2009 (4) TMI 45 - HC - Income Tax

MAT credit - Whether the interest under Section 234 B and 234 C had to be calculated after giving the MAT credit against the tax payable on the basis of normal computation held that assessee is entitled to adjust the MAT credit before charging interest u/s 234B and 234C Whether the MAT credit can be given priority of set off against tax payable, contrary to the scheme of Schedule G of Form 1 AND Whether Tribunal was right in holding that MAT credit is to be set off from the tax payable before setting off the Tax deducted at Source and Advance tax paid held that 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 under Section 115JAA which is contrary to the provisions of the Act appeal of revenue is dismissed

Summary

The High Court of Madras, in the judgment delivered by Justice K. Raviraja Pandian and Justice M. M. Sundresh, heard an appeal by the revenue against an order of the Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai, dated 21.04.2006, concerning the assessment year 2000-01. The assessee filed its return for the assessment year 2000-01, and the Assessing Officer granted MAT credit after calculating the interest under Section 234B and 234C. The Commissioner of Income Tax (Appeals) allowed the appeal, and the Income Tax Appellate Tribunal also ruled in favor of the assessee, stating that the assessee is entitled to adjust the MAT credit before charging interest under Section 234B and 234C. The revenue filed an appeal against this decision, formulating questions regarding the priority of setting off MAT credit against tax payable, the scheme of Schedule G of Form 1, and the calculation of interest under Section 234B and 234C. The Division Bench of the Court, in T.C.A.Nos.887 of 2004, answered in favor of the assessee, holding that the MAT credit should be given effect before charging interest, and that the order of the Tribunal was in accordance with the law. Therefore, all questions of law were answered against the revenue in favor of the assessee, leading to the dismissal of the appeal. The judgment in this case was consistent with the earlier Division Bench ruling.