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2019 (7) TMI 185 - HC - Income TaxMAT credit computation u/s 115JAA - Inclusion of surcharge and cess in MAT credit by tribunal - Case of K. SRINIVASAN [1971 (11) TMI 2 - SUPREME COURT] applicability to issue - HELD THAT:- Explanation (2)(iii) and (iv) to Section 115JB of the Act states that for the purposes of Clause (a) of Explanation 1 to Section 115JB of the Act, the amount of income tax shall include surcharge as levied by the Central Acts from time to time and education cess on income-tax, if any, as levied by the Central Acts from time to time. The Hon'ble Supreme Court, in the case of K.Srinivasan, took note of the legislative history of the Finance Act as also the practice to indicate that the term "income tax" as employed in Section 2 of the Finance Act, which includes surcharge as also the special and the additional surcharge whenever provided which are also surcharges within the meaning of Article 271 of The Constitution. The Hon'ble Supreme Court took note of the distinction made by the High Court in the case and held that the distinction made by the High Court that the surcharges are levied only under the Finance Act and income tax under the Act may not hold good. The Hon'ble Supreme Court explained the term 'surcharge' to mean as the charge in addition to or subject to an additional or extra charge. The decision of the Hon'ble Supreme Court in the case of K.Srinivasan will apply with full force to the assessee's case. Furthermore, if we refer to the circular of the Central Board of Direct Taxes in Circular No.3 of 2018 dated 11.7.2018, which fixed the monetary limit for filing appeals by the Department before the Tribunals, High Courts and Supreme Court, one gets a fair idea as to what was the understanding of the term 'tax' by the Board. If we have a look at paragraph 4 of the said circular, the Board states that for the purposes of the said Circular, tax effect shall be tax including applicable surcharge and cess. Though the case on hand is not hit by the monetary limit according to Mr.T.R.Senthilkumar, learned Senior Standing Counsel, yet, on a perusal of the said circular, it is evidently clear that consistently, the understanding of the Board was that tax includes applicable surcharge and cess. For the above reasons, we are of the view that the Revenue has not made out any case to interfere with the order passed by the Tribunal. - Decided against the Revenue.
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