IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 27.04.2009 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN and THE HONOURABLE MR.JUSTICE M.M.SUNDRESH Tax Case (Appeal)No.646 of 2008 Commissioner of Income Tax Chennai Appellant v. M/s.Ucal Fuel Systems Limited "Rheja Towers" Delta Wing Unit 505, VII Floor 177, Anna Salai Chennai 600 002. Respondent Tax Case Appeal filed under section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras 'C' Bench, Chennai, dated 16.11.2007 passed in ITA No.2192/Mds/2006 relating to the assessment year 2002-2003. For appellant : Mrs.Pushya Sitaraman For Respondent: Mr.Venkatanarayanan JUDGMENT
(Judgment of the Court was delivered by
K.RAVIRAJA PANDIAN,J.)
The appeal has been preferred by the revenue against the order of the Income Tax Appellate Tribunal, Madras ‘C’ Bench, Chennai, dated 16.11.2007 passed in ITA No.2192/Mds/2006 relating to the assessment year 2002-2003.
2. The material facts as culled out from the statement of facts in the memorandum of grounds of appeal are stated below:-
For the assessment year 2002-2003 the assessing officer calculated the interest payable under Sections 234B and 234C and gave credit for the MAT thereafter. Aggrieved by the order of the assessing officer the assessee filed an appeal before the Commissioner of Income Tax (Appeals), who directed the assessing officer to give MAT credit before computation of interest payable under Section 234B and 234C of the Act. Aggrieved by the said order, the revenue filed appeal to the Income tax Appellate Tribunal, which followed the decision of Chemplast Sanmar Limited Vs. DCIT, (2004) 83 TTJ (Chennai) 427 on the issue of whether MAT credit can be given before charging interest under Section 243B and 2423C of the Act and held in favour of the assessee and followed the proposition that for the purpose of computing the interest the tax payable after the MAT setoff should only be taken into consideration. Aggrieved by the order of the Income-tax Tribunal, the revenue has filed this appeal by formulating the following questions of law:
“1. Whether in the facts and circumstances of the case, the Appellate Tribunal was right in ignoring the fact that the above issue had already been allowed to become final by the assessee when the assessee has not chosen to agitate the issue in the earlier stages?
2. Whether in the facts and circumstances of the case, the Tribunal was right in holding that MAT credit is to be set off from the tax payable before setting off the tax deducted at source and advance tax paid?
3. Whether on the facts and circumstances of the case the MAT credit can be given priority of set off against 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 materials available on record.
4. The very same issues have been considered by the Division Bench of this Court in T.C.A.Nos.887 of 2004 etc. batch on 09.04.2009 and the Division Bench has answered in favour of the assessee and against the revenue by observing as follows:
“7.In respect of the first question of law, the arguments advanced by the counsel on either side are the same as the one advanced before the Delhi High Court cited supra. The Delhi High Court has considered the relevant provisions and dealt with the matter in detail and held that the credit under Section 115JAA should be given effect to before charging of interest under Section 234A, 234B and 234C of the Act. We are in agreement with the reasoning given by the Delhi High Court. The learned counsel appearing for the revenue has not produced any materials or given compelling reasons to take a contrary view with that of the Delhi High Court. In such circumstances, we answer the first question in favour of the assessee and against the revenue. ……
18. In the present case, the intention of the legislature is to give tax credit to tax and not to the tax and interest. Once the intention is clear, the revenue cannot rely on the Form-I to say that the MAT credit under Section 115JAA should be given only after tax and interest. Further we have answered the first question of law in favour of the assessee i.e. the MAT credit under Section 115JAA should be given effect to before charging the interest under Section 234B and 234C. Rule 12(1)(a) and Form-I cannot go beyond the provisions of the Act. Form-I cannot lay down the order of priority of adjustment of TDS, advance Tax, MAT credit under Section 115JAA which is contrary to the provisions of the Act. The order passed by the Tribunal is in accordance with law and we do not find any error or illegality in the order of the Tribunal so as to warrant interference. Accordingly, we answer the questions 2 and 3 also in favour of the assessee and as against the Revenue.”
5. The questions of law in this appeal are identical to the one considered by the Division Bench. Therefore, following the Division Bench Judgment stated supra, the appeal is dismissed since the questions of law have already been answered in favour of the assessee.
(K.R.P.,J.) (M.M.S.,J.)
27.04.2009
Index : Yes/No
Internet : Yes/No
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To
1. The Commissioner of Income Tax
Chennai
2. The Income Tax Appellate Tribunal,
Chennai ‘C’ Bench, Chennai.
K.RAVIRAJA PANDIAN, J.
And
M.M.SUNDRESH, J.
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T.C.(A)No.646 of 2008
27.04.2009