Commissioner Of Income Tax Madurai Appellant v. M/S Raju Spinning Mills P Ltd D

Dated : 15.04.2009 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN and THE HONOURABLE MR.JUSTICE M.M.SUNDRESH Tax Case (Appeal)No.246 of 2009 Commissioner of Income TaxMadurai Appellant v. M/s Raju Spinning Mills P LtdD.No.1110-B, Cotton MarketRajapalayam. Respondent Tax Case Appeal filed under section 260A of the Income Tax Act, 1961 against the order of theIncome Tax Appellate Tribunal, Madras 'B' Bench, Chennai, dated 29.08.2008 passed in ITANo.2103/Mds/07. For appellant : Mrs.Pushya Sitaraman JUDGMENT(Judgment of the Court was delivered byK.RAVIRAJA PANDIAN, J.) The revenue on appeal against the order of the Income Tax Appellate Tribunal, Madras 'B' Bench,Chennai, 29.08.2008 passed in ITA No.2103/Mds/07 in respect of the assessment year 2000-01. 2. The assessee is a Spinning Mill. For the Assessment Year 2000-01, the assessee filed its return ofincome, wherein the Assessing Officer has calculated the interest payable u/s 234B and 234Cwithout considering the MAT credit u/s 115JAA paid in the earlier years and thus completed theassessment. On appeal, the Commissioner of Income Tax (Appeals) directed the Assessing Officer toallow the credit of MAT paid by the assessee in the earlier years before calculating the interestunder Section 234B and 234C of the Income Tax Act following the decision of the Tribunal in thecase of Chemplast Sanmar Pvt. Ltd reported in 83 TTJ 427 (Chennai). The Tribunal on further appealat the instance of the revenue dismissed the appeal. Aggrieved by the same, the revenue filed thepresent appeal by formulating the following questions of law:- "1. Whether in the facts and circumstances of the case, the Tribunal was right in holding that theassessee is entitled to adjust the MAT credit before charging interest u/s 234B and 234C? 2. Whether on the facts and circumstances of the case the MAT credit can be given priority of set offagainst tax payable, contrary to the scheme of Schedule G of Form 1?". 3. We heard the arguments of the learned counsel for the appellant and perused the materialsavailable on record. 4. The very same issues have been considered by the Division Bench of this Court in T.C.A.Nos.887of 2004 etc. batch on 09.04.2009. In respect of the first question of law, the Division Bench hasanswered in favour of the assessee and against the revenue by observing as follows by concurringwith CIT vs. Jindal Experts Ltd., (2009) 222 CTR 8 (Delhi):- "7.In respect of the first question of law, the arguments advanced by the counsel on either side arethe same as the one advanced before the Delhi High Court cited supra. The Delhi High Court hasconsidered the relevant provisions and dealt with the matter in detail and held that the credit underSection 115JAA should be given effect to before charging of interest under Section 234A, 234B and234C of the Act. We are in agreement with the reasoning given by the Delhi High Court. The learnedcounsel appearing for the revenue has not produced any materials or given compelling reasons totake a contrary view with that of the Delhi High Court. In such circumstances, we answer the firstquestion in favour of the assessee and against the revenue. 5. In respect of the 2nd question of law, the Division Bench has observed as follows:- 5. In respect of the 2nd question of law, the Division Bench has observed as follows:- "18. In the present case, the intention of the legislature is to give tax credit to tax and not to the taxand interest. Once the intention is clear, the revenue cannot rely on the Form-I to say that the MATcredit under Section 115JAA should be given only after tax and interest. Further we have answeredthe first question of law in favour of the assessee i.e. the MAT credit under Section 115JAA should begiven effect to before charging the interest under Section 234B and 234C. Rule 12(1)(a) and Form-Icannot go beyond the provisions of the Act. Form-I cannot lay down the order of priority ofadjustment of TDS, advance Tax, MAT credit under Section 115JAA which is contrary to theprovisions of the Act. The order passed by the Tribunal is in accordance with law and we do not findany error or illegality in the order of the Tribunal so as to warrant interference. Accordingly, weanswer the questions 2 and 3 also in favour of the assessee and as against the Revenue. Thus both the questions of law have been answered against the revenue in favour of the assessee. 6. The questions of law in this case also are identical as the one considered by the Division Bench.Following the Division Bench Judgment cited supra, the appeal is dismissed. (K.R.P.,J.) (M.M.S.,J.)15.04.2009Index : Yes/Internet : Yes/rgToTo 1. The Commissioner of Income TaxMadurai 2. The Income Tax Appellate Tribunal, K.RAVIRAJA PANDIAN, J. And M.M.SUNDRESH, J. rg T.C.(A)No.246 of 2009 15.04.2009