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TMI Blog2011 (2) TMI 1237X X X X Extracts X X X X X X X X Extracts X X X X ..... be adjusted for five years and it does not carry any interest, decision in favour of the assessee and against the revenue - ITA No. 231 of 2009 - - - Dated:- 14-2-2011 - N. Kumar, Ravi Malimath, JJ. Sri K.V. Aravind and M.V. Sechachala, Advs., for the Appellant JUDGEMENT Smt. Vani is permitted to file power for the respondent. 2. The revenue has preferred this appeal challenging the order passed by the Tribunal holding that TDS and prepaid taxes should be set off against the total taxes payable and then only a MAT credit should be allowance. 3. The assessee is engaged in the business of manufacture and export of fine chemicals and herbal medicines. For the assessment year 2001-02, return of income was filed on 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... off against the total taxes payable and then only MAT credit should be allowable was liable to be set aside? 2) Whether the Tribunal was correct in holding that on the MAT credit over which refund had been allowed, interest u/s. 244A has to be paid by ignoring the proviso to Section 115JAA(2) of the Act? 5. The learned Counsel for the revenue assailing the impugned order contended that it is only after giving deduction towards TDS and advance tax, the question of consideration of MAT credit would arise. Therefore, the Tribunal was in error in interfering with the order passed by the Commissioner of Income Tax. 6. Per contra, the learned Counsel for the assessee supported the impugned order by placing reliance on the judgment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al income determined under Section 143(1) or on regular assessment under Section 143(3) as reduced by the amount of tax deducted or collected at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income. The definition, thus, at the relevant time excluded the MAT credit for arriving at assessed tax. This led to immense hardship. The position which emerged was that due to omission on one hand the MAT credit was available for set off for five years under Section 115JAA but the same was not available for set off while calculating advance tax. This dichotomy was more spelt cut because Section 115JAA did not provide for pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sections 234B and 234C on the shortfall in the payment of advance tax despite existence of the MAT credit standing to the account of the assessee. Thus, despite the MAT credit standing to the account of the assessee, the liability of the assessee gets increased instead of it getting reduced. 12. Lastly, it is immaterial that the relevant form prescribed under the Income Tax Rules, at the relevant time (i.e. before April 1, 2007), provided for set off of MAT credit balance against the amount of tax plus interest i.e. after the computation of interest under Section 234B. This was directly contrary to a plain reading of Section 115JAA(4). Further, a form prescribed under the rules can never have any effect on the interpretation or operati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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