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2022 (12) TMI 1323 - AT - Income TaxRectification of mistake u/s 154 - Difference of MAT credit not allowed to the assessee as related to surcharge and cess components of the MAT taxes paid in earlier years - AO had computed the MAT credit allowable to the assessee as per provision of section 115JAA(5) of the Act only considering the normal tax components and excluded surcharge and cess from the same - HELD THAT - We have noted that the ld.CIT(A) dismissed the assessee s appeal on the ground that there was no representation made by the assessee before him. Assessee has pointed out that on the last date of hearing, he did file written submissions to the ld.CIT(A). Be that so, we have noted the contentions of the ld.counsel for the assessee on merit also, and we find that rectification application filed by the assessee is to the effect that the assessee be allowed benefit of MAT credit as per section 115JAA(5) of the Act by including surcharge and cess in the tax credit so calculated. Precisely, this is the only issue on which the assessee has sought rectification of the intimation u/s 143(1) of the Act. We find merit in the contentions of the ld.counsel for the assessee. In a series of the decisions, the Hon ble High Courts and the ITAT have held that the tax credit allowable under section 115JAA of the Act is including surcharge and cess components of tax thereon. Denial of tax credit u/s 115JAA of the Act to the extent of surcharge and cess components in the same, we agree with the ld.counsel for the assessee, is a mistake apparent from the record and rectification sought to this extent is therefore upheld. The rectification application filed by the assessee is therefore directed to be allowed, and adjustment of tax credit as claimed by the assessee is directed to be granted. The appeal of the assessee is allowed.
Issues:
1. Dismissal of appeal by ld.CIT(A) without considering submissions. 2. Discrepancy in allowing set-off of accumulated tax credit u/s.115JAA. 3. Computation of MAT credit including surcharge and cess components. Issue 1: Dismissal of appeal without considering submissions The assessee filed an appeal against the order passed by the ld.CIT(A) under section 250(6) of the Income Tax Act, 1961. The appeal was dismissed by the ld.CIT(A) on grounds of non-prosecution and lack of evidence from the assessee, despite written submissions being filed by the assessee before the last hearing. The Tribunal noted the contention of the assessee's counsel that the written submissions were not considered by the ld.CIT(A), and found merit in the argument. The Tribunal observed that the dismissal of the appeal without considering the submissions was unjustified. Issue 2: Discrepancy in allowing set-off of accumulated tax credit u/s.115JAA The dispute arose regarding the set-off of accumulated tax credit under section 115JAA of the Act. The AO allowed a credit of carry forward MAT credit to the extent of Rs.4,88,578/- instead of the claimed Rs.5,03,235/- by the assessee. The Tribunal examined the computation of MAT credit and observed that the difference in the credit amount not allowed to the assessee related to surcharge and cess components of the MAT taxes paid in earlier years. The Tribunal referred to relevant case law and upheld the rectification application filed by the assessee to claim the balance credit of taxes under section 115JB amounting to Rs.14,657/-. The Tribunal directed the grant of the claimed tax credit to the assessee. Issue 3: Computation of MAT credit including surcharge and cess components The Tribunal analyzed the computation of MAT credit, emphasizing the inclusion of surcharge and cess components in the tax credit calculation. The assessee contended that the tax credit under section 115JAA of the Act should include surcharge and cess, as per judicial precedents. The Tribunal referred to various court decisions supporting the inclusion of surcharge and cess in the tax credit calculation. Considering the consistent judicial view, the Tribunal held that the denial of tax credit to the extent of surcharge and cess components was a mistake apparent from the record. Consequently, the rectification application seeking adjustment of tax credit to the extent of Rs.14,657/- was allowed, and the appeal of the assessee was allowed in this regard. In conclusion, the Tribunal allowed the appeal of the assessee, directing the grant of the claimed tax credit under section 115JAA including surcharge and cess components. The judgment highlighted the importance of considering submissions in appeals and ensuring accurate computation of tax credits as per relevant provisions and judicial interpretations.
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