TMI Blog2004 (1) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 115JAA for carry forward from assessment year 1997-98 82,74,895 --------------------- 34,19,988 Less: TDS 25,79,802 --------------------- 8,40,186 Add: Interest under section 234C 3,605 --------------------- 8,43,791 Less: Advance tax 31,50,000 --------------------- Refundable 23,06,209 Less: Refunded as per intimation under section 143(1) dated 8-9-1999 23,06,209 --------------------- Balance NIL ----------------------------------------------------------------- 3. On verification of the records, it appeared to the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Chapter VIII are to be allowed deduction in computing the amount of income tax on the total income whereas section 115JAA(5) envisages only a set off of the eligible amount of tax credit against the tax on the total income. The tax credit under section 115JAA which is to be set off after determining the tax payable on total income cannot possibly be equated to the rebates under Chapter VIII which are deductible in computing the tax on the total income itself. Neither can it be said that such eligible tax credit qualifies for deduction as advance tax or tax deducted/collected at source, from the tax payable on the total income for arriving at the assessed tax under section 234B/234C. In any case, the Assessing Officer has not applied his mind to all these legal considerations and given a finding. The assessee's argument in this regard is not therefore tenable." Accordingly, the assessment order was set aside and direction was given to the Assessing Officer to redo the assessment afresh. The present appeal is against the above revision order. 6. Shri Thomson Thomas, the learned Chartered Accountant appearing for the assessee-company argued the case at length. His contentions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e total income has been determined under section 143(3). At the same time, while computing the tax payable, the application of the provisions of section 115 JAA are mandatory, in view of the language used in sub-section (1) thereof. Therefore, it is the contention of the learned Chartered Accountant that whenever tax becomes payable on the total income of an assessee, the Assessing Officer has necessarily to grant the benefit of set off of the tax credited as provided in sub-section (4). The result is that the tax liability worked out on the total income has to be reduced first by the credit under section 115JAA(4). It is from the remainder that credit is to be given towards the payment of advance tax and credits available under TDS. 10. The learned Chartered Accountant further explained the three steps involved in computing "assessed tax" under section 234B, such as computation of total income at the first instance, computation of tax on total income at the second instance and thirdly, deduction of tax deducted at Source and collected at source from the tax determined in the second step above. According to the learned Chartered Accountant, intervention of tax credit allowable un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned Chartered Accountant further contended that an order under section 263 could be passed only if the order passed by the Assessing Officer is erroneous insofar as it is prejudicial to the interests of revenue. It was held in Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 834 (SC) that when two views are possible and the Assessing Officer has taken one view with which the Commissioner does not agree, it cannot be treated as erroneous or prejudicial to the interests of Revenue. 14. The learned Chartered Accountant therefore submitted that the revision order passed by the CIT may be set aside. 15. Smt. Sosamma Mathew, the learned Departmental Representative appearing for the Revenue, defended the revision order passed by the Commissioner of Income-tax. The learned departmental representative submitted that as per the language used in Explanation 1 to section 234B, "assessed tax" does not include any items other than the tax deducted or collected at source in accordance with the provisions of Chapter XVII on any income, which is subject to such deduction or collection and which is taken into account in computing such total income. The learned departmental representativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepted. Sub-section (1) of section 115JAA provides that where any amount of tax is paid under sub-section (1) or section 115JA, by an assessee being a company for any assessment year, then credit in respect of tax so paid shall be allowed to it in accordance with the provisions of the said section. Sub-section (2) deals with the quantification of the amount of tax credit sub-section (3) allows an assessee to carry forward the amount of tax credit. Sub-section (4) further provides for the set off of the carried forward tax credit in an year when tax becomes payable on the total income computed in accordance with the provisions of the Act other than section 115JAA. 20. Therefore, it could be seen that the benefit of carry forward and set off of tax credit available to an assessee under section 115JAA goes to reduce the tax liability of an assessee. The liability to pay advance tax is invariably linked to the liability for payment of the assessed tax. It is when the payment of advance tax is lesser than the specified limit when compared to the assessed tax, the question of non-payment of advance tax and the question of deferment of advance tax arise in. It is to be seen therefore t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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