Commissioner Of Income Tax Chennai v. M/S Rane Trw Steering Systems Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 16.04.2009 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIANandTHE HONOURABLE MR.JUSTICE M.M.SUNDRESH Commissioner of Income TaxChennai ..Appellant v. M/s Rane TRW Steering Systems Ltd45, TTK Road,Alwarpet, Chennai 18. ..Respondent Tax Case Appeal filed under section 260A of the Income Tax Act,1961 against the order of the Income Tax Appellate Tribunal, Madras'B' Bench, Chennai, dated 17.02.2006 passed in ITA No.1628/Mds/2003against the order of the Commissioner of Income Tax (Appeals-V) madein ITA.No.81/2003-2004 dated 03.06.2003 against the order of theDeputy Commissioner of Income Tax, Company Circle-V(3) Chennai dated28.02.2003 and made in PAN/GI.No. /GI.No.53027-R. (Judgment of the Court was delivered byK.RAVIRAJA PANDIAN, J.) The revenue on appeal against the order of the Income TaxAppellate Tribunal, Madras 'B' Bench, Chennai, 17.02.2006 passed inITA No.1628/Mds/2003 in respect of the assessment year 2002-03. 2. The assessee filed its return for the assessment year 2000-01. For the preceding assessment year, the assessee had paid MinimumAlternate Tax (MAT) u/s 115JA and the MAT credit was carried u/s115JAA to be set off against the tax payable. Assessing Officer videproceedings under Section 143(1) gave MAT credit after deducting theadvance tax/TDS and charging interest u/s 234B and 234C. On appeal,the Commissioner of Income Tax (Appeals) held that MAT credit isnothing but the assessee's credit lying with the Government available https://hcservices.ecourts.gov.in/hcservices/ to the assessee for adjustment against the tax due in the subsequentyears on normally computed income and the tax credit brought forwardis to be automatically adjusted against by virtue of the provisionsof Section 115JAA(4). The revenue filed a second appeal to theIncome Tax Appellate Tribunal. The Tribunal allowed the appeal infavour of the assessee following its earlier order in the case ofChemplast Sanmar Limited for the assessment year 2002-03. Aggrievedby the same, the revenue filed the present appeal by formulating thefollowing questions of law:- "1. Whether in the facts and circumstances ofthe case, the Tribunal was right in holding that MATcredit is to be set off from the tax payable beforesetting off the Tax deducted at Source and Advancetax paid? 2. Whether on the facts and circumstances ofthe case the MAT credit can be given priority of setoff against tax payable, contrary to the scheme ofSchedule G of Form 1? 3. Whether the interest under Section 234 B and234 C had to be calculated after giving the MATcredit 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 the revenueby observing as follows:- "7.In respect of the first question of law, thearguments advanced by the counsel on either side arethe same as the one advanced before the Delhi HighCourt cited supra. The Delhi High Court hasconsidered the relevant provisions and dealt with thematter in detail and held that the credit underSection 115JAA should be given effect to beforecharging of interest under Section 234A, 234B and234C of the Act. We are in agreement with thereasoning given by the Delhi High Court. The learnedcounsel appearing for the revenue has not produced anymaterials or given compelling reasons to take acontrary view with that of the Delhi High Court. Insuch circumstances, we answer the first question infavour of the assessee and against the revenue. "7.In respect of the first question of law, thearguments advanced by the counsel on either side arethe same as the one advanced before the Delhi HighCourt cited supra. The Delhi High Court hasconsidered the relevant provisions and dealt with thematter in detail and held that the credit underSection 115JAA should be given effect to beforecharging of interest under Section 234A, 234B and234C of the Act. We are in agreement with thereasoning given by the Delhi High Court. The learnedcounsel appearing for the revenue has not produced anymaterials or given compelling reasons to take acontrary view with that of the Delhi High Court. Insuch circumstances, we answer the first question infavour of the assessee and against the revenue. 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 that theMAT credit under Section 115JAA should be given onlyafter tax and interest. Further we have answered thefirst question of law in favour of the assessee i.e.the MAT credit under Section 115JAA should be giveneffect to before charging the interest under Section234B and 234C. Rule 12(1)(a) and Form-I cannot gobeyond the provisions of the Act. Form-I cannot laydown the order of priority of adjustment of TDS,advance Tax, MAT credit under Section 115JAA which iscontrary to the provisions of the Act. The orderpassed by the Tribunal is in accordance with law andwe do not find any error or illegality in the orderof the Tribunal so as to warrant interference.Accordingly, we answer the questions 2 and 3 also infavour of the assessee and as against the Revenue. Thus all the questions of law have been answered against the revenuein 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.Registrar rg To 1. THE REGISTRAR, INCOME TAX APPELLATE TRIBUNAL CHENNAI 'B' BENCH, CHENNAI. INCOME TAX APPELLATE TRIBUNAL CHENNAI 'B' BENCH, CHENNAI. 2. THE COMMISSIONER OF INCOME TAX APPEALS, CHENNAI. CHENNAI. 3. THE DEPUTY COMMISSIONER OF INCOME TAX COMPANY CIRCLE V(3) CHENNAI. CHENNAI. + 1 c.c. to M/s. Pushya Sitaraman, Sr.Standing Counselfor Income Tax Department. S.R.No.14480.for Income Tax Department. S.R.No.14480. T.C.(A)No.2286 of 2006 NM (CO)GSK 29.04.2009.