Commissioner Of Income Tax Chennai v. M/S. Sri Lakshmi Saraswathi (Arni) Pvt. Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 30.04.2009 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN and THE HONOURABLE MR.JUSTICE M.M.SUNDRESH Tax Case (Appeal)No.710 of 2007 Commissioner of Income TaxChennai .. Appellant v. M/s. Sri Lakshmi Saraswathi(Arni) Pvt. Ltd.,16, Krishnama RoadNungambakkamChennai 34. .. 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 15.9.2006 passed in ITA No.1374/Mds/2005relating to the assessment year 2001-2002 against the order of theCommissioner of Income Tax (Appeals) V, Chennai dated 30.11.2004 inITA No.141/04-05 and against the order of Assistant Commissioner ofIncome-Tax, Company Circle(4) Chennai -34 dated 29.3.2004 made inGIR.No./PA No.SR 011/AABCS2312M. For appellant :Mrs.Pushya SitaramanFor Respondent: Mr.Philip George The appeal has been preferred by the revenue against the orderof the Income Tax Appellate Tribunal, Madras 'B' Bench, Chennai,dated 15.09.2006 passed in ITA No.1374/Mds/2005 relating to theassessment year 2001-2002. https://hcservices.ecourts.gov.in/hcservices/ 2. The material facts as culled out from the statement of factsin the memorandum of grounds of appeal are stated below:- The assessee filed its return of income for assessment year2001-2002. A notice under Section 143)2 was issued and assessmentwas completed by allowing the MAT credit under Section 115JAA onlyafter levying the interest under Section 234B and 234C. Aggrievedby the said order, the assessee filed an appeal before theCommissioner of Income Tax (Appeals), who following the decision ofthe Income Tax Appellate Tribunal in the case of Chemplast SanmarLimited Vs. DCIT, (2004) 83 TTJ (Chennai) 427 directed theassessing officer to give the MAT credit before charging interestunder Section 243B and 2423C of the Act. 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 its earlierorder in the case of Chemplast Sanmar Limited confirming the orderof the Commissioner of Income Tax (Appeal). Aggrieved by the orderof the Income-tax Appellate Tribunal, the appellant filed thisappeal 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 levying interest under Section 234B and234C of the Income Tax Act 1961 ?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. 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 side arethe same as the one advanced before the Delhi HighCourt 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 to beforecharging of interest under Section 234A, 234B and 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 side arethe same as the one advanced before the Delhi HighCourt 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 to beforecharging of interest under Section 234A, 234B and 234C of the Act. We are in agreement with thereasoning given by the Delhi High Court. Thelearned counsel appearing for the revenue has notproduced any materials or given compelling reasons totake a contrary view with that of the Delhi HighCourt. In such circumstances, we answer thefirst question in favour of the assessee and againstthe revenue.......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 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 to theone 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 /true copy/ Sub Asst.Registrar krr To 1. The Commissioner of Income Tax (Appeals) V, Chennai 2. The Income Tax Appellate Tribunal, Chennai 'B' Bench, Chennai. 3.The Asst. Commissioner of Income Tax,Company Circle (4), Chennai-34. 4.The Asst.Registrar,Income Tax Appellate Tribunal,Rajaji Bhavan, Besant Nagar, Chennai-90. +1cc to M/s. Pushya Sitaraman, Advocate Sr 19921 KGK(CO) km/4.6. T.C.(A)No.710 of 2007