IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 09.04.2009 CORAM THE HONOURABLE MR. JUSTICE K.RAVIRAJA PANDIAN AND THE HON'BLE MR.JUSTICE P.P.S.JANARTHANA RAJA T.C.(A) Nos.887 of 2004, 2246, 2248, 2277, 2305, 2322, 2323, 2341, 2484, 2495, 2606, 2614, 2615, 2635, 2656, 2706, 2707, 2713 & 2722 of 2006, 10, 22, 112, 269, 270, 382, 400, 410, 485, 488, 517, 627, 646, 647, 684, 686, 717, 729, 871, 949, 1006 to 1008 & 1162 of 2007, 81 to 84, 244, 245, 356, 543, 578, 1450, 2126, 2213,2214, 2215 & 2441 of 2008 The Commissioner of Income Tax, Chennai. ...Appellant in 887/04,2246, 2248,2277,2305,2322,2323, 2341,2484,2495,2606,2614, 2656,2706,2713/06,1112,269, 270,282,400,410,485,488,517, 627,646,647,684,686,7117,949 1006 to 1008/07,81 to 84/08, 244,245,356,543,548,1450, 2213,2214,2215,2441/08 Commissioner of Income Tax, Madurai .. Appellant in TC.2615,2635, 2707,2722/06,TC.10,22, 729,871/07,TC.2126/08 The Commissioner of Income Tax, Coimbatore .. Appellant in TC.1162/07 Vs. M/S.CHEMPLAST SANMAR LIMITED, CHENNAI. ... RESPONDENT IN TC.887/04, 717/07,81 TO 84/08,245/08, 578/08 M/S.CHENNAI PETROLEUM CORPORATION LTD., REFINERIES HOUSE, MANALI, CHENNAI-68. .. RESPONDENT IN T.C.2246/06 M/S.B.N.T.INNOVATION PVT.LTD., 36, NELSON MANICKAM ROAD., CHENNAI-29. .. RESPONDENT IN T.C.2248/06 https://hcservices.ecourts.gov.in/hcservices/ M/S.ASHOK LEYLAND LTD., 19, RAJAJI SALAI, CHENNAI. .. RESPONDENT IN T.C.2277/06 M/S. FAIZAN SHOES PVT LTD, 55, (OLD.NO.26) VEPERY HIGH ROAD, PERIAMET, CHENNAI- 3. .. RESPONDENT IN T.C.2305/06 M/S.TITAN INDUSTRIES LTD, 3,SIPCOT INDUSTRIAL COMPLEX, HOSUR. .. RESPONDENT IN T.C.2322/06 M/S.ABAN ILYOD CHILLIES OFFSHORE LTD., EGMORE, CHENNAI. .. RESPONDENT IN T.C.2323/06 M/S.TAMIL NADU SALT CORPORATION LTD, LLA. BUILDING, 735 ANNA SALAI, CHENNAI. .. RESPONDENT IN T.C.2341/06 M/S.EID PARRY LTD, 234, NSC BOSE ROAD, .. RESPONDENT IN T.C.2484/06 CHENNAI- 1. T.C.244/08 ODICEE CARRIERS P LTD., OLD 261, THAMBU CHETTY ST., CHENNAI-1 .. RESPONDENT IN T.C.2495/06 M/S.ASHOK LEYLAND PROPERTIES LTD., 86, CHAMIERS ROAD,CHENNAI-18. .. RESPONDENT IN T.C.2606/06 M/S.LEATHER CRAFTS INDIA PVT. LTD. 11, KONDI CHETTY STREET,CHENNAI-1 .. RESPONDENT IN T.C.2614/06 M/S.SREE KADARI AMBAL MILLS LTD., SUPER B-3, INDUSTRIAL ESTATE, MADURAI. .. RESPONDENT IN T.C.2615/06 MADURA COATS LTD, NEW RAIL ROAD,MADURAI. .. RESPONDENT IN T.C.2635/06 M/S.AKHAF SHOES P LTD., 19/4, I FLOOR C BLOCK, ANUGRAHA APTS., N.H.ROAD, CHENNAI-34 .. RESPONDENT IN T.C.2656/06 M/S.COVANSYS (I) P LTD., UNIT-13, SDF BUILDING, MADRAS EXPORT PROCESSING ZONE, TAMBARAM, CHENNAI. .. RESPONDENT IN T.C.2706/06 M/S.SREE KALIKAMBAL MILLS LTD., CHOLAPURAM SOUTH, RAJAPALAYAM. .. RESPONDENT IN T.C.2707/06 https://hcservices.ecourts.gov.in/hcservices/ M/S. AKM TOWERS PVT LTD, 8,SECOND LANE, APPU STREET,MYLAPORE CHENNAI- 4. .. RESPONDENT IN T.C.2713/06 M/S.THIAYAGARAJAR MILLS LTD., KAPPALUR, .. RESPONDENT IN T.C.2722/06 MADURAI. T.C.871/07 M/S.SARAVANA SPINNING MILLS LTD., PITHALAIPATTI POST,DINDIGUL. .. RESPONDENT IN T.C.10/07 SENTHUR TEXTILE P LTD., 130A, GANDHI KALAI MANDRAM, RAJAPALAYAM. .. RESPONDENT IN T.C.22/07 M/S.TABLETS(INDIA) LTD, III FLOOR, JHAVER