Commissioner of Income Tax vs The Nadar Press

K. Raviraja Pandian, J.—The revenue is on appeal against the order of the Income Tax Appellate Tribunal, Madras ''C'' Bench, Chennai,

dated 02.06.2006 passed in ITA Nos. 1774/Mds/2005 for the assessment year 2002-03.

The assessee filed its return of income for the assessment years 2002-03. The assessing officer, in the proceedings u/s 143(1)(a) of the Income

Tax Act, allowed the MAT credit and refund was arrived. In the proceedings u/s 143(3) of the Act MAT credit was not granted and the refund

was determined as excess. The assessee appealed against the order of assessment to the Commissioner of Income Tax (Appeals), who allowed

the appeal following the decision of the Tribunal in Chemplast Sanmar Ltd.''s case and the assessing officer was directed to allow the MAT credit

as per intimation u/s 143(1)(a) of the Act. The revenue carried the matter to the Tribunal. The Tribunal following its earlier order in the case of

M/s. Chemplast Sanmar Ltd., held that the assessee is entitled to adjust the MAT credit first before charging of interest u/s 234B and 234C of the

Act. The revenue is thus before us in this appeal.

The appeal was admitted by this Court on the following substantial questions of law:

Whether in the facts and circumstances of the case, the Tribunal was right in holding that the MAT credit is to be set off from the tax payable

before setting off the tax deducted at source and advance tax paid?

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?

Whether on the facts and in the circumstances of the case, the interest u/s 234B and 234C had to be calculated after giving the MAT credit

against the tax payable on the basis of normal computation?

Whether on the facts and circumstances of the case, the Tribunal is right in allowing the set off of MAT credit as per Section 115JAA(5) of the

Act and granting the refund of MAT credit?

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. The

questions of law have been 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 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, all the questions have been answered in favour of the assessee and against the revenue.

Following the judgment of the Division Bench in T.C. (As) Nos. 887 of 2004 etc. batch dated 09.04.2009 referred to supra and for the reasons

stated therein, the appeal is dismissed.