MAT credit order quashed, remanded for reconsideration. Review within 8 weeks.

The Court quashed the order denying MAT credit for surcharge and education cess on brought forwarded MAT credit, remanding the matter to the Principal Commissioner of Income Tax for reconsideration in light of a previous appellate order. The Court emphasized a thorough review within eight weeks, disposing of the writ petition without costs and directing parties to obtain a certified copy of the order promptly.

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Issues:
1. MAT credit entitlement for surcharge and education cess on brought forwarded MAT credit.
2. Interpretation of the term "Tax" under MAT provisions.
3. Consideration of previous appellate order by the Principal Commissioner of Income Tax.
4. Application of relevant case law in determining MAT credit eligibility.

Analysis:
1. The petitioner, engaged in manufacturing and exporting synthetic blended yarn, filed its original income tax return for the Assessment year 2015-2016, seeking MAT credit under Section 115JAA. The ACIT allowed MAT credit but omitted to grant credit for surcharge and education cess on brought forwarded MAT Credit. The petitioner appealed against this refusal, and the CIT (Appeals) partly allowed the appeal by considering a previous judgment by the Division Bench of the High Court. Subsequently, a revised return was filed, and the ACIT once again denied credit for surcharge and education cess. The petitioner then filed a revisional application challenging this denial before the Principal Commissioner of Income Tax.

2. The Department argued that the term "Tax" under MAT provisions cannot be extended to include surcharge and education cess for calculating carry forward and set off of MAT credit. They contended that surcharge and education cess are not classified as income tax and, therefore, should not be considered for MAT credit eligibility. The Court heard both parties and opined that the Principal Commissioner failed to consider the previous appellate order while passing the order denying MAT credit against surcharge and cess. The Court noted that the Principal Commissioner did not adequately distinguish between the cases cited.

3. In light of the above, the Court quashed the order dated 28th February, 2019, and remanded the matter back to the Principal Commissioner of Income Tax to reconsider and pass a reasoned order after providing an opportunity of hearing to the petitioner. The Court emphasized the need for a thorough review, preferably within eight weeks from the date of the judgment. The writ petition was disposed of without any costs, and parties were directed to obtain an urgent certified copy of the order upon fulfilling necessary formalities.

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