CENTRE, RA BUILDING, 19, MARSHALL ROAD, CHENNAI-8. .. RESPONDENT IN T.C.112/07 M/S.SHARON VENEERS (P) LTD, 12, SRIMAN SRINIVASAN ROAD, ALWARPET, CHENNAI. .. RESPONDENT IN T.C.269/07 M/S. NPT OFFSET PVT LTD, 231, ROYAPETTA HIGH ROAD, CHENNAI- 14. .. RESPONDENT IN T.C.270/07 M/S. KONE ELEVATOR (INDIA)PVT. LTD., 50, VANAGARAM ROAD, AYANAMBAKKAM, CHENNAI-102. .. RESPONDENT IN T.C.382/07 M/S.SUNDARAM BRAKE LININGS LTD, PADI, CHENNAI- 50. .. RESPONDENT IN T.C.400/07 M/S. AMBATTUR CLOTHING LTD, 86E/2 INDUSTRIAL ESTATE, AMBATTUR, CHENNAI-58. .. RESPONDENT IN T.C.410/07 M/S. C.P. ACQUACULTURE INDIA PVT LTD, 47/D2 GANDHIMANDAPAM ROAD, .. RESPONDENT IN T.C.485/07 KOTTURPURAM CHENNAI- 85. T.C.488/07 M/S.APPOLLO HOSPITALS ENTERPRISES LTD, ALI TOWERS 4TH FLOOR, 55 GREAMS ROAD, CHENNAI. .. RESPONDENT IN T.C.517/07 M/S.OMNEX QUALITY AND MANAGEMENT CONSULTANTS PVT LTD(NOW CHANGED TO) M/S.OMEX INDIA PVT LTD, 1/807-A,PILLAIYAR KOIL ST, THORAIPAKKAM, CHENNAI -96. .. RESPONDENT IN T.C.627/07 https://hcservices.ecourts.gov.in/hcservices/ M/S.TRIMEX INDUSTRIES LTD., "TRIMEX TOWERS" (IV FLOOR), 1, SUBBRAYA AVENUE, C.P.RAMASWAMY SALAI, CH-18. .. RESPONDENT IN T.C.646/07 & T.C.647/07 M/S.ADYAR STUDENTS XEROX PVT.LTD., 27, SARDAR PATEL ROAD., ADYAR, CHENNAI. .. RESPONDENT IN T.C.684/07 M/S.ARCHEAN GRANITES LTD., 32-D, NORTH CRESENT ROAD., T.NAGAR, CHENNAI-17. .. RESPONDENT IN T.C.686/07 M/S.SREE MANGAYAKARASI MILLS PVT.LTD., 60, NAVABATHKANA ST., MADURAI. .. RESPONDENT IN T.C.729/07 M/S.RADIAL PROTECTRON PVT.LTD., 9 ATHIAPPAN STREET, CHENNAI- 2. .. RESPONDENT IN T.C.949/07 TVS FINANCE & SERVICES LTD., (FORMERLY KNOWN AS HARITA FINANCE LTD.) JAYALAKSHMI ESTATES, HADDOWS ROAD., CHENNAI-6. .. RESPONDENT IN T.C.1006/07 TO 1008/07 PREMIER INDUSTRIAL DTIVES PVT.LTD., INDIA HOUSE, TRICHY ROAD, COIMBATORE. .. RESPONDENT IN T.C.1162/07 M/S.ASHOK LEYLAND LTD., 19, RAJAJI SALAI, CHENNAI 600 001. .. RESPONDENT IN T.C.356/2008 M/S. VIVEK LTD., 133, ROYAPETTAH HIGH ROAD, MYLAPORE CHENNAI- 4. .. RESPONDENT IN TC.543/2008 M/S.ALTHAF SHOES PVT. LTD., "ANUGRAHA APARTMENTS" 1ST FLOOR, 1-A, C-BLOCK, 19, N.H.ROAD, CHENNAI-34. .. RESPONDENT IN T.C.1450/08 SREE AYYANAR SPINNING WEAVING MILLS LTD., MILL PREMISES, MALLANGINAR 626 109. .. RESPONDENT IN T.C.2126/08 M/S. TRIDENT TEXTILE MILLS LTD., NO.36, NELSON MANCKAM ROAD, AMIJIKARI CHENNAI- 29. .. RESPONDENT IN T.C.2213/08 M/S. TAMIL NADU TELECOMMUNICATIONS LTD., NO.42, ANNA SALAI, III FLOOR, CHENNAI- 2. .. RESPONDENT IN T.C.2214/08 https://hcservices.ecourts.gov.in/hcservices/ M/S UNIVERSAL PRINT SYSTEM LTD., NO.9, MONTIETH LANE, EGMORE, CHENNAI- 8. .. RESPONDENT IN T.C.2215/08 ENMAS ANDRITZ(P) LTD., 443, IV FLOOR, GUNA BUILDINGS ANNEXE, ANNA SALAI, TEYNAMPET, CHENNAI-18. .. RESPONDENT IN T.C.2441/08 These Tax Case Appeals are filed under section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras "C" Bench, Chennai dated 22.03.2004 made in ITA No. 1468/(Mds.)