TaxTMI 
TaxTMI 
2018 (3) TMI 465
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....hat assessed tax for the purpose of Section 234B and 234C of the lncome Tax Act 1961 was computed without considering available MAT Credit of Rs. 12,91,616/-upto the Assessment Year 2006-2007. Computation of lnterest under Section 234B and 234C was not made in accordance with Explanation 1(v) to Sub-Section (1) of Section 234B and 234C of lncome Tax Act 1961; and also violative of Hon'ble Supreme Court decision in CIT Vs. TULSYAN NECL LTD. (2011) 196 TAXMAN 181. The order of Learned Commissioner of lncome Tax (Appeals)-16 is bad in law. 3. ln the computation of Assessed Tax, TDS of Rs. 4,35,927/- was deducted instead of Rs. 4,36,617/- and this plea was brought to the notice of Ld. Commissioner of lncome Tax (Appeals)-16 at the time of hearing. 4. Under the above facts of the case, the order passed by Ld. Commissioner of lncome Tax (Appeals)-16 is liable to be set aside. 5. For these and other grounds, which may be urged at the time of the hearing, the appeal may be allowed and justice rendered." 3. The main grievance of the assessee in this appeal is that MAT credit of Rs. 12,91,616/- should be allowed from the 'assessed tax, and thereafter the int....
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.... are liable for payment of advance tax having regard to the provisions contained in new section 115JB. Consequently, the provisions of sections 234B and 234C for interest on defaults in payments of advance tax and deferment of advance tax would also be applicable where facts of the case warrant". Considering the above circular of CBDT, the AO held that the assessee company was liable to pay advance tax and for failure to do so, interest u/s 234B& 234C had been rightly charged. The AO rejected the rectification application of the assessee and computed the tax payable as under: Total income as per order u/s 143(1) 17.03.2009 NIL Tax @ 10% of book profit Rs. 61,22,210/- Surcharge @ 10% Rs. 6,12,221/- Education Cess @ 2% Rs. 1,34,689/- Total Tax Payable Rs. 68,69,120 Less: T.D.S Rs. 4,35,927/- Rs. 64,33,193/- Add: Interest u/s 234B Rs. 5,84,199/- Add: Interest u/s 234C Rs. 3,24,876 Rs. 9,09,075/- Rs. 73,42,268/- Less: Self Assessment Tax payable Rs. 64,20,902/- Rs. 9,21,366/- L....
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.... did not provide for payment of interest on the MAT credit. To avoid this situation, Parliament amended Explanation 1 to Section 234B by Finance 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 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 the case ....
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....terest under Section 234B and 234C was introduced by the Assessing Officer in his order under Section 154 of the Act.The Assessing Officer completely ignored the settled legal issue that before charging interest under Section 234B and 234C, MAT credit was to be first allowed to the assessee. The Learned Commissioner of lncome Tax (Appeals), had also ignored the fact that assessed tax for the purpose of Section 234B and 234C of the lncome Tax Act 1961 was computed without considering available MAT Credit of Rs. 12,91,616/-. That is, upto the Assessment Year 2006-2007 the available MAT Credit was at Rs. 12,91,616/- and the assessing officer did not consider it before charging of interest under section 234B and 234C of the Act.We note that, the Computation of lnterest under Section 234B and 234C was not made in accordance with Explanation 1(v) to Sub-Section (1) of Section 234B and 234C of lncome Tax Act 1961; which is given below: SECTION 234B: Interest for defaults in payment of advance tax. (1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or,....