Judgment · High Court

IN THE HIGH COURT OF JUDICATURE AT MADRASDated : 27.04.2009Coram :THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIANandTHE HONOURABLE MR.JUSTICE M.M.SUNDRESHTax Case (Appeal)Nos.1143 to 1145 of 2008Commissioner of Income TaxChennai ..Appellant in allT.Cs.v.M/s.Tulsyan NEC Limited147, Greams RoadChennai – 600 006... Respondent in allT.Cs.Tax Case Appeals in T.C.(A) Nos.1143 to 1145 of 2008 arefiled under section 260A of the Income Tax Act, 1961 against theorder of the Income Tax Appellate Tribunal, Madras 'C' Bench, Chennai, dated 9.4.2007 passed in ITA Nos.1844, 1845 and1846/Mds/2005 relating to the assessment years 1998-99, 1999-2000and 2000-2001 respectively. Against the order of Commissioner ofIncome Tax Appeals(XI)Madras-34,dated.26.5.2005 in ITA.TR.Nos.75 &74-04-05,341/03-04 and ITA.Nos.215 and 218/04-05; 217/2004-05 and arisingout of the rectification order of Assistant Commissioner of IncomeTax, Company Circle III(2) Madras-34; dt.8.3.2004; & 3.12.2003 inNo.CO.Cir.III(2)/32134-T/2000-01; CO.Cir.III(2) 32134-T-99-00 andCo.Cir.III(2)/32134-T/98-99 and against the revision order ofAsst. Commissioner of Income Tax, Company Circle III(2) Madras-34;dt.19.6.2002 in No.CO.Cir.III(2).32134/98-99; and arising out ofthe Assessment order of Joint Commissioner of Income Tax SpecialRange VI, Madras-34,dt.30.3.2001 in P.A.No.23-T.For appellant :Mrs. Pushya SitaramanJUDGMENT(Judgment of the Court was delivered byK.RAVIRAJA PANDIAN,J.)The appeals in T.C.(A) Nos.143 ato 1145 of 2008 have beenpreferred by the revenue against the order of the Income TaxAppellate Tribunal, Madras 'C' Bench, Chennai, dated 9.4.2007passed in ITA Nos.1844, 1845 and 1846/Mds/2005 relating to the https://hcservices.ecourts.gov.in/hcservices/ assessment years 1998-99, 1999-2000 and 2000-2001 respectively .2. The issue involved in all the appeals is one and thesame. The material facts as culled out from the statement of factsin the memorandum of grounds of appeal are stated below:- The assessee filed its return of income for the assessmentyears 1998-99 to 2000-2001. Subsequently the assessing officerconsidered the interest under Section 234B and 234C prior to MATcredit and thus completed the assessment. Aggrieved by the order ofthe assessing officer, the assessee filed appeal before theCommissioner of Income Tax (Appeals), who allowed the appeal infavour of the assessee for the above stated assessment years byrelying upon his own order in the assessee's own case inI.T.A.No.217/2004-2005 dated 26.5.2005 whereby it was held thatinterest under Section 234B and 234C is to be charged only afteradjustment of tax creditable. The assessee filed Second Appealbefore the Income Tax Appellate Tribunal, which allowed the appealin favour of the assessee following its own order in the case ofChemplast Sanmar Limited reported in (2004) 83 TTJ (Chennai) 427and the decision of the Chandigarh Bench in the case of PhilipsIndia Limited reported in (2004) 93 TTJ (Chd) 767. Aggrieved by thesame, the revenue has filed this appeal by formulating thefollowing questions of law:"1. Whether in the facts and circumstancesof the case, the Tribunal was right in holdingthat the MAT credit is to be set off from the taxpayable before levying interest under Section2234B and 234C of the Income tax Act 1961?2. Whether on the facts and circumstancesof the case the MAT credit can be given priorityof set off against tax payable, contrary to theScheme of Schedule G of Form 1?3. We heard the arguments of the learned counsel for theappellant and perused the materials available on record.4. The very same issues have been considered by theDivision Bench of this Court in T.C.A.Nos.887 of 2004 etc. batch on09.04.2009 and the Division Bench has answered in favour of theassessee and against the revenue by observing as follows:"7.In respect of the first question of law, thearguments advanced by the counsel on either sideare the same as the one advanced before theDelhi High Court cited supra. The Delhi HighCourt has considered the relevant provisions anddealt with the matter in detail and held thatthe credit under Section 115JAA should be giveneffect to before charging of interest underSection 234A, 234B and 234C of the Act. We are https://hcservices.ecourts.gov.in/hcservices/ in agreement with the reasoning given by the DelhiHigh Court. The learned counsel appearing forthe revenue has not produced any materials orgiven compelling reasons to take a contrary viewwith that of the Delhi High Court. In suchcircumstances, we answer the first question infavour of the assessee and against the revenue.......18. In the present case, the intention ofthe legislature is to give tax credit to tax andnot to the tax and interest. Once the intention isclear, the revenue cannot rely on the Form-I to saythat the MAT credit under Section 115JAA should begiven only after tax and interest. Further we haveanswered the first question of law in favour of theassessee i.e. the MAT credit under Section 115JAAshould be given effect to before charging theinterest under Section 234B and 234C. Rule 12(1)(a)and Form-I cannot go beyond the provisions of theAct. Form-I cannot lay down the order of priorityof adjustment of TDS, advance Tax, MAT credit underSection 115JAA which is contrary to the provisionsof the Act. The order passed by the Tribunal is inaccordance with law and we do not find any error orillegality in the order of the Tribunal so as towarrant interference. Accordingly, we answer thequestions 2 and 3 also in favour of the assessee andas against the Revenue." 5. The questions of law in these appeals are identical tothe one considered by the Division Bench. Following the DivisionBench Judgment stated supra, the appeals are dismissed since thequestions of law have already been answered in favour of theassessee. Sd/- Asst. Registrar / True Copy / Sub. Asst Registrar usk To1. The Commissioner of Income Tax, Chennai 2. The Income Tax Appellate Tribunal, Chennai 'C' Bench, Chennai.3. Asst. Commissioner of Income Tax, Company Circle III(2), Chennai. https://hcservices.ecourts.gov.in/hcservices/

#4. Additional/Joint Director of Income Tax, Range-III, Chennai -34.5. Commissioner of Income Tax Appeals(XI), 121,Mahatma Gandhi Salai, Chennai-34.6. The Asst. Registrar, Income Tax Appellate Tribunal, Rajaji Bhavan, Besant Nagar, Chennai-90+ 1 cc to M/s.Pushya Sitaraman, Advocate, SR.18175 SJ(CO)EM/4.6.09 T.C.(A)Nos.1143 to 1145 of 2008