2015 (2) TMI 1180 - AT - Income Tax

Short credit of MAT - Held that - This ground of appeal was allowed by the CIT(A). Thus we find that on this issue, the assessee has no grievance against the order of CIT(A). Further the Ld. Authorized Representative of the assessee has submitted that despite the directions of the CIT(A), the Assessing Officer has not given effect in granting MAT credit as per orders of this Tribunal and CIT(A). Accordingly, we direct the Assessing Officer to give effect to the orders of this Tribunal and CIT (A) for the A.Y. 2003-04 and 2004-05 and accordingly grant the MAT credit to the assessee. Granting MAT credit against the tax liability prior to levy of surcharge and education cess - Held that - We direct the Assessing Officer to allow the MAT credit against the tax liability payable before surcharge and education cess or alternatively the amount of MAT credit should also be inclusive of surcharge and education cess and then allow the credit against the tax payable inclusive of surcharge and education cess.

Summary

Issues:
1. Credit for Minimum Alternative Tax (MAT) paid in terms of section 115JAA.
2. Incorrect levy of interest under sections 234B and 234C.

Analysis:

Issue 1: Credit for Minimum Alternative Tax (MAT)
The appeal was against the order of the Commissioner of Income-tax (Appeals) for A.Y. 2009-10 regarding the credit for MAT paid. The assessee claimed a higher credit than allowed by the Assessing Officer. The CIT(A) directed the Assessing Officer to grant MAT credit as per the orders of the Tribunal and CIT(A). The assessee had no grievance against this decision. However, despite the directions, the Assessing Officer did not grant MAT credit as per the orders. The ITAT directed the Assessing Officer to give effect to the orders of the Tribunal and CIT(A) for the relevant assessment years and grant MAT credit accordingly.

Issue 2: Incorrect levy of interest under sections 234B and 234C
The second ground of appeal was related to the incorrect levy of interest under sections 234B and 234C. The Tribunal referred to a similar case involving Wyeth Limited Vs. ACIT, where the issue was considered. The Tribunal noted that MAT credit should be allowed against the tax liability payable before surcharge and education cess, or alternatively, the MAT credit amount should include surcharge and education cess before being allowed against the tax payable inclusive of surcharge and education cess. The ITAT set aside the orders of the authorities below and directed the Assessing Officer to allow MAT credit in accordance with the above principles. Regarding the levy of interest under sections 234B and 234C, the Tribunal stated that it was consequential, and no separate finding was required. Consequently, the appeal of the assessee was allowed.

In conclusion, the ITAT Mumbai, in the judgment dated February 12, 2015, addressed the issues of MAT credit and the incorrect levy of interest under sections 234B and 234C. The ITAT directed the Assessing Officer to grant MAT credit as per the Tribunal and CIT(A) orders and to allow MAT credit against the tax liability before surcharge and education cess or inclusive of surcharge and education cess. The Tribunal found in favor of the assessee on both issues and allowed the appeal.