9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (6) TMI 611 - HC - Income TaxInterest under Section 244A on refund - benefit of MAT credit under Section 115JAA - Tribunal allowed claim - Held that - In the present case, originally the Commissioner of Income Tax (Appeals) has correctly interpreted the provisions of Section 115JAA(4) of the Income Tax Act to the effect that tax credit should be allowed set-off in a year when tax becomes payable on the total income computed in accordance with the provisions of this Act other than Section 115JA or Section 115JB, as the case may be. He rightly held that the assessee is not expected to pay the advance tax to the extent of MAT credit brought forward from the preceding years. Only the balance tax liability remaining, if any, after such set off, is payable by the assessee as advance tax. If that is so, the MAT credit that is available should be allowed to set off and thereafter the tax liability has to be determined taking note of the Advance Tax paid and the TDS available. In CIT Versus Tulsyan NEC Ltd. 2010 (12) TMI 23 - Supreme Court of India came to the conclusion that insofar as priority is concerned, MAT credit should be taken into account and thereafter credit should be given to Advance Tax paid and TDS etc. The Supreme Court rejected the contention of the Department that even if there is a MAT Credit balance, the assessee is required to pay the Advance Tax and if he fails to pay, interest under Section 234 would be chargeable, thereby, making it clear that MAT credit should be first given effect to. The Supreme Court having thus cleared the position of law that priority should be given first on the adjustment of MAT Credit, we have no hesitation to hold that the order of the Tribunal is in consonance with the statutory provision of law as propounded by the Supreme Court in the above-said decision. - Decided against revenue.
Issues Involved:
1. Whether the Tribunal was justified in allowing the appeal filed by the assessee, who claimed interest under Section 244A of the Income Tax Act consequent to the benefit of MAT credit under Section 115JAA of the Income Tax Act extended to the assessee. Issue-wise Detailed Analysis: 1. Tribunal's Justification in Allowing the Appeal for Interest under Section 244A: The Revenue challenged the Tribunal's decision to set aside the orders of the lower authorities and decide the issue in favor of the assessee, who claimed interest under Section 244A of the Income Tax Act consequent to the benefit of MAT credit under Section 115JAA. The assessment year in question is 1998-99. The assessee's taxable income was determined, and tax was computed. The assessee's appeal to the Commissioner of Income Tax (Appeals) resulted in a favorable order, directing the Assessing Officer to give credit for MAT payment and adjust the interest payments accordingly. The Assessing Officer's subsequent order did not comply with this directive, leading to another corrected order. The assessee requested interest on the refund determined after adjusting TDS and Advance Tax. The Deputy Commissioner of Income Tax denied this request, citing proviso under Section 115JAA (2). The Commissioner of Income Tax (Appeals) upheld this decision. The Tribunal, however, found the assessee's claim justified, noting an error by the Assessing Officer in giving effect to the original order of the Commissioner of Income Tax (Appeals). The High Court noted that the Departmental Representative conceded the error before the Tribunal. The Court examined the relevant provisions, including Section 115JA and the Supreme Court's decision in COMMISSIONER OF INCOME-TAX v. TULSYAN NEC LTD, which clarified the priority of MAT credit adjustment. The Supreme Court held that MAT credit should be set off first, followed by adjustments for Advance Tax and TDS, and clarified that the right to MAT credit crystallizes upon tax payment under Section 115JA. The High Court concluded that the Tribunal's order was consistent with the statutory provisions and the Supreme Court's interpretation. Therefore, the question of law was answered against the Revenue and in favor of the assessee, affirming the Tribunal's decision to allow interest under Section 244A on the refund. Conclusion:
|