/2003. And against the order of the Commissioner of Income Tax Appeal (III), Chennai dated 23.05.2003 made in ITA.No.366/2002-03 A.III for Assessment Year 2002-2003 (In TCA.No.887/2004) And against the order of the Income Tax Appellate Tribunal (A) Bench dated 28.02.2006 made in ITA.No.2017/Madras/2004 against the order of the Commissioner of Income Tax Appeal (III) Chennai dated 18.03.2004 made in ITA.No.307/2003-2004/AIII for the Assessment year 1999-2003 (In TCA.No.2246/06) And against the order of the Income Tax Appellate Tribunal (A) Bench, dated 06.02.2006 made in ITA.No.190/Madras/2005 for the Assessment Year 2001-2002 and against the order of the Commissioner of Income Tax Appeal (III) in ITA.No.374/2004-2005 A-III for the Assessment Year 2001-2002 (In TCA.2248/2006) And against the order of the Appellate Tribunal A Bench Chennai dated 31.03.2006 made in ITA.No.167/MDS/2005 forthe Assessment Year 1999-2000 and against the order of the Commissioner of Income Tax Appeals VIII dated 25.11.2004 made in ITA.No.TR.No.91/2004-2005 (In TC.2277/2006) And against the order of the Income Tax Appellate Tribunal A Bench, Chennai dated 29.03.2006 made in ITA.No.3179/MDS/2004 for the Assessment Year 2001-2002 and against the order of the Commissioner of Income Tax Appeal XI dated 14.10.2004 made in ITA.TR.No.357/ITA.No.74/2004-2005 for the Assessment year 2001-2002 (In TC.No.2305/06) And against the order of the Income Tax Appellate Tribunal D Bench, Chennai dated 31.03.2006 made in ITA.No.207/MDS/2005 for the Assessment year 2001-2002 and against the order of the Commissioner of Income Tax Appeal III, Chennai dated 11.10.2004 made in ITA.No.356/2004-2005/A-III for the Assessment Year 2001-2002 (IN TC.No.2322/06) And against the order of the Appellate Tribunal A Bench Chennai https://hcservices.ecourts.gov.in/hcservices/ dated 17.03.2006 made in I.T.A.35/MDS/2005 for the Assessment year 2001-2002 and against the order of the Commissioner of Income Tax Appeal III, Chennai, dated 28.09.2004 made in ITA No.28/2004- 2005/A.III for the Assessment year 2001-2002 (In T.C.No.2323/06) And against the order of the Income Tax Appellate Tribunal D Bench Chennai, dated 15.03.2006 made in ITA.No.514(MDS)2004 and 1128 (MDS)2002 for the Assessment year 1997-98 and 1998-99 and against the order of the Commissioner of Income Tax Appeal III, dated 04.11.2003 in ITA.No.191/2003-2004/A.III for the Assessment year 1997-98 (in T.C.No.2341/06) And against the order of the Appellate Tribunal Bench A Chennai dated 21.04.2006 made in I.T.A.236/MDS/2005 for the Assessment year 2001-2002 and against the order of the Commissioner of Income Tax Appeal XI, Chennai, dated 22.11.2004 ITA TR.No.284/ITA.No.60/2004- 2005 (In T.C.No.2484/06) And against the order of the Income Tax Appellate Tribunal Bench B Chennai dated 13.03.2006 made in I.T.A.125(MDS)2005 for the Assessment year 2001-2002 and against the order of the Commissioner of Income Tax Appeal V, Chennai, dated 20.10.2004 in ITA No.209/2003- 2004 for the Assessment year 2001-2002 (in T.C.No.2495/06) And against the order of the Income Tax Appellate Tribunal Bench A Chennai dated 23.06.2006 made in I.T.A.389(MDS)2004 for the Assessment year 2001-2002 and against the order of the Commissioner of Income Tax Appeal III, Chennai, dated 03.12.2003 in ITA No.217/2003-2004/A.III for the Assessment year 2001-2002 (In