Commissioner Of Income Tax Coimbatore v. M/S.premier Polyweaves Pvt.ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 20.04.2009 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIANandTHE HONOURABLE MR.JUSTICE M.M.SUNDRESH Tax Case (Appeal)Nos.1090 to 1092 of 2007 Commissioner of Income TaxCoimbatore ..Appellant in all T.Cs.v. M/s.Premier Polyweaves Pvt.Ltd.,NO.244, A.T.D.Street, Race CourseCoimbatore – 18. ..Respondent in all T.Cs. Tax Case Appeals in T.C.(A) Nos.1090 to 1092 of 2007 are filedunder section 260A of the Income Tax Act, 1961 against the order ofthe Income Tax Appellate Tribunal, Madras 'D' Bench, Chennai, dated28.7.2006 passed in ITA Nos.1245, 1246 and 1247/Mds/2005 respectivelyand against the order of the Commissioner of Income Tax (Appeals)Office of the Commissioner of Income Tax (Appeals)I Coimbatore inITA.No.254, 255 and 313/04-05 dated 24.02.2005 respectively for theassessment year 2000-01. For Appellant : Mr.J.NareshkumarFor Respondent : Mr.VenkatnarayananJUDGMENT (Judgment of the Court was delivered by K.RAVIRAJA PANDIAN,J.) The appeals in T.C.(A) Nos.1090 to 1092 of 2007 have beenpreferred by the revenue against the order of the Income TaxAppellate Tribunal, Madras 'D' Bench, Chennai, dated 28.7.2006 passedin ITA Nos.1245, 1246 and 1247/Mds/2005 respectively. 2. The issue involved in all the appeals is one and the same.The material facts as culled out from the statement of facts in thememorandum of grounds of appeal in T.C.(A) No.1090 of 2007 are statedbelow:- The assessing officer while proceeding under Section 154 grantedMAT credit after calculating the interest under Section 234B and C asagainst the claim oft he assessee that cognizance of the MAT creditshould betaken prior to calculation of the interest under Section234B. Aggrieved by the same, the assessee filed appeal before theCommissioner of Income Tax (Appeals), who allowed the appealfollowing the decision of the Tribunal in Chemplast Sanmar Limited.The revenue filed Second Appeal before the Income Tax AppellateTribunal, which following its own order in the case of ChemplastSanmar held that the assessee is entitled to adjust the MAT creditfirst before charging of interest under Section 234B and 234C anddismissed the appeal. Aggrieved by the same, the the revenue hasfiled this appeal by formulating the following questions of law: "1. Whether in the facts and circumstances ofthe case, the Tribunal was right in holding that theMAT 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 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 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 on 09.04.2009and the Division Bench has answered in favour of the assessee andagainst the revenue by 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 a "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 a contrary 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 these appeals are identical to theone considered by the Division Bench. Following the Division BenchJudgment stated supra, the appeals are dismissed since the questionsof law have already been answered in favour of the assessee. /true copy/ usk To 1. The Commissioner of Income Tax, Coimbatore. 2. The Income Tax Appellate Tribunal, Chennai 'D' Bench, Chennai. 3. The Assistant Registrar, Income Tax Appellate Tribunal II Floor, Rajaji Bhavan, Besant Nagar, Madras-90. https://hcservices.ecourts.gov.in/hcservices/