TaxTMI 
TaxTMI 
2015 (6) TMI 611
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....s passed an order reducing the amount of refund to Rs. 2,71,798/-. This figure is subject to verification by the Officer concerned in the light of the decision that we are now rendering in the present tax case (Appeal). It is made clear that either parties will be entitled to clarify the exact amount of refund. 3. Hence, the question of law that arise for consideration in this Tax Case (Appeal) is modified as follows: "Whether the Tribunal was justified in allowing the appeal filed by the assessee, who claimed interest under Section 244A of the Income Tax Act consequent to the benefit of MAT credit under Section 115JAA of the Income Tax Act extended to the assessee?" 4. The brief facts of the case are as follows: The assessment in this case relates to the assessment year 1998-99. The assessee is a company engaged in the business of manufacture and export of cotton garments. The assessee filed its return of income on 27.11.1998 declaring gross total income of Rs. 6,50,15,073/-. The Assessing Officer determined the total taxable income under normal computation at Rs. 1,33,06,600/- and the book profit under Section 115JA of the Income Tax Act at Rs. 1,77,48,720/-. The Assessing Of....
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....28.3.2003 correcting the error in the earlier giving effect to order of the Commissioner of Income Tax (Appeals) in the following manner: "Giving effect to the order of CIT(A) cited, the assessment order dated 18.03.2002 is modified as under:- Grant total income as per order dated 18.03.2002 6,50,15,073 Less: Deduction u/s.80HHC [As held by CIT(A)] 5,53,19,475 Deduction u/s.80G [as claimed] 15,000 5,53,34,475 Revised Taxable income as per normal computation 96,80,598 (or) 96,80,600 [A] Taxable Income u/s. 115JA: Book profit as per order Dated 18.03.2002 6,94,42,189 Less: Deduction u/s.80HHC 5,53,19,475 Revised Book Profit 1,41,22,714 OR 1,41,22,710 30% thereof 42,36,814 [B] Taxable Income being higher of [A] or [B] i.e,. Rs.96,80,600/- Income tax thereon @ 35% 33,88,210 Less : MAT Credit u/s.115JAA 19,05,326 14,82,884 Less: TDS 13,09,401 Advance Tax 8,26,000 21,35,401 Refund Due 6,52,517" 6. Consequent to the above-said giving effect to order, the assessee filed a petition on 08.04.2003, requesting interest under Section 244A of the Income Tax Act on the refund determined at Rs. 6,52,517/- after adjusting TDS ....
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....to give credit to MAT payment of Rs. 27,93,693/- and afterwards work out the interest payment u/s. 234B&C. 7. Upon consideration of the aforesaid, we are of the opinion that the assessee's claim is perfectly justified. Hence, we set aside the orders of the authorities below and decide the issue in favour of the assessee." 8. Aggrieved by the order of the Tribunal, the Revenue is before this Court. 9. Heard learned Standing Counsel appearing for the Revenue and the learned counsel appearing for the assessee and perused the materials placed before this Court. 10. It is seen from the order of the Tribunal that the Departmental Representative has conceded before the Tribunal that there was an error on part of the Assessing Officer in giving effect to the order of the Commissioner of Income Tax (Appeals). At the threshold, we fail to see whether an appeal could be filed, when the Revenue has fairly conceded before the Tribunal. However the issue having been raised by the Revenue, we are inclined to take up the issue for consideration. 11. Before going into the merits of the case, for better appreciation, we extract hereunder the relevant provisions, namely, Section 115JA (1) an....
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....p;If that is so, the MAT credit that is available should be allowed to set off and thereafter the tax liability has to be determined taking note of the Advance Tax paid and the TDS available. 13. It is relevant to note that the case in converse came up for consideration before the Supreme Court in the decision reported in [2011] 330 ITR 226 (SC) COMMISSIONER OF INCOME-TAX v. TULSYAN NEC LTD, wherein the issue before the Supreme Court was regarding the priority to be given on the adjustment of MAT credit. The Supreme Court observed that when tax is paid by the assessee under Section 115JA, the assessee becomes entitled to claim credit of such tax in the manner prescribed. Such a right gets crystallized no sooner the tax is paid by the assessee. It further held that although the right to avail of tax credit gets crystallized in year one, on payment of tax under section 115JA and the set off thereof follows statutorily, the amount of credit available and the amount of set off to be actually allowed as in all cases of deductions/allowances under sections 30-37, is fluid/inchoate and subject to final determination only on adjudication of assessment either under section 143(1) or under ....
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...., an assessee has a right to take into account the set off even while estimating its liability to pay advance tax on the "current income" in accordance with the provisions of Chapter XVII-C. Although section 209(1)(d) does not make any specific provision either before or after the amendments carried out bythe Finance Act, 2006 to the effect that an assessee is entitled to set off the tax credit that would be available in terms of section 115JAA(1) while computing the quantum of advance tax that is to be paid it must follow that an assessee would be entitled to do so otherwise it results in absurdity, viz, that an assessee pays advance tax on the footing that it is not entitled (when in fact it is so entitled as discussed above) to the credit and thereafter claims a refund of such advance tax paid as a consequence of the set off. Moreover, when an Assessing Officer makes an intimation under section 143(1) he accepts the return filed by the assessee to which the Assessing Officer may make an adjustment and consequently makes a demand or refund. Section 143(1) provides that where a return is made under section 139 and if any tax or interest is found due on the basis of such return aft....