9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (1) TMI 677 - AT - Income TaxAdjustment made u/s.143(1) - incorrect computation of allowable MAT credit u/s 115JAA - set off of MAT credit inclusive of surcharge and education cess and recompute the tax payable by the assessee for the year under consideration - HELD THAT - Format ITR-6 was amended from A.Y. 2012-13 wherein the tax liability in Part-B -TTI both under normal provisions and under MAT provisions computed including surcharge and cess. MAT credit is computed automatically using the prescribed algorithm which is nothing but the balancing figure i.e. different between tax liability and MAT liability including surcharge and cess. Therefore, post A.Y. 2012-13 as the format of ITR-6 is so designed to compute MAT credit automatically using the prescribed algorithm i.e. difference between tax liability and MAT liability including surcharge and cess is a balancing figure. In our view there cannot be any debate as to the exclusion of surcharge and cess. Therefore, the observation of the Ld.CIT(A) that the issue is debatable one is not sustainable. Further, we observe that majority of the decisions including the decisions of the Hon'ble Calcutta High Court and Hon'ble Madras High Court are in favour of the assessee and therefore it cannot be said that it is a debatable issue. In the circumstances, respectfully following the above said decisions allowing the grounds of appeal of the assessee, we direct the Assessing Officer to allow set off of MAT credit inclusive of surcharge and education cess and recompute the tax payable by the assessee for the year under consideration.See Tata Motors Ltd. 2021 (7) TMI 207 - ITAT MUMBAI We note that the above case law fully applies here. We further note that the present case of the assessee is even on a better footing. The Ld.CIT(A) has dismissed the assessee s appeal without referring to any case law. The case law referred on the subject in favour of the assesee were duly referred before Ld.CIT(A) which are ignored. Hence, this bring us to a legal issue as to whether this adjustment u/s. 143(1) by the CPC, Bengaluru is legally sustainable. As apparent from the case law mentioned above, this issue is not amenable to any prima-facie adjustment as provided in section 143(1). Though, assessee has not raised this aspect, before Ld.CIT(A), there is no estoppel as to law. Hence, we hold that this adjustment was not liable to be made u/s. 143(1). Hence, the order is quashed on that account. On merits also, the issues stands covered. - Decided in favour of assessee.
Issues Involved:
1. Incorrect computation of allowable MAT credit under Section 115JAA of the Income Tax Act. 2. Levy of interest under Sections 234A, 234B, and 234C of the Income Tax Act. Detailed Analysis: Issue 1: Incorrect Computation of Allowable MAT Credit Under Section 115JAA Background: The Assessee challenged the computation of MAT credit by the Assessing Officer (AO) and the subsequent upholding of this computation by the Commissioner of Income Tax (Appeals) [CIT(A)]. The primary contention was the exclusion of surcharge and education cess in the computation of MAT credit under Section 115JAA. Assessee's Argument: - The Assessee argued that tax, as defined under Section 115JAA, includes surcharge and education cess. - The MAT credit should be calculated as the difference between the tax paid under Section 115JB and the tax payable under normal provisions, both inclusive of surcharge and education cess. - The Assessee cited several judicial precedents supporting their claim that MAT credit should include surcharge and education cess. CIT(A)'s Decision: - The CIT(A) upheld the AO's computation, stating that the MAT credit was correctly calculated by excluding surcharge and education cess. - The CIT(A) did not address the case laws cited by the Assessee. Tribunal's Analysis: - The Tribunal reviewed multiple cases, including decisions from the Calcutta High Court in SREI Infrastructure Finance Ltd. v. DCIT, and various ITAT benches, which supported the Assessee's position that MAT credit should include surcharge and education cess. - The Tribunal noted that the CIT(A) failed to consider these judicial precedents and incorrectly upheld the AO's computation. Tribunal's Decision: - The Tribunal ruled in favor of the Assessee, directing the AO to recompute the MAT credit inclusive of surcharge and education cess. - The Tribunal also noted that such adjustments are not permissible under Section 143(1), thus quashing the order on this account as well. Issue 2: Levy of Interest Under Sections 234A, 234B, and 234C Background: The Assessee contested the computation of interest under Sections 234A, 234B, and 234C by the AO, which was upheld by the CIT(A). Assessee's Argument: - The Assessee argued that the interest was wrongly computed and should be recomputed correctly. Tribunal's Analysis: - The Tribunal did not provide a detailed analysis on this issue, as the primary focus was on the MAT credit computation. - Given the decision on the first issue, the Tribunal implied that the recomputation of tax liability would also necessitate a recomputation of interest under Sections 234A, 234B, and 234C. Tribunal's Decision: - The Tribunal allowed the appeal, directing the AO to recompute the interest after correctly computing the MAT credit. Conclusion: The Tribunal allowed the Assessee's appeals for both assessment years 2014-15 and 2015-16. The AO was directed to recompute the MAT credit inclusive of surcharge and education cess and to adjust the interest computation accordingly. The Tribunal emphasized adherence to judicial precedents and proper legal interpretation in the computation of tax liabilities.
|
