IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 28.04.2009 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN and THE HONOURABLE MR.JUSTICE M.M.SUNDRESH Tax Case (Appeal)No.367 of 2008 Commissioner of Income Tax Madurai Appellant v. M/s.Madras Cements Limited Auras Corporate Centre, V Floor Mylapore, Chennai – 600 004. Respondent Tax Case Appeal filed under section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras 'D' Bench, Chennai, dated 25.5.2007 passed in ITA No.2605/Mds/2004 relating to the assessment year 2001-2002 against the order of the Commissioner of Income Tax (Appeals) II, Madurai dated 16.7.2004 and passed in ITA No.89/2004-05 and against the order of the Deputy Commissioner of Income Tax Circle I, Virudhunagar, dated 29.3.2004 and passed in PAN/GIR.No.AABCM 8375L:M-117/DCIT/VNR, for the assessment year 2001-2002. For appellant : Mrs.Pushya Sitaraman For Respondent: Mr.P.J.Rishikesh JUDGMENT (Judgment of the Court was delivered by K.RAVIRAJA PANDIAN,J.) The appeal has been preferred by the revenue against the order of the Income Tax Appellate Tribunal, Madras 'D' Bench, Chennai, dated 25.5.2007 passed in ITA No.2605/Mds/2004 relating to the assessment year 2001-2002. 2. The material facts as culled out from the statement of facts in the memorandum of grounds of appeal are stated below:- The assessee is a public limited company and is engaged in the business of manufacture and sale of cement. For the assessment year 2001-2002, the assessee company filed its return of income, wherein the assessing officer considered the interest under Section 234C prior to MAT credit and thus completed the https://hcservices.ecourts.gov.in/hcservices/ assessment. Aggrieved by the said order, the assessee filed an appeal before the Commissioner of Income Tax(Appeals), who directed the assessing officer to give the method of computation of interest under Section 234C specifying the quantum, period and rate of interest. He also further directed him to charge interest under Section 234C on the tax payable on the returned income after deducting the MAT credit and TDS. Aggrieved by the order of the Commissioner of Income-tax (Appeals), the revenue filed an appeal before the Income-tax Appellate Tribunal and the Tribunal allowed the appeal in favour of the assessee following its earlier order in the case of Chemplast Sanmar Limited Vs. DCIT, (2004) 83 TTJ (Chennai) 427 held that the MAT credit had to be allowed prior to levy of interest under Sections 234B and 234C of the Act. Aggrieved by the same, the revenue filed this appeal by formulating the following questions of law: "1. Whether in the facts and circumstances of the case, the Tribunal was right in holding that MAT credit is to be set off from the tax payable before levying interest under Section 234B and 234C of the Income tax Act, 1961? 2. Whether on the facts and circumstances of the case the MAT credit can be given priority of set off against tax payable, contrary to the Scheme of Schedule G of Form 1? 3. We heard the arguments of the learned counsel for the appellant and perused the materials available on record. 4. The very same issues involved in this appeal have been considered by the Division Bench of this Court in T.C.A.Nos.887 of 2004 etc. batch on 09.04.2009 and the Division Bench has answered in favour of the assessee and against the revenue by observing as follows: "7.In respect of the first question of law, the arguments advanced by the counsel on either side are the same as the one advanced before the Delhi High Court cited supra. The Delhi High Court has considered the relevant provisions and dealt with the matter in detail and held that the credit under Section 115JAA should be given effect to before charging of interest under Section 234A, 234B and 234C of the Act. We are in agreement with the reasoning given by the Delhi High Court. The learned counsel appearing for the revenue has not produced any materials or given compelling reasons to take a contrary view with that of the Delhi High Court. In such circumstances, we answer the first question in favour of the assessee and against the revenue. ...... 18. In the present case, the intention of https://hcservices.ecourts.gov.in/hcservices/ the legislature is to give tax credit to tax and not to the tax and interest. Once the intention is clear, the revenue cannot rely on the Form-I to say that the MAT credit under Section 115JAA should be given only after tax and interest. Further we have answered the first question of law in favour of the assessee i.e. the MAT credit under Section 115JAA should be given effect to before charging the interest under Section 234B and 234C. Rule 12(1)(a) and Form-I cannot go beyond the provisions of the Act. Form-I cannot lay down the order of priority of adjustment of TDS, advance Tax, MAT credit under Section 115JAA which is contrary to the provisions of the Act. The order passed by the Tribunal is in accordance with law and we do not find any error or illegality in the order of the Tribunal so as to warrant interference. Accordingly, we answer the questions 2 and 3 also in favour of the assessee and as against the Revenue." 5. The questions of law in this appeal are identical to the one considered by the Division Bench. Therefore, following the Division Bench Judgment stated supra, the appeal is dismissed since the questions of law have already been answered in favour of the assessee. krr Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar To 1. The Assistant Registrar Income Tax Appellate Tribunal, III Floor, Besant Nagar, Madras 90. 2.The Commissioner of Income Tax Chennai 3.The Income Tax Appellate Tribunal, Chennai 'D' Bench, Chennai. https://hcservices.ecourts.gov.in/hcservices/ 4.The Deputy Commissioner of Income Tax, Cirle I, Virudhunagar. + 1 cc to M/s. Pushya Sitaraman, Advocate SR No.18390 KSK(CO) SR/9.6.2009 T.C.(A)No.367 of 2008 https://hcservices.ecourts.gov.in/hcservices/