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TMI Blog2012 (12) TMI 1192X X X X Extracts X X X X X X X X Extracts X X X X ..... the Dy. CIT assessed the total taxable income at ₹ 95 lacs (rounded off). 1.2 Aggrieved by the same, this was challenged before the CIT(A). He allowed partially the appeal of the assessee on 27th Feb., 2009. The issue of MAT was then challenged before the appellate forum. It upheld the version of the AO holding that the amendment brought into the Act was prospective in nature and not retrospective, and therefore, the AO was right in not allowing the assessee to treat the MAT credit for advance tax. 1.3 This was challenged before the Tribunal and the Tribunal vide its impugned order, partially allowed the appeal of the assessee directing the AO to reconsider the credit of MAT before calculating the interest for default in payment of advance taxes, holding the amendment as retrospective in nature and applying the same to the year under consideration. Resultantly, this appeal raising the aforementioned questions. 2. The Tribunal, while considering this issue, has relied upon the decision of the Madras High Court in case of CIT vs. Roots Multiclean Ltd. (2010) 327 ITR 65 (Mad) as also decision of the Bombay High Court in case of CIT vs. Apar Industries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... warrant interference. Accordingly, we answer the questions 2 and 3 also in favour of the assessee and as against the Revenue. 4. Bombay High Court in case of CIT vs. Apar Industries Ltd. (supra) has also answered this question on the same line. It would be profitable to be reproduced some of the relevant observations and findings: 30. Having regard to the background in which the amendment was brought into force, it must be regarded as being clarificatory in nature. The amendment clearly removes a cause of ambiguity in the interpretation of s. 234B. As interpreted by us in the earlier part of this judgment, the provisions of s. 234B, more particularly sub-s. (2) as well as the entire scheme envisaged in ss. 140A and 143(1) clearly require due account being taken of the MAT credit to which assessee was entitled under s. 115JAA. Consequently, even prior to the amendment the credit to which the assessee was entitled under s. 115JAA could not be ignored in determining the liability to pay interest under s. 234B. There was a certain element of ambiguity in the Explanation to ss. 140A and 234B. Parliament considered it appropriate to step in and resolve an area of ambig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tax deducted to the extent it can be set off represents tax already paid and available as credit at the beginning of the year; (vii) The assessee cannot, therefore, be charged interest on something which he has already paid; (viii) The provisions of s. 234A are compensatory. Since the tax due to the extent of available MAT credit stands paid, the levy of interest under s. 234A thereon would not arise. 41. We are in respectful agreement with the view expressed by the Delhi High Court in Jindal Exports Ltd. (supra). 5. It would be profitable to reproduce s. 234B of the Act: B. (1) Subject to the other provisions of this section, where in any financial year, an assessee who is liable to pay advance tax under s. 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of s. 210 is less than ninety per cent of the assessed tax, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period from the 1st day of April next following such financial year to the date of determination of total income under sub-s. (1) of s. 143 and where a regular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s payable under sub-s. (1) is increased, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period commencing on the day following the date of determination of total income under sub-s. (1) of s. 143 and where a regular assessment is made as is referred to in sub-s. (1) following the date of such regular assessment and ending on the date of the reassessment or recomputation under s. 147 or s. 153A, on the amount by which the tax on the total income determined on the basis of the reassessment or recomputation exceeds the tax on the total income determined under sub-s. (1) of s. 143 or on the basis of the regular assessment aforesaid. 6. Sec. 115JAA is reproduced as under: JAA. Tax credit in respect of tax paid on deemed income relating to certain companies.-(1) Where any amount of tax is paid under sub-s. (1) of s. 115JA by an assessee, being a company for any assessment year, then, credit in respect of tax so paid shall be allowed to him in accordance with the provisions of this section. (1A) Where any amount of tax is paid under sub-s. (1) of s. 115JB by an assessee, being a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the apex Court in case of CIT vs. Tulsyan NEC Ltd. (2011) 237 CTR (SC) 105 : (2011) 49 DTR (SC) 129 : (2011) 330 ITR 226 (SC) wherein the decision of the Madras High Court has been upheld by the apex Court answering the question as follows: To answer, we need to look at s. 234B. Under that section, 'assessed tax' means the tax on the total income determined under s. 143(1) or on regular assessment under s. 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 s. 115JAA but the same was not available for set off while calculating advance tax. This dichotomy was more spelt out because s. 115JAA did not provide for payment of interest on the MAT credit. To avoid this situation, Parliament amended Expln. 1 to s. 23 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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