Commissioner of Income Tax vs Gangotri Textiles

K. Raviraja Pandian, J.—The appeal has been preferred by the revenue against the order of the Income Tax Appellate Tribunal, Madras

''D'' Bench, Chennai, dated 22.09.2006 passed in ITA No. 220/Mds/2006.

The material facts culled out from the statement of facts in the memorandum of grounds of appeal are as follows:

The assessing officer passed an order u/s 154 of the Income Tax Act wherein he has given credit for brought forward MAT credit after charging of

interest u/s 234B and 234C. While computing the tax first, computation of tax was to take place and thereafter credit for MAT available u/s 115

JAA, TDS and advance tax were to be reckoned with and thereafter only interest u/s 234B and 234C had to be taken note of. Aggrieved by the

same appeal was filed before the Commissioner of Income Tax (Appeals), who following the judgement in the case of Chemplast Sanmar Limited

decided the issue in favour of the assessee. The revenue filed appeal before the Tribunal, which following its judgement in the case of Chemplast

Sanmar Limited dismissed the appeal of the revenue. Aggrieved by the same, the revenue has filed this appeal by formulating the following

questions of law:

Whether in the facts and circumstances of the case, the Tribunal is right in holding that the charging of interest u/s 234 B and C after considering

the MAT credit available to the assessee was proper?

Whether on the facts and in the circumstances of the case, the Income Tax Tribunal is right in law in not considering the judgment of the Madras

High Court reported in Gopal Trading Co. Vs. Commissioner of Income Tax, ?

Whether on the facts and in the circumstances of the case, the Income Tax Tribunal is right in law in holding that for the purpose of computing

interest credit u/s 115 JAA should be set off and the interest can be imposed only on net liability?

We heard the arguments of the learned Counsel for the appellant and perused the materials available on record.

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. In

respect of the first question of law, the Division Bench has answered in favour of the assessee and against the revenue by observing as follows by

concurring with CIT v. Jindal Experts Ltd. (2009) 222 CTR 8 (Del):

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 u/s

115JAA should be given effect to before charging of interest u/s 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.

In respect of the other questions of law, the Division Bench has observed as follows:

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 u/s 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 u/s 115JAA should be given effect to before charging the interest u/s 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 u/s 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.

Thus both the questions of law have been answered against the revenue in favour of the assessee.

The questions of law in this case also are identical to the one considered by the Division Bench. Following the Division Bench Judgment cited

supra, the appeal is dismissed since the questions of law have already been answered in favour of the assessee.