9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (7) TMI 158 - AT - Income TaxCondonation of delay - delay of 30 days - HELD THAT - As on 22nd of April 2019 the learned CIT A passed two orders in case of the assessee for same assessment year 2013 14 in two subject matters i.e. one was against the order passed u/s 143 (3) of the act and second was against the order passed u/s 154 of the act withdrawing MAT credit. On the legal advice, the assessee preferred an appeal, which was delayed by 30 days. According to us, delay was for the sufficient cause and assessee did not derive any benefit by filing delayed appeal. Further, before ITAT, cause of justice must be served and pedantic approach should be abdicated. Therefore relying on the decision of the honourable Supreme Court in case of collector, land acquisition versus MST Katiji 1987 (2) TMI 61 - SUPREME COURT we condone the delay and proceed to decide the issue is on merits. Rectification of mistake u/s 154 - reduction of MAT credit u/s 115 JAA - debatable issue or not? - HELD THAT - Amount of tax credit Under the above sections shall be carried forward and set-off in a future year in which tax becomes payable on the total income computed in accordance with the provisions other than Section 115JB. Thus, it is clear that it can be set-off in that year when tax computed under normal provision is more than a minimum alternate tax payable by the assessee. There is an outer time limit provided, that it cannot be carried forward beyond 10 years. There is no other condition to claim the benefit of the set off credit has been prescribed. Furthermore, there is no provision that the assessing officers should determine the tax credit, which shall be carried forward and set off. It is an inbuilt mechanism of the law of the credit and set off - on application of a particular formula, if the tax payable Under the normal computation is higher than the minimum alternate tax payable by the assessee, and if the assessee has MAT credit available, same shall be granted as a credit to the assessee against the tax liability - No option available either to the assessing officer or to the assessee. AR also could not show us that this issue is debatable. According to us, language of law is simple and clear - we reject the argument of the learned authorised representative that MAT credit is also an option to the assessee. We do not find that there is such option available to the assessee. It is automatic. Therefore, we do not find any debatable issue involved in adjusting the MAT credit against the tax liability of the assessee. In the present case, MAT credit given to the assessee was found to be a mistake apparent from the record. We do not find any reason to disturb the finding of the lower authorities that the learned assessing officer has correctly assumed jurisdiction u/s 154 of the income tax act to rectify MAT credit granted to the assessee wrongly. We dismiss ground number 1.1 of the appeal. Transfer pricing adjustment confirmed by the learned Dispute Resolution Panel - Merely because the assessee has disputed the assessment before the higher appellate forum, it does not deprive the right of the revenue to rectify the assessment order or the tax demand raised against the assessee provided the action of the assessing officer false within the parameters of Section 154 of the act. Learned CIT A has correctly rejected this argument of the assessee. Even otherwise, if the assessee gets any relief on account of the order of the appellate authorities, naturally, the income and the consequent tax liability of the assessee would be adjusted pursuance thereto. Therefore, pendency of appeal before the higher forum cannot be a ground to hold that the order passed by the learned assessing officer u/s 154 of the act is not proper, if it is otherwise in order. Therefore, upholding the orders of the lower authorities, we do not find any merit in ground number 1.2 of the appeal. Charging interest u/s 234B - HELD THAT - The provisions of Section 234B in a clear term impose mandate to collect interest at the rates stipulated therein. There is no discretion is available at the end of the assessing officer or with the assessee to not to compute/pay the above interest. Thus, it is clear that the provisions of Section 234B are mandatory and the assessing officer is dutybound to charge interest u/s 234B of the income tax act. The honourable courts have granted certain leniency if there is a shortfall arising because of the interpretation of the law or unclear tax liability to the assessee. It may also happen where the advance tax liability arises because of a subsequent court ruling or an amendment. In all these cases, courts have taken a lenient view to not to allow the assessing officer to charge interest u/s 234B of the act. However, before us that is not the case. Here it is a clear-cut case of computational error. Anybody, either the AO or the assessee, would have computed the tax liability of the assessee at that particular time would have correctly claimed MAT credit available to the assessee and charged interest u/s 234B of the income tax act. Therefore, we do not find any infirmity in the order of the learned assessing officer in computing interest liability u/s 234B of the income tax act.
Issues Involved:
1. Reduction of MAT credit entitlement under Section 154 of the Income Tax Act. 2. Charging of interest under Section 234B due to reduction in MAT credit. Issue-wise Detailed Analysis: 1. Reduction of MAT Credit Entitlement under Section 154 of the Income Tax Act: The assessee filed an appeal against the order of the Commissioner of Income Tax (Appeals) upholding the action of the Assessing Officer (AO) in passing an order under Section 154 of the Income Tax Act, reducing the MAT credit entitlement by ? 5,68,28,807 due to certain transfer pricing adjustments for AY 2011-12 affirmed by the Dispute Resolution Panel (DRP). The assessee argued that the issue of reduction of MAT credit under Section 115JAA is debatable and cannot be rectified under Section 154. Additionally, the transfer pricing adjustments confirmed by the DRP for AY 2011-12 are sub-judice before the Tribunal and covered by orders of the Tribunal for earlier years. The AO observed that the MAT credit allowed for AY 2011-12 was not correct due to transfer pricing adjustments sustained by the DRP. Consequently, the AO passed an order under Section 154 read with Section 143(3), withdrawing the MAT credit of ? 56,828,807. The CIT(A) upheld the AO's action, stating that the AO corrected a prima facie mistake apparent from the record. The assessee's appeal was dismissed as the CIT(A) found the AO justified in rectifying the mistake. The Tribunal found no debatable issue in the reduction of MAT credit and upheld the AO's action under Section 154. The Tribunal noted that the provisions of Section 115JAA are clear and automatic, leaving no scope for debate. The Tribunal dismissed the assessee's ground, affirming that the AO correctly invoked Section 154 to rectify the MAT credit. 2. Charging of Interest under Section 234B due to Reduction in MAT Credit: The assessee contested the AO's action, confirmed by the CIT(A), in charging interest under Section 234B due to the reduction in MAT credit. The CIT(A) held that charging interest under Section 234B is mandatory and consequential. The assessee argued that the withdrawal of MAT credit resulted in a shortfall of advance tax, leading to the imposition of interest under Section 234B. The assessee cited judicial precedents to support the argument that interest under Section 234B should not be charged in such circumstances. The Tribunal examined the provisions of Section 234B and found that interest is payable for default in payment of advance tax. The Tribunal noted that the excess MAT credit was allowed initially, but the correct tax liability was determined later, resulting in the liability under Section 234B. The Tribunal rejected the assessee's reliance on judicial precedents, stating that those cases involved retrospective amendments or unforeseen income, which were not applicable in the present case. The Tribunal upheld the AO's action in charging interest under Section 234B, finding no infirmity in the order. Conclusion: The Tribunal dismissed the assessee's appeal, upholding the AO's actions in both reducing the MAT credit entitlement under Section 154 and charging interest under Section 234B. The Tribunal found the AO's actions justified and in accordance with the law, with no debatable issues involved.
|
