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2016 (8) TMI 967 - CALCUTTA HIGH COURT

2016 (8) TMI 967 - CALCUTTA HIGH COURT - TMI - Set-off of MAT Credit under Section 115JAA brought forward from earlier years against tax on total income including surcharge and education cess instead of adjusting the same from tax on total income before charging such surcharge and education cess - Held that:- In determining the liability of the assessee the first step has to be determination of tax payable. The Income Tax Act contemplates self-assessment by the assessee and quarterly payment of .....

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tax payable has been ascertained. Then the question arises for giving credit for the amount of tax already paid in advance or credit which is statutorily available to the assessee. Only thereafter the question of any addition on account of interest might arise. This was explained by Their Lordships. - It is not correct to say that the judgement in the case Tulsyan Nec Ltd. [2010 (12) TMI 23 - Supreme Court of India] has no application to the facts and circumstances of this case. - Our at .....

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J. FOR THE APPELLANT : MR. J.P.KHAITAN, SR. ADVOCATE, MR. SOMAK BASU, ADVOCATE FOR THE RESPONDENT : MRS. SMITA DAS DE, ADVOCATE The Court : The subject matter of challenge is a judgment and order dated 4th January, 2016 passed by the learned Income Tax Appellate Tribunal, Kolkata, A Bench, Kolkata in ITA No.3838/Del/2013 pertaining to the assessment year 2008-09 by which the learned Tribunal dismissed an appeal preferred by the assessee. The assessee has come up in appeal. The appeal is at the a .....

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vident that the Allahabad High Court had answered the issue in favour of the assessee. But the learned Tribunal took a different view. We, therefore, thought it fit to admit the appeal and to hear it out on merits. The question raised by the assessee has its route in the form of Income Tax Return. In other words, the assessee, we are inclined to think, was probably inspired to raise the issue by the form of income tax return for the assessment year 2008-09, the relevant portion whereof reads as .....

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er credit under section 115JAA [(3 - 4)] 5 6 Rebate under section 88E (4 of Schedule-STTR) 6 7 Balance Tax Payable (5-6) 7 8 Surcharge on 7 8 9 Education cess, including secondary and higher education cess on (7+8) 9 10 Gross tax liability (7+8+9) 1 0 Portion of the form set out herein above suggest that the credit under section 115JAA has to be allowed before addition is made on account of surcharge and cess. The assessee wants that it should be allowed to do so. The learned Tribunal, however, .....

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of tax liability on total income 1 1 a Tax Payable on deemed total Income under section 115JB (7 of Schedule MAT) 1 a 1 b Surcharge on (a) above 1 b 1 c Education Cess on (1a + 1b) above 1 c 1 d Total Tax Payable u/s 115JB (1a+1b+1c) 1 d 2 Tax payable on total income in item 11 of Part B-TI a Tax at normal rates 2 a b Tax at special rates (11 of Schedule-SI) 2 b c Tax Payable on Total Income in item 11 of Part B-TI (2a + 2b) 2c 3 Surcharge on 2c 3 4 Education cess, including secondary and higher .....

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rescribed for the year 2008-09 which continued to hold the field up to the year 2011-12, answered the issue as follows:- The aforesaid entries leave no manner of ambiguity in regard to the method of computation of tax liability. Entry 3 requires computation of the gross tax payable. Under entry 4, credit is required to be given under section 115JAA of the Act of the tax paid in earlier years. Entry 5 requires a computation of the tax payable after credit under section 115JAA of the Act. The matt .....

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d for any assessment year at any rate or rates, income-tax at that rate or those rates shall be charged for that year in accordance with, and [subject to the provisions (including provisions for the levy of additional income-tax) of, this Act] in respect of the total income of the previous year [***] of every person: Provided that where by virtue of any provision of this Act income-tax is to be charged in respect of the income of a period other than the previous year, income-tax shall be charged .....

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aid under sub-section (1) of section 115JB by an assessee, being a company for the assessment year commencing on the 1st day of April, 2006 and any subsequent assessment year, then, credit in respect of tax so paid shall be allowed to him in accordance with the provisions of this section. (2A) The tax credit to be allowed under sub-section (1A) shall be the difference of the tax paid for any assessment year under sub-section (1) of section 115JB and the amount of tax payable by the assessee on h .....

