TaxTMI 
TaxTMI 
2020 (7) TMI 158
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....the "Act") reducing the MAT credit entitlement of the Appellant to the extent of Rs. 5,68,28,807/- on the ground that certain transfer pricing adjustments for earlier A. Y. 2011 -12 have been affirmed by the Dispute Resolution Panel ("DRP"). 1.1 That the CIT(A) erred on the facts and in law in not appreciating that the issue of reduction of MAT credit under Section 115JAA is debatable in nature and the same cannot be rectified under Section 154 of the Act. 1.2 Without Prejudice, the CIT(A) erred on the facts and in law in not appreciating that the transfer pricing adjustments confirmed by the DRP for AY 2011-12 are sub-judice before the Tribunal and, in any case, are covered by the orders of the Tribunal for the earlier years. 2. That the CIT(A) erred on facts and in law in confirming the action of the AO in charging interest under Section 234B of the Act on account of above reduction in the MAT credit." 3. Brief facts shows that the assessment in this case was completed u/s 143 (3) of the income tax act 1961 on 31st of December 2016 at an assessed income of Rs. 599,057,890/- as against the returned income of Rs. 526,519,530/- after making the addition....
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....ained finality, no action should be taken to the detriment of the parties to the dispute. Assessee further relied on several judicial precedents. Learned CIT - A, as per para number 6.3 of his order, held that AO has rectified order on the basis of the prima facie mistake apparent from the record. As AO has allowed excess credit of MAT Credit to appellant where appellant is not entitled to get the credit of Rs. 56,828,807/-, on the basis of the addition made in the case of the appellant on account of transfer pricing adjustment in assessment year 2011 - 12. He therefore held that mistake is apparent from record and wrongly excess credit allowed by the AO to the appellant. Therefore, learned assessing officer was justified in correcting mistake apparent from the record. Accordingly, appeal of assessee was dismissed. 6. Aggrieved, with the order of the learned CIT (A), assessee preferred an appeal before us. At the outset it was found that the appeal is delayed by 30 days. Assessee has filed condonation letter dated 7 March 2019. According to that letter, assessee has submitted that order of the learned CIT - A dated 22 April 2019, was received by appellant on 08-05- 2019 and ther....
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....red to the provisions of Section 115 JAA (4) and (5) where the tax credit is allowed to be set-off to the assessee. He submitted that provisions of Section 115 JAA (4) leaves scope for the debate that whether the tax credit allowable to the assessee is an option of the assessee or it is automatic. He submitted that therefore the action of the learned assessing officer is not correct. He further referred to the page number six of the paper book which is an audit objection dated 23rd may 2017 based on which the rectification proceedings are initiated. He therefore submitted that the action of the learned assessing officer and subsequent confirmation by the learned CIT - A not in accordance with the law. 10. Contesting the argument of the learned authorised representative, the learned departmental representative vehemently supported the order of the learned CIT - A stated that when the language of the act is clear there cannot be any debate. He submitted that there is no option available to the assessee alternative is available to the assessee with respect to the set-off of the mat credit and therefore the learned assessing officer has correctly zero jurisdiction u/s 154 of the inc....
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....forward and set off in accordance with the provisions of sub-sections (4) and (5) but such carry forward shall not be allowed beyond the 75[tenth] assessment year immediately succeeding the assessment year in which tax credit becomes allowable under sub-section (1A).] (4) The tax credit shall be allowed set-off in a year when tax becomes payable on the total income computed in accordance with the provisions of this Act other than section 115JA 76[or section 115JB, as the case may be]. (5) Set off in respect of brought forward tax credit shall be allowed for any assessment year to the extent of the difference between the tax on his total income and the tax which would have been payable under the provisions of sub-section (1) of section 115JA 76[or section 115JB, as the case may be] for that assessment year. (6) Where as a result of an order under sub-section (1) or sub-section (3) of section 143, section 144, section 147, section 154, section 155, sub-section (4) of section 245D, section 250, section 254, section 260, section 262, section 263 or section 264, the amount of tax payable under this Act is reduced or increased, as the case may be, the amount of....
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....d. We do not find any reason to disturb the finding of the lower authorities that the learned assessing officer has correctly assumed jurisdiction u/s 154 of the income tax act to rectify MAT credit granted to the assessee wrongly. Therefore, we dismiss ground number 1.1 of the appeal. 13. With respect to the ground number 1.2, e assessee has contested that the transfer pricing adjustment confirmed by the learned Dispute Resolution Panel for assessment year 2011 - 12 are subjudice before the tribunal. In any case, they are covered by the orders of the tribunal for the earlier years and therefore the learned assessing officer should not have exercised the power u/s 154 of the income tax act to withdraw MAT credit already granted to the assessee. We do not find any justification in the above argument of the assessee. Merely because the assessee has disputed the assessment before the higher appellate forum, it does not deprive the right of the revenue to rectify the assessment order or the tax demand raised against the assessee provided the action of the assessing officer false within the parameters of Section 154 of the act. Learned CIT - A has correctly rejected this argument of ....
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....W energy Ltd (2015) 379 ITR 36 (BOM) wherein it has been held that due to the retrospective effect from 1-4 -2001 u/s 115JB of the act interest would not be levied u/s 234B of the act. He therefore submitted that both these decisions support the case of the assessee and therefore the interest charged by the learned AO and confirmed by the learned CIT - A deserves to be deleted. 16. The learned departmental representative vehemently opposed argument of the learned authorised representative and supported the orders of the lower authorities. It was stated that the interest chargeability u/s 234B of the income tax act is a mandatory provision. He further submitted that the decision relied upon by the learned authorised representative does not fit into the facts of the present case. He further submitted that in the present case, there was merely an error apparent from the record where the excess credit was granted to the assessee, who should not have been granted and the same has been rectified by the learned assessing officer. He further submitted that that at the first instant itself the interest u/s 234B would have been chargeable had the correct credit was determined by the learn....
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....leniency if there is a shortfall arising because of the interpretation of the law or unclear tax liability to the assessee. It may also happen where the advance tax liability arises because of a subsequent court ruling or an amendment. In all these cases, courts have taken a lenient view to not to allow the assessing officer to charge interest u/s 234B of the act. However, before us that is not the case. Here it is a clear-cut case of computational error. Anybody, either the AO or the assessee, would have computed the tax liability of the assessee at that particular time would have correctly claimed MAT credit available to the assessee and charged interest u/s 234B of the income tax act. Therefore, we do not find any infirmity in the order of the learned assessing officer in computing interest liability u/s 234B of the income tax act. 18. The decision relied upon by the learned authorised representative in case of 316 ITR 141 held that the assessee could not have included the interest received on enhanced compensation in the assessment year and the consideration while estimating income for the purpose of calculation of advance tax for the relevant years. In that particular case ....