30.06.2004 inG.I.No.MM19 for the Assessment Year 2001-2002.For appellant : Mr.Arun Kurion JosephFor Respondent: Mr.C.V.Rajan The appeal has been preferred by the revenue against theorder of the Income Tax Appellate Tribunal, Madras 'A' Bench,Chennai, dated 28.2.2006 passed in ITA No.1379/Mds/2005 relating tohttps://hcservices.ecourts.gov.in/hcservices/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 filed a return of income for assessment year2001-2002. For the preceding assessment year, the assessee had paidminimum alternate tax (MAT) under Section 115J and the MAT creditwas carried under Section 115JAA to be set off against the taxpayable for the assessment year 2000-2001 and subsequent years. Theassessing officer while completing the proceedings under Section154 rectified the order under Section 143(3) and accordingly gaveMAT credit after charging interest under Section 234B and 234C.Aggrieved by the same, the assessee filed an appeal before theCommissioner of Income Tax (Appeals), who held that MAT credit isnothing but the assessee's credit lying with the Governmentavailable to the assessee for adjustment against the tax due in thesubsequently ears on normally computed income, and the tax creditbrought forward is to be automatically adjusted against by virtueof the provisions of Section 115JAA(4). The revenue filed a SecondAppeal to the Income Tax Appellate Tribunal and the Tribunalallowed the appeal in favour of the assessee following its earlierorder in the case of Chemplast Sanmar Limited for the assessmentyear 2002-2003. Aggrieved by the order of the Income-tax AppellateTribunal, the appellant filed this appeal by formulating thefollowing questions of law: "1. Whether in the facts and circumstancesof the case, the Tribunal was right in holdingthat MAT credit is to be set off from the taxpayable before setting off the tax deducted atsource and advance tax paid?2. Whether on the facts and circumstancesof the case the MAT credit can be given priorityof set off against tax payable, contrary to theScheme of Schedule G of Form 1? 3. Whether the interest under Section2234B and 234C had to be calculated after givingthe MAT credit against the tax payable on thebasis of normal computation? 3. We heard the arguments of the learned counsel for theappellant and the respondent and perused the materials available onrecord. 4. The very same issues involved in this appeal have beenconsidered by the Division Bench of this Court in T.C.A.Nos.887 of2004 etc. batch on 09.04.2009 and the Division Bench has answeredin favour of the assessee and against the revenue by observing asfollows: "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 Delhihttps://hcservices.ecourts.gov.in/hcservices/High Court cited supra. The Delhi High Court has 3. Whether the interest under Section2234B and 234C had to be calculated after givingthe MAT credit against the tax payable on thebasis of normal computation? 3. We heard the arguments of the learned counsel for theappellant and the respondent and perused the materials available onrecord. 4. The very same issues involved in this appeal have beenconsidered by the Division Bench of this Court in T.C.A.Nos.887 of2004 etc. batch on 09.04.2009 and the Division Bench has answeredin favour of the assessee and against the revenue by observing asfollows: "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 Delhihttps://hcservices.ecourts.gov.in/hcservices/High Court cited supra. The Delhi High Court has considered 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.......18. In the present case, the intention ofthe legislature is to give tax credit to tax andnot to the tax and interest. Once the intention isclear, the revenue cannot rely on the Form-I to saythat the MAT credit under Section 115JAA should begiven only 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 theinterest 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." 5. The questions of law in this appeal are identical tothe one considered by the Division Bench. Therefore, following theDivision Bench Judgment stated supra, the appeal is dismissed sincethe questions of law have already been answered in favour of theassessee. Sd/Asst.Registrar krr https://hcservices.ecourts.gov.in/hcservices/ To 1. The Commissioner of Income Tax Chennai 2. The Income Tax Officer, Income Tax Appellate Tribunal, Chennai 'A' Bench, Chennai. 3. The Commissioner of Income Tax Appeals V, Office of the Commissioner of Income Tax Appeals V, No.121, Mahatma Gandhi Road, Chennai - 34. 4. The Assistant Commissioner of Income Tax, Company Circle IV(2), Chennai - 34. 5. The Assistant Registrar, Income Tax Appellate Tribunal Bench 'C' Rajaji Bhavan, III Floor, Besant Nagar, Chennai - 20. 6. The Income Tax Officer, Company Circle II(1) Besant Nagar, Chennai - 90. 1 cc To Mr.R.Sivaraman, Advocate, SR.19123.1 cc To Mr.Pushya Sitaraman, Standing Counsel for I.T.Cases, SR.18393 T.C.(A)No.665 of 2007 MG(CO)RVL 02.06.2009