TaxTMI 
TaxTMI 
2008 (11) TMI 305
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....and advance tax there was a net refund and no interest has been paid on such refund. He then referred to the decision of the CIT(A) wherein the issue raised before him regarding payment of interest under s. 244/244A was rejected on the basis of Circular No. 763, dt. 18th Feb., 1998 [(1998) 145 CTR (St) 38]. Then he referred to the circular and pointed out that what the circular clarifies is that credit allowed against MAT will not bear any interest. This means that if the MAT payment is made for example, say for the asst. yr. 1997-98 and credit for the same is being given for the asst. yr. 2002-03, then no interest is payable for earlier three assessment years. The whole idea of MAT credit against the same was that the self-tax paying companies must pay some tax and later on in view of the amendment to s. 115JAA, the set off was also allowed against such MAT credit. Then he referred to the decision in the case of Asstt. CIT vs. Candy Industries (P) Ltd. in ITA No. 5006/Mum/2002, dt. 30th Sept., 2005 which has been published in Chartered Accountants Journal (copy filed on record). It has been held therein that interest was allowable when there was refund despite MAT credit. He also ....
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.... provisions of this section. (2) The tax credit to be allowed under sub-s. (1) shall be the difference of the tax paid for any assessment year under sub-s. (1) of s. 115JA or under sub-s. (1) of s. 115JB, as the case may be, and the amount of tax payable by the assessee on his total income computed in accordance with the other provisions of this Act: Provided that no interest shall be payable on the tax credit allowed under sub-s. (1)." Further, a circular has been issued by the CBDT wherein this provision has been explained. The relevant cl. (4) of para 45.4 reads as under: "(4) The credit allowed will not bear any interest." We agree with the submission of the learned counsel for the assessee that the only interpretation which could be given to the circular which has explained the proviso to s. 115JAA is that interest cannot be allowed for the intervening period. That is, if MAT is paid, for example, in the asst. yr. 2001-02 and the same is credited in the asst. yr. 2003-04 then for the intervening years of 2001-02 and 2002-03 no interest is payable on such MAT credit. However, for the year in which ultimately MAT credit is given and credit for other tax payments i....
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....er adjustment of TDS. According to the assessee, MAT credit shall be first allowed against the tax payable and the TDS is to be adjusted thereafter and its working of the refund reproduced earlier is in conformity with this stand. The matter has been decided already by several orders of the various Benches of the Tribunal. In Chemplast Sanmar Ltd. vs. Dy. CIT (2004) 83 TTJ (Chennai) 427 : (2005) 3 SOT 620 (Chennai), the Chennai Bench held that MAT credit has to be given first against the tax payable before charging interest under ss. 234B and 234C. Though this was the main dispute in that case, the Tribunal has taken note of the issue in a broad base manner and has opined that the method of prescribing the order of priority of adjustment between TDS, advance tax and MAT credit as given in the Sch. G of Form No. 1, which is the return form prescribed by the Board for companies, is contrary to the intention of the legislature and is even in excess of the delegated authority. It may be mentioned that in the return of income, the priority of adjustment given is that interest under ss. 234B and 234C shall be first deducted and only thereafter the tax credit under s. 115JAA shall be give....
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....nbsp; Rs. 92,16,00,330 Less: MAT credit Rs. 6,36,82,480 ------------------ Rs. 85,79,17,850 Less: TDS Rs. 8.94,21,838 &nb....