2012 (6) TMI 890 - AT - Income Tax

Summary

Issues involved: Interpretation of u/s.115JAA for credit in case of amalgamation, Permissibility of adjustments u/s.143(1)

The appeal was filed by the assessee against the order of the Commissioner of Income-tax (Appeals)-I at Coimbatore dated 29.6.2011, pertaining to the assessment year 2009-10 u/s.143(1) of the Income-tax Act, 1961. The main contention of the assessee was that the amalgamated company should be entitled to credit u/s.115JAA for taxes paid by the amalgamating companies, as the assets and liabilities of the amalgamating company become those of the amalgamated company post amalgamation. The assessee argued that there is no restriction in sec.115JAA regarding the carry forward and set off of MAT credit from the amalgamating company to the amalgamated company, unlike in the case of unlisted public companies or private companies converted into limited liability partnerships.

The Tribunal agreed with the grounds raised by the assessee, stating that the amalgamated company is indeed entitled to the credit available to the amalgamating company u/s.115JAA. Additionally, the Tribunal noted that the adjustment made by the Assessing Officer during the proceedings u/s.143(1) was impermissible. It was emphasized that proactive adjustments should not be made at this stage, and if the Assessing Officer required scrutiny of MAT credit details, a notice u/s.143(2) should be issued for further proceedings.

Consequently, the Tribunal allowed the appeal of the assessee and directed the Assessing Officer to provide the MAT credit as requested. The order was pronounced in an open court on Wednesday, the 6th of June, 2012, at Chennai.