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TMI Blog2010 (11) TMI 700X X X X Extracts X X X X X X X X Extracts X X X X ..... as brought into force, it must be regarded as being clarificatory in nature - In the I T Form I in Schedule G the tax credit to be allowed u/s 115JAA was to be reckoned after computing the interest liability u/s 234B - Held that: various judicial pronouncements that for invoking the provisions of sec. 263, the twin conditions i.e. order must be erroneous and it must be prejudicial to the interest of revenue have to be satisfied - Since in the instant case the Assessing Officer has taken a view which is permissible and which is held to be correct in view of the ratio of the decision of the jurisdictional High Court; therefore, in our considered opinion, the DIT(IT) was not justified in the invoking provisions of sec. 263 of the I T Act - I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of interest on the tax credit allowed under sub.sec. (1) of sec. 115JAA and, therefore, it resulted in excess allowance of interest u/s 244A to the extent of Rs.1763.78 lacs. He, therefore, issued notice u/s 263 of the I T Act. In response to the notice, the assessee filed detailed written submission and relied on a couple of decisions and submitted that the MAT credit in this case has been correctly set off before the advance tax and TDS vide order u/s 154 dated 22.3.2006 and accordingly there is no prejudice to the interest of the revenue by allowing interest u/s 244A of the Act. 3.2 However, the ld DIT (IT) was not satisfied with the explanation given by the assessee. He reproduced Schedule-G, which is the statement of taxes forming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court in the case of CIT vs Max India Ltd reported in 295 ITR 282(SC), he submitted that every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interest of the revenue. When the Assessing Officer adopts one of two courses permissible in law and it has resulted in some loss of revenue, or where two views are possible and the Assessing Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interest of revenue unless the view taken by the Assessing Officer is unsustainable in law. He submitted that in the instant case, the Assessing Officer has taken a view which is permissible in law; therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Rajasthan High Court in the case of CIT vs Emery Stone Mfg Co reported in 213 ITR 843 he submitted that even in a case where the facts have been disclosed by the assessee before the assessing authority and if the correct provisions of law have not been examined by the assessing authority, the power u/s 263 of the I T Act, 1961 can be invoked. 4.2 Referring to the decision of the Hon'ble Supreme Court in the case of Malabar Industrial Co Ltd (supra), he submitted that where the Assessing Officer has not applied his mind properly and rectification order has been passed on a debatable issue, the CIT can assume jurisdiction u/s 263 of the I T Act. 4.3 The ld counsel for the assessee in his rejoinder submitted that we are concerned wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in the said decision has held as under: (short notes) "An amendment which is intended to remove an ambiguity in the interpretation of a section must of necessity be regarded as clarificatory. If it is clarificatory in nature, it is expressive of a position in law which Parliament intended to hold the field at all material times ad must consequently be regarded as operating with retrospective effect. Credit for minimum alternate tax u/s 115JAA of the I T Act 1961, comprises that portion of the minimum alternate tax which was not actually payable by the assessee but which nevertheless was collected by the Exchequer. Interest u/s 234B is leviable on the short fall of advance tax paid during the previous year. The provisions of sec. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and Parliament stepped in to substitute Explanation 1 so as to specifically provide for account being taken of the credit allowed to be set off u/s 115JA. Having regard to the background in which the amendment was brought into force, it must b regarded as being clarificatory in nature. The amendment clearly removes a cause of ambiguity in the interpretation of sec. 234B. The provisions of sec.234B more particularly sub section (2) as well as the entire scheme envisaged in secs 140A and 143(1) clearly require due account being taken of the minim alternate tax credit to which the assessee was entitled u/s 115JAA. Consequently, even prior to the amendment the credit to which the assessee was entitled u/s 115JAA could not be ignored in determ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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