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Assistant Commissioner of Income Tax and Deputy Commissioner of Income Tax, Circle-10, Kolkata Versus M/s. I.C.I. India Ltd

Credit for MAT paid in earlier assessment years at par with other prepaid taxes - Held that:- After hearing the rival submissions and perusing the material available on record, we find that the Hon’ble Supreme Court in the case of Sage Metals Limited reported in (2012 (10) TMI 802 - SUPREME COURT) has held as under:-

“Entitlement of MAT credit is not dependent upon any action taken by the Department. However, quantum of tax credit will depend upon the assessment framed by the Assessin .....

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tion in accordance with law after providing reasonable opportunity of being heard to the assessee. - Decided in favour of revenue for statistical purposes. - I.T.A. No. 2612/KOL/ 2005, I.T.A. No. 385/KOL/ 2007 - Dated:- 1-9-2015 - Shri S.V. Mehrotra and Shri Mahavir Singh, JJ. For The Department : Shri Sachidananda Srivastava, CIT, D.R., For The Assessee : Shri R.N. Bajoria, Sr. Advocate, ORDER Per S.V. Mehrotra: We first take up the ITA No. 2612/KOL/2005. The appeal has been filed by the Revenu .....

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under:- The date of limitation in the case expired on 12.12.2005. The appeal could not be filed by the above due date and there is delay of 8 (eight) days in filing the appeal. Date-wise delay is explained hereunder:- Date Grounds 12.12.2005 File was considered by the CIT 13.12.2005 Filing of appeal authorised by CIT 14.12.2005 Papers could not be made ready as dealing clerk was absent. 15.12.2005 Papers could not be made ready as dealing clerk was absent. 16.12.2005 Appeal papers made ready 17 .....

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e the delay and the appeal is admitted. 4. Brief facts of the case are that the assessee-Company had filed its return of income showing total income of ₹ 79,19,67,310/-. The assessment order was passed under section 143(3) on 30.03.2005, wherein brought forward MAT credit under section 115JAA for assessment year 1999-2000 (as per order under section 154/143(1) dated 18.06.2003) amounting to ₹ 6,33,13,438/- was allowed. Subsequently another order under section 147/143(1) for assessmen .....

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f Hon ble ITAT, Chennai Bench in the case of Chemplast Sunmar Ltd. -vs.- DCIT reported in 84 TTJ 427 and the decision of the Hon ble ITAT, Chandigarh Bench in the case of Philips India Ltd. -vs.- ACIT reported in 92 ITR 441 directed the Assessing Officer to allow admissible available MAT credit as per the Income Tax Act and Rules after verification of available MAT credit under section 115JAA for the assessment year 1999-2000 to be carried forward and set off in the subsequent years. 6. Ld. Sr. .....

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The entire scheme of sections 115JA(1) and 115JAA shows that if an assessee is entitled to a tax credit as a consequence of the assessee making payment of tax under section 115JA(1) in the year one, then, the set off of such tax credit follows as a matter of course once the conditions mentioned in section 115JAA are fulfilled and the grant of such credit is not dependent upon determination by the Assessing Officer save and except that the ultimate amount of tax credit to be allowed will be depe .....

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epend upon the assessment framed by the Assessing Officer. Thus, the right to set off arises as a result of the payment of tax under section 115JA(1) although quantification of that right depends upon the ultimate determination of total income for the first assessment year. Further, an assessee has a right to take into account the set off even while estimating its liability to pay advance tax on the "current income" in accordance with the provisions of Chapter XVII-C. Although section .....

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so entitled as discussed above) to the credit and thereafter claims a refund of such advance tax paid as a consequence of the set off. Moreover, when an Assessing Officer makes an intimation under section 143(1) he accepts the return filed by the assessee to which the Assessing Officer may make an adjustment and consequently makes a demand or refund. Section 143(1) provides that where a return is made under section 139 and if any tax or interest is found due on the basis of such return after adj .....

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give credit for all taxes paid either by way of deduction at source, advance tax, self assessment tax or tax paid otherwise which would include or which cannot exclude tax credit under section 115JAA(1). However, the question before us is of priority of adjustment for the MAT credit. In this connection, it is important to bear in mind that the credit allowed is the excess of the normal tax liability over MAT liability in the subsequent years. In this connection the following illustration on MAT .....

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is - how should the advance tax be calculated when the Company has MAT credit? 11. To answer, we need to look at section 2348. Under that section, "assessed tax" means the tax on the total income determined under section 143(1) or on regular assessment under section 143(3) as reduced by the amount of 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 com .....

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Parliament amended Explanation 1 to section 2348 by Finance Act, 2006 with effect from 1-4-2007 to provide along with tax deducted or collected at source, MAT credit under section 115JAA also to be excluded while calculating assessed tax. 12. From the above, it is evident that any tax paid in advance/pre-assessed tax paid can be taken into account in computing the tax payable subject to one caveat, viz., that where the assessee on the basis of self computation unilaterally claims set off or MAT .....

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equired to pay advance tax, and if he fails, interest under section 234B would be chargeable. The consequence of adopting the case of the Department would lapse after five succeeding assessment years under section 115JAA(3); that no interest would be payable on such credit by the Government under the proviso to section 115JAA(2) and that the assessee would be liable to pay interest under sections 234B and 234C on the shortfall in the payment of advance tax despite existence of MAT credit standin .....

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section 115JAA(4). Further, a form prescribed under the rules can never have any effect on the interpretation or operation of the parent statute . 6.1. Ld. Sr. Counsel for the assessee further submitted that the appeal for assessment year 1999-2000 is still pending before the Tribunal and the appeal for assessment year 2000-01 has been disposed of, therefore, the matter may be restored back to the file of Assessing Officer for allowing MAT credit in accordance with the decision of the Hon ble Su .....

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