AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2011 (5) TMI 565
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....n this way, the total amount paid worked out to Rs. 55,94,86,273/-. While processing the return under Section 143(1)(a), the AO had also charged interest under Section 234C at Rs. 55,52,656/-. Thus, the total tax and interest payable on the income returned worked out to Rs. 54,44,59,250/- as per the normal provisions of the Act. 3. Later on, the case was selected under scrutiny and during the course of assessment, various additions, disallowances and additional claims were made and ultimately after the Income Tax Appellate Tribunals (hereinafter referred to as „the Tribunal‟) order, the total income under the normal provisions was worked out by the AO in terms of order dated 20.11.2007 under Section 254 of the Act at Rs. 147,14,95,301/-. However, subsequently while determining the income for the Assessment Year 1997-98 giving the appeal effect for those very years (Assessment Years 1991-92, 1994-95), the income finally assessable worked out less than the income assessable under the MAT provisions under Section 115JA of the Income Tax Act ('the Tax' for brevity). Accordingly, the MAT credit in terms of Section 115JA of the Act of the Assessment Year 1997-98 was a....
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....ereupon. The assessee had relied upon the judgment of the jurisdictional High Court, i.e., this Court in the case of Commissioner of Income Tax Vs. Jindal Exports [314 ITR 137]. The plea of the assessee was accepted by the CIT (A) holding that the amount which became refundable to the assessee was on account of advance tax paid in excess by the assessee and therefore, Section 244A of the Act was attracted and the assessee was entitled to interest under the said provision on the amount of refund of Rs. 9,61,45,549/-. As a consequence, while hearing the appeal of the assessee, the CIT (A) directed the AO to recalculate the interest chargeable under Section 234C of the Act as well as after adjustment of set off of MAT credit available to the appellant. 8. The Revenue, dissatisfied with the aforesaid outcome, approached the Tribunal challenging the said order of the CIT (A). However, the rationale given by the CIT(A) in taking the aforesaid view has been accepted in entirety by the Tribunal vide impugned order dated 19.02.2010 resulting into the dismissal of the appeal of the Revenue. It is under these circumstances, the present appeal is preferred under Section 260A of the Act....
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....y clarifies and makes explicit what was already implicit. Even if the amendment had not been introduced, the expression "such tax" as appearing in Section 140A would have reference to the tax payable on the basis of the returns minus the minimum alternate tax credit claimed to be set off in accordance with the provisions of Section 115JAA of the Act. This Court categorically decided that the tax due to the extent of available minimum alternate tax credit stood paid. The Revenue had the amount representing the minimum alternate tax credit at the very beginning of the year. The Revenue was not put to any loss. There was no case made out for compensation. Unless it could be shown that the interest sought to be charged was by way of compensation of loss suffered by the Revenue, such "interest" could not be regarded as interest under Sections 234B and 234C. The interest under Sections 234B and 234C was to be charged after the tax credit (minimum alternate tax) available under Section 115JAA was set off against tax payable on the total income of the year in question. 12. Since it is categorically held that the MAT credit is available for adjustment and set off on the first date o....
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....urt relied upon the earlier Division Benchs judgment of this Court in the case of Dr. Prannoy Roy Vs. Commissioner of Income Tax[2002] 254 ITR 755 to which one of us (A.K. Sikri, J.) was a Member of the Bench. In that case, the provisions of Section 234A were in issue. The question before the Court was whether interest could be charged under Section 234A when, though the return had not been filed in time, the tax had been paid. The argument raised on behalf of the Revenue that such payment of tax did not strictly comply with the meaning of advance tax and would, therefore, have to be disregarded for the purposes of charging interest under Section 234A, was rejected. The Court also held that interest under Section 234A was compensatory in nature and unless any loss was caused to the Revenue, the same could not be charged from the assessee. In the process, the Court dealt with the expression "advance tax". Explaining the interpretation given to the aforesaid expression, the Division Bench made the following observations in Jindal Exports (supra): "54. We feel that it would be fruitful to remember what was said by Sinha C.J. (as his Lordship then was), while speaking for a Div....
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....nce with Parts II and III of Schedule VI to the Companies Act, 1956, subject to the adjustments specified in the Explanation to Section 115JA. The higher of the two computations is deemed to be the "total income" chargeable to tax and tax is payable accordingly. Thus, Section 115JA enacts a deeming fiction by deeming 30% of book profits to be the "total income" chargeable to tax. The amount of tax paid under Section 115JA is held to be a "tax" payable under the Act, as defined in Section 2(43). (See National Thermal Power Corporation Ltd. v. Union of India 192 ITR 187 (Delhi). 15. Again in no uncertain terms, the Apex Court laid down that when tax is paid by the assessee under Section 115JA, he becomes entitled to claim the credit of such tax in the matter prescribed and: ".........Such a right gets crystallized no sooner the tax is paid by the assessee under Section 115JA, as per the return of income filed by the assessee for a previous year (say, year one).... (emphasis supplied)" 16. The scheme of Section 115JA and 115JAA (relating to tax credit) has been explained by the Court in the following manner: "We have discussed hereinabove the scheme of Section....
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.... five years under Section 115JAA but the same was not available for set off while calculating advance tax. This dichotomy was more spelt outbecause Section 115JAA did not provide for payment of interest on the MAT credit. To avoid this situation, Parliament amended Explanation 1 to Section 234B byFinance Act, 2006 w.e.f. 1.4.2007 to provide along with tax deducted or collected at source, MAT credit under Section 115JAA also to be excluded while calculating assessed tax. From the above, it is evident that any tax paid in advance/pre-assessed tax paid can be taken into account in computing the tax payable subject to one caveat, viz, that where the Assessee on the basis of self computation unilaterally claims set off or MAT credit, the Assessee does so at its risk as in case it is ultimately found that the amount of tax credit availed was not lawfully available, the Assessee would be exposed to levy of interest under Section 234B on the shortfall in the payment of advance tax. We reiterate that we cannot accept the case of the Department because it would mean that even if the Assessee does not have to pay advance tax in the current year, because of his brought forward MAT credit....