2020 (4) TMI 477

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....ly to the extent of Rs. 1,11,14,361/-. 3. Aggrieved by the above order, assessee preferred appeal before Ld. CIT(A) and made before him the following submissions:- "The Appellant filed its Return of Income for Assessment Year 2011-2012, determining its tax liability as per the provisions of Section 115JB amounting to Rs. 59,87,222/- against NIL normal income. For Assessment Year 2012-2013 the Appellant paid tax under MAT of Rs. 3,08,91,337/- against NIL normal income, thereby having total MAT credit entitlement to the tune of Rs. 3,68,78,559/-. The Appellant submits that scrutiny assessments had taken place for both Assessment Year i.e. Assessment Years 2011-12 and 2012-13, wherein the income of the Appellant was assessed under section 143(3) under MAT, and accordingly tax was computed as per the provision of Section 115JB. Under the provisions of Chapter XII-B, the Appellant was entitled to carry forward MAT credit under section 115JAA. For the current Assessment Year, the Appellant computed its tax liability as per regular provisions of Income tax to the tune of Rs. 4,49,51,633/-, Further, the tax liability computed by the Appellant as per the provisions of S....

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....ed. 5. Aggrieved by the order of the Ld. CIT(A), assessee is in appeal before us. 6. Before us, Ld. AR of the assessee submitted that whether the MAT credit available to the assesse in this assessment year inclusive of surcharge. He brought to our notice calculation of MAT credit availed by the assessee which is at page no. 3 of the paper book. Further he brought to our notice intimation u/s 143(1) of the Act, which is placed at page no. 11 of the paper book and he brought to our notice the calculation adopted by the department which exclude the surcharge while giving MAT credit. He further submitted that in ITR-6 submitted by the assessee as per the MAT calculation in part-B are automatic and no manual entry is allowed for assessee to make any adjustment. He brought to our notice page no. 34-35 of the paper book, in which the MAT computation was computed in ITR-6 and MAT credit which is auto calculation. It clearly indicates that the method adopted in ITR-6 by the department are different than the calculation adopted by the CPC. In this regard, he relied upon the following case laws:- 1. Decision of Allahabad High Court CIT v/s Vacment India (369 ITR 304) 2....

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....re any amount of tax is paid under section 115JB(l) by a company for any assessment year, credit in respect of the taxes so paid for such assessment year shall be allowed on the difference of the tax paid under section 115JB and the amount of tax payable by the company on its total income computed in accordance with the other provisions of the Act. In other words, MAT credit shall be computed as under: MAT credit available = Tax paid u/s 115JB - Tax payable on the total income under normal provisions of the Act. 9.1 The amount of tax credit so determined shall be allowed to be carried forward and set off in a year when the tax becomes payable on the total income computed under the regular provisions. However, no carry forward shall be allowed beyond the tenth assessment year immediately succeeding the assessment year in which the tax credit becomes allowable. The set off in respect of the brought forward tax credit shall be allowed for any assessment year to the extent of the difference between the tax on the total income and the tax which would have been payable under section 115JB for that assessment year. 9.2 In other words, MAT credit will be allowed ....

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.... note that the above format of ITR 6 was amended w.e.f. AY 2012-13 by CBDT. Moreover, this is more relevant for the department also. These formats are regulated by CBDT. Assessing Officer cannot overlook these formats and (interpret it in his own method of calculating tax credit while making assessment u/s 143(1) of the Act.) proceed to calculate the MAT credit to compute assessment u/s 143(1) applying different methods when the proper and correct method as proposed by CBDT in ITR-6. The Assessing Officer is expected to follow the ITR-6 format to complete the assessment u/s 143(1) or 143(3) of the Act. 9.5 Let us also analyse the case law of Richa Global Exports Pvt. Ltd. which was applied by CIT(A), the Delhi ITAT opined that section 115JAA applied only to income tax, not of income tax as increased by surcharge and education cess. We are of the view that the Apex court decision in the case of K. Srinivasan (supra) may not have been brought to the knowledge of the ITAT, Delhi. Moreover, the explanation 2 of section 115JB is applicable to calculate tax liability u/s 115JB and the same explanation should also be applied for giving credit u/s 115JAA. The tax liabilities calcu....