Commissioner Of Income Tax Chennai v. M/S.anusha Investments Ltd., Jayalakshmi Estates 24 Haddows Road Chennai – 96

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 30.04.2009 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIANandTHE HONOURABLE MR.JUSTICE M.M.SUNDRESH Tax Case (Appeal)No.875 of 2007 Commissioner of Income TaxChennai ... Appellantv. M/s.Anusha Investments Ltd.,Jayalakshmi Estates24 Haddows RoadChennai – 96.... Respondent Tax Case Appeal filed under section 260A of the Income Tax Act,1961 against the order of the Income Tax Appellate Tribunal, Madras'A' Bench, Chennai, dated 3.3.2006 passed in ITA No.1162/Mds/2003relating to the assessment year 1998-99 against ITA NO.302/2002-03/A-III dated 10.3.2003 on the file of the office of the Commissioner ofIncome Tax (Appeals)-III Chennai-34 against GIR No.AX4-437/1998-99dated 9.12.2002 on the file of the Deputy Commissioner of Income Tax,Company Circle I (1) Chennai. For appellant :Mrs.Pushya SitaramanFor Respondent:Mr.R.Venkatnarayananfor M/s.Subbaraya AiyarJUDGMENT (Judgment of the Court was delivered byK.RAVIRAJA PANDIAN,J.) The appeal has been preferred by the revenue against the order ofthe Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai, dated3.2.2006 passed in ITA No.1162 /Mds/2003 relating to the assessmentyear 1998-99. 2. The material facts as culled out from the statement of factsin the memorandum of grounds of appeal are stated below:- The assessee filed a return of income for assessment year 1998-99. For the preceding assessment year, the assessee had paid minimum https://hcservices.ecourts.gov.in/hcservices/ alternate tax (MAT) under Section 115J and the MAT credit was carriedunder Section 115JAA to be set off against the tax payable. Theassessing officer while completing the proceedings under Section 154rectified his order and accordingly gave MAT credit after charginginterest under Section 234B and 234C. Aggrieved by the same, theassessee filed an appeal before the Commissioner of Income Tax(Appeals), who held that MAT credit is nothing but the assessee'scredit lying with the Government available to the assessee foradjustment against the tax due in the subsequent years on normallycomputed income, and the tax credit brought forward is to beautomatically adjusted against by virtue of the provisions of Section115JAA(4). The revenue filed a Second Appeal to the Income TaxAppellate Tribunal and the Tribunal allowed the appeal in favour ofthe assessee following its earlier order in the case of ChemplastSanmar Limited for the assessment year 2002-2003. Aggrieved by theorder of 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 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 234B and234C 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 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 answered infavour 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 with thematter in detail and held that the credit under https://hcservices.ecourts.gov.in/hcservices/ 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 answered infavour 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 with thematter in detail and held that the credit under https://hcservices.ecourts.gov.in/hcservices/ Section 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. ...... 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." 5. The questions of law in this appeal are identical to the oneconsidered by the Division Bench. Therefore, following the DivisionBench Judgment stated supra, the appeal is dismissed since thequestions of law have already been answered in favour of the assessee. /true copy/ krr https://hcservices.ecourts.gov.in/hcservices/ To 1. The Commissioner of Income Tax Chennai Chennai 2. The Assistant Registrar, Income Tax Appellate Tribunal, Chennai 'A' Bench, Chennai. Income Tax Appellate Tribunal, Chennai 'A' Bench, Chennai. 3. The Commissioner of Income-Tax(Appeals)-III Chennai. Chennai. 4. The Deputy Commissioner of Income Tax, Company Circle I(1) Chennai. Company Circle I(1) Chennai. + 1 CC To Mr.Pushya Sitaraman, Advocate SR NO.19920 T.C.(A)No.875 of 2007 KLT {CO}TP/4.6.2009.