9911796707
TMI Blog2009 (4) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... arned CIT(A) ought to have seen that Circular No. 763, dt. 18th Feb., 1998 has made the intention of the statute very clear that the benefit of carry forward of MAT credit is restricted to only five assessment years immediately succeeding the assessment year in which the MAT was paid. 2.3 The learned CIT(A) erred in accepting the assessee's contention in this case that the asst. yr. 1998-99 should be counted as zero and asst. yr. 1999-2000 as the first assessment year etc. to come to the conclusion that the MAT credit would be available to the assessee for the assessment year under consideration also in that method of accounting. 3. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision, the tax credit on account of 115JAA for the asst. yr. 1997-98 will be available for set off upto asst. yr. 2002-03 only and after that it cannot be set off. Hence, tax credit of Rs. 14,69,706 claimed and allowed for asst. yr. 2003-04 should be disallowed and brought to tax. Hence, in order to withdraw the claim of MAT credit for asst. yr. 2003-04, a notice under s. 154 was issued to the assessee. The assessee company in its reply filed claimed that the tax credit shall be allowable for set off from the asst. yr. 1998-99 which succeeds asst. yr. 1997-98 in which tax credit was allowed for the succeeding 5 years i.e., from the asst. yr. 1999-2000 upto the asst. yr. 2003-04. But as per the provision stated above, the set off of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carry forward is allowable under s. 115JAA(3) of the Act'. 7.1 The scheme of levying minimum alternative tax (MAT) on zero-tax companies was introduced by the Finance Act, 1996 w.e.f. 1st April, 1997. A new s. 115JAA was also inserted to provide for a tax credit scheme by which the MAT paid can be carried forward for set off against regular tax payable during the subsequent years, subject to certain conditions. The sub-ss. (1), (2) and (3) of s. 115JAA read as under: "115JAA (1) Where any amount of tax is paid under sub-s. (1) of s. 115JA by an assessee being a company for any assessment year, then, credit in respect of tax so paid shall be allowed to him in accordance with the provisions of this section. (2) The tax credit to be allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st. Tax credit allowed Tax credit availed No. of yr. under s. 115JA under s. 115JAA years allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; 1 --------------------------------------------------------- 2000-01 0 2 --------------------------------------------------------- 2001-02 32,37,939 3 --------------------------------------------------------- 2002-03 &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -s. (3) of s. 115JAA. The carry forward is available for a total of six (1 + 5) years. It appears that the above confusion has arisen because of the language used in the CBDT Circular No. 763, dt. 18th Feb., 1998. The para 45.4 of this circular, dealing with 'MAT on companies', reads as under: "45.4 The Act also inserts a new s. 115JAB to provide for a tax credit scheme by which the MAT paid can be carried forward for set off against regular tax payable during the subsequent five years period subject to certain conditions, as under: (1) When a company pays tax under MAT, the tax credit earned by it shall be an amount which is the difference between the amount payable under MAT and the regular tax. Regular tax in this case means the tax pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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