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of <h1>High Court affirms inclusion of surcharge and cess in MAT credit calculations under Income Tax Act</h1> <h3>Principal Commissioner of Income Tax-6, Chennai Versus M/s. Scope International Pvt. Ltd.</h3> Principal Commissioner of Income Tax-6, Chennai Versus M/s. Scope International Pvt. Ltd. - [2020] 429 ITR 500 (Mad) Issues:1. Inclusion of surcharge and cess in MAT credit under Section 115JAA of the Income Tax Act.2. Reliance on the decision of the Hon'ble Supreme Court in the case of CIT Vs. K.Srinivasan for a subsequent insertion of Section 115JAA with retrospective effect.Analysis:1. The appeal was filed by the Revenue against the order of the Income Tax Appellate Tribunal regarding the inclusion of surcharge and cess in MAT credit under Section 115JAA. The Revenue contended that the Tribunal erred in following the decision in the case of K.Srinivasan, arguing that it was not applicable to the present case due to the subsequent insertion of Section 115JAA. The issue revolved around whether surcharge and cess should be considered in MAT credit calculations. The Tribunal upheld the order of the CIT(A), emphasizing the power to direct verification by the Assessing Officer. The High Court, after considering legislative history and the Finance Act, supported the Tribunal's decision, stating that the term 'tax' includes surcharge and cess, as per the circular of the Central Board of Direct Taxes.2. The second substantial question of law involved the reliance on the decision in the case of CIT Vs. K.Srinivasan, which was rendered in the context of Section 2 of the Act, for a subsequent insertion of Section 115JAA with retrospective effect. The High Court analyzed the legislative history and the interpretation of the term 'surcharge' as explained by the Hon'ble Supreme Court in the case of K.Srinivasan. The Court concluded that the decision in K.Srinivasan applied to the present case, supported by the circular of the Central Board of Direct Taxes, which clarified that tax includes applicable surcharge and cess. The Court dismissed the Revenue's appeal, affirming the Tribunal's decision to include surcharge and cess in MAT credit calculations.In summary, the High Court upheld the Tribunal's decision, ruling in favor of including surcharge and cess in MAT credit calculations under Section 115JAA of the Income Tax Act. The Court relied on the legislative history, the interpretation of relevant provisions, and the circular of the Central Board of Direct Taxes to support its judgment, dismissing the Revenue's appeal.
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