TaxTMI 
TaxTMI 
2015 (9) TMI 1176
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....wing ground of appeal:- "That under the circumstances of the case, the CIT(A) has erred in directing the A.O. to give credit for MAT paid in earlier assessment years at par with other prepaid taxes". 2. The appeal is time-barred by eight days. The Department has filed condonation petition dated 19.12.2005 in which the delay in filing appeal has been explained as under:- "The date of limitation in the case expired on 12.12.2005. The appeal could not be filed by the above due date and there is delay of 8 (eight) days in filing the appeal. Date-wise delay is explained hereunder:- Date Grounds 12.12.2005 File was considered by the CIT 13.12.2005 Filing of appeal authorised by CIT 14.12.2005 Papers could not be m....
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....00 to be carried forward and set off on account of subsequent year becomes nil. Accordingly he passed the order under section 154 withdrawing the MAT Credit. 5. Ld. CIT(Appeal) following the decision of Hon'ble ITAT, Chennai Bench in the case of Chemplast Sunmar Ltd. -vs.- DCIT reported in 84 TTJ 427 and the decision of the Hon'ble ITAT, Chandigarh Bench in the case of Philips India Ltd. -vs.- ACIT reported in 92 ITR 441 directed the Assessing Officer to allow admissible available MAT credit as per the Income Tax Act and Rules after verification of available MAT credit under section 115JAA for the assessment year 1999-2000 to be carried forward and set off in the subsequent years. 6. Ld. Sr. Counsel filed before us a copy ....
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....ment framed by the Assessing Officer. Thus, the right to set off arises as a result of the payment of tax under section 115JA(1) although quantification of that right depends upon the ultimate determination of total income for the first assessment year. Further, 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 by the 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 advan....
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....it. In this connection, it is important to bear in mind that the credit allowed is the excess of the normal tax liability over MAT liability in the subsequent years. In this connection the following illustration on MAT credit be seen: Particulars Amount (Rs.) Year 1 115JB liability 1,600 Normal tax liability 400 Credit which can be carried forward-1 1,200 Year 2 115JB liability (A) 600 Normal tax liability(B) 1,400 Tax liability = (B) (since B is higher than A) 1,400 MAT Credit available for set off in Year 2(A)-(B) -II 800 Net tax liability for Year 2 (B-II) 600 MAT credit to be carried forward(I-II) &....
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....ayable 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 balance, he would nevertheless be required to pay advance tax, and if he fails, interest under section 234B would be chargeable. The consequence of adopting t....
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.... to the file of Assessing Officer. 8. After hearing the rival submissions and perusing the material available on record, we find that the Hon'ble Supreme Court in the case of Sage Metals Limited reported in (2012) 26 taxmann.com 258(SC) has held as under:- "Entitlement of MAT credit is not dependent upon any action taken by the Department. However, quantum of tax credit will depend upon the assessment framed by the Assessing officer. Thus, the right to set off arises as a result of the payment of tax under section 115JA(1) although quantification of that right depends upon the ultimate determination of total income for the first assessment year". Therefore, as rightly pointed out by the ld. Sr. Counsel for the assessee, first the t....