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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 [ or section 115JB, as the case may be] for that assessment year. (6) Where as a result of an order under sub-section (1) of subsection (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 und .....

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us year relevant to the assessment year commencing on or after the 1st day of April, [2007], is less than [ten per cent] of its book profit, [such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee on such total income shall be the amount of income-tax at the rate of [ten per cent]] He submitted that section 115JB provides for payment of income tax at the rate of 10%. The sub-section 1 does not provide for any payment on account of surcharge or .....

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visions contended that section 115JB provides for payment of income tax at the rate of 10% and section 115JAA provides for credit computed on the basis of tax paid and tax payable. He contended that tax paid has to be the tax calculated under Sub-section 1 of Section 115JB and payable has to be assessed on the basis of normal computation without taking into account any surcharge because surcharge is not chargeable under the provisions of the Income Tax Act. In support of his submission he relied .....

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count. c) Similarly in calculating the amount of credit the amount of surcharge and cess paid by the assessee are to be excluded. We have not been impressed by the submissions advanced by Mr. Khaitan for the following reasons:- (a) It was not disputed by Mr. Khaitan that the credit in this case under section 115JAA was not claimed by the assessee without taking into account the amount of surcharge and cess. Therefore, the submission, which Mr. Khaitan advanced, does not match with the facts and .....

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of April, 2008, income-tax shall be charged at the rates specified in Part I of the First Schedule and such tax as reduced by the rebate of income-tax calculated under Chapter VIII-A of the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act) shall be increased by a surcharge for purposes of the Union calculated in each case in the manner provided therein. Second proviso to Sub-section (3):- Provided further that in respect of any income chargeable to tax under sect .....

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creased by an additional surcharge, for purposes of the Union, to be called the Education Cess on income-tax , calculated at the rate of two per cent of such income-tax and surcharge so as to fulfil the commitment of the Government to provide and finance universalised quality basic education. Sub-section (12). The amount of income-tax as specified in subsections (1) to (10) and as increased by a surcharge, for purposes of the Union, calculated in the manner provided therein, shall also be increa .....

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tax as reduced by the rebate of income tax calculated under Chapter VIII-A of the Income tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income tax Act) shall be increased by a surcharge…………… (b) Second proviso to Sub-section 3 of the Finance Act, 2008 provides, inter alia as follows:- …….. the amount of income tax computed under this Sub-section shall be increased by a surcharge,……. (c )Sub-section 11 of Section 2 of the .....

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as specified in sub-sections (1) to (10) and as increased by a surcharge, for purposes of the Union, calculated in the manner provided therein, shall also be increased by an additional surcharge, for purposes of the Union, to be called the Secondary and Higher Education Cess on income tax , …... All the provisions quoted above speak about income tax being increased by the amount of surcharge and cess. Can it in that case be contended that surcharge is anything other than Income Tax? We t .....

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cess? The answer we think again is an emphatic no . The reason behind increase of income tax by the amount of surcharge and cess has been spelt out on the basis whereof it can be said that the intention is that part of the amount realized by way of income tax is earmarked for being spent in education and higher education. We are, as such, of the opinion that the view taken by the learned Tribunal is a correct view. The learned Tribunal has relied on the judgement of the Apex Court in the case of .....

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rmining the liability of the assessee the first step has to be determination of tax payable. The Income Tax Act contemplates self-assessment by the assessee and quarterly payment of tax in advance and the rest with the filing of the return. Interest can be realised only for the amount in default. Interest cannot be charged for an amount which has already been paid or for which the assessee is entitled to a credit. Before any question of realising interest may arise the amount of liability on acc .....

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rrect to say that the judgement in the case Tulsyan Nec Ltd. [supra] has no application to the facts and circumstances of this case. In the case before us, the assessee has drawn inspiration from a mistake in the form of the income tax return. Identical mistake was also involved in the case of Tulsyan Nec Ltd. [supra]. But that was a mistake with regard to the calculation of interest and it is on this basis that the claim against the assessee was raised far in excess of what was payable by the a .....

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