Tribunal allows MAT credit claim, deems revision under section 263 invalid.

The Tribunal ruled in favor of the assessee, holding that the revision under section 263 was invalid. The Tribunal found that the assessee was entitled to claim the MAT credit of the amalgamating company, and the Assessing Officer's decision to allow the set-off of MAT credit was not erroneous. The Tribunal quashed the Commissioner's order, allowing the appeal and dismissing certain grounds.

---

---

Issues:
Challenge to order dated 27th March 2018 by the assessee regarding Minimum Alternate Tax (MAT) credit for the assessment year 2007-08.

Analysis:
The appeal filed by the assessee was against the order passed by the Commissioner of Income Tax (LTU), Mumbai, for the assessment year 2007-08. The Assessing Officer allowed MAT credit under section 115JAA of the Act for an amount of &8377; 6,99,46,873, which the assessee challenged before the first appellate authority. The Commissioner (Appeals) directed the Assessing Officer to allow MAT credit as per law, resulting in the Assessing Officer granting MAT credit of &8377; 20,12,95,237. However, the Commissioner, under section 263 of the Act, found the MAT credit of &8377; 6,99,46,873 pertaining to an amalgamated company inadmissible for deduction, leading to a notice to the assessee. The assessee argued that by virtue of amalgamation, it was entitled to the MAT credit of the amalgamating company. The Commissioner disagreed, directing the Assessing Officer not to grant the MAT credit. The assessee contended that the revision under section 263 was invalid as the issue was not in dispute before the Commissioner (Appeals) and that the MAT credit was allowable on merit.

The Tribunal considered the history of MAT credit claims and observed that the Assessing Officer had allowed MAT credit of &8377; 6,99,46,873 initially, and the Commissioner (Appeals) directed further verification. The subsequent order gave effect to the Commissioner (Appeals) order, allowing a higher MAT credit. The Tribunal noted that the limitation for revision should be counted from the date of the order giving effect to the Commissioner (Appeals) order. It also found that the order giving effect to was not merely an implementation of the Commissioner (Appeals) direction, as the issue was not discussed in the original assessment order. Therefore, the Tribunal held that the revision under section 263 was not barred by limitation or merger with the Commissioner (Appeals) order.

Regarding the merits of the issue, the Tribunal analyzed the provisions of section 115JAA of the Act and relevant case law. It concluded that the assessee was entitled to claim the carried forward MAT credit of the amalgamating company. Citing precedents, the Tribunal found that the Assessing Officer's decision to allow the set-off of MAT credit was not erroneous. As one of the conditions of section 263 was not satisfied, the Tribunal quashed the Commissioner's order, allowing the appeal and dismissing certain grounds.

In conclusion, the Tribunal ruled in favor of the assessee, holding that the revision under section 263 was invalid, as the assessee was entitled to claim the MAT credit of the amalgamating company and the Assessing Officer's decision was not erroneous.

---