T.C.No.2606/06) And against the order of the Income Tax Appellate Tribunal A Bench Chennai dated 23.06.2006 made in I.T.A.No.723(MDS)2004 and against the order of the Commissioner of Income Tax Appeal III, Chennai, dated 03.12.2003 made in ITA No.259/2003-2004/A.III for the Assessment year 2001-2002 (In T.C.No.2614/06) And against the order of the Income Tax Appellate Tribunal C Bench Chennai dated 01.06.2006 made in I.T.A.No.1476(MDS)/2005 for the Assessment year 1998-99 and against the order of the Commissioner of Income Tax (A1), Madurai order dated 06.04.2005 made in ITA No.227/04-05 for the Assessment year 1998-99 and against the order of the Deputy Commissioner of Income Tax Company Circle I, Madurai dated 15.09.2003 in PA.No.49001CN0065 for the Assessment year 1998-99 (In T.C.No.2615/06) And against the order of the Appellate Tribunal C Bench Chennai dated 17.03.2006 I.T.A.1622 & 1623 (MDS)/2004 for the Assessment year 1998-99, 1999-2000 and against the order of the Commissioner of Income Tax Appeal I, Madurai dated 19.03.2004 ITA No.6/2003-2004 for the Assessment year 1999-2000 and against the order of the Deputy Commissioner of Income Tax Company Circle I, Madurai dated 31.01.2003 https://hcservices.ecourts.gov.in/hcservices/ made in PA.47042-CY-1092 (In T.C.No.2635/06) And against the order of the Income Tax Appellate Tribunal Chennai A Bench dated 26.05.2006 made in I.T.A.2430/MDS/2003 for the Assessment year 2001-2002 and against the order of the Commissioner of Income Tax Appeal III, Chennai, order dated 27.05.2003 made in ITA No.371/02-03/A.III for the Assessment year 2001-2002 (In T.C.No.2656/06) And against the order of the Income Tax Appellate Tribunal A Bench Chennai dated 31.05.2006 made in I.T.A.1668/MDS/2003 for the Assessment year 1998-99 and against the order of the Commissioner of Income Tax Appeal III, Chennai, order dated 27.05.2002 made in ITA No.360/02-03/A.III for the Assessment year 1998-99 (In T.C.No.2706/06) And against the order of the Income Tax Appellate Tribunal Chennai C Bench dated 28.07.2006 made in I.T.A.363/MDS/2006 for the Assessment year 1999-2000 and against the order of the Commissioner of Income Tax Appeal II, Madurai, order dated 18.11.2005 made in ITA No.149/2005-2006 for the Assessment year 1999-2000 (In T.C.No.2707/06) And against the order of the Income Tax Appellate Tribunal Bench A Chennai dt.21.4.2006 made in I.T.A.2435/Mds/05 for the Assessment year 2003-04 and against the order of the Commissioner of Income Tax Appeal III dt.30.8.05 in ITA No.81 & 82/2005-06/A.111 for the Assessment year 2002-2003, 2003-04 (In T.C.No.2713/06) And against the order of the Income Tax Appellate Tribunal C Bench Chennai dt.2.6.06 made in I.T.A.No.1816/Mds/05 for the Assessment year 2001-02 and against the order of the Commissioner of Income Tax Appeal I, Madurai order Dt.30.5.05 in ITA.No.191/2004-05 for the Assessment year 2001-2002 (In T.C.No.2722/06) And against the order of the Income Tax Appellate Tribunal C Bench Chennai order dt.25.8.06 made in I.T.A.No.1245/Mds/06 for the Assessment year 1998-99 and against the order of the Commissioner of Income Tax II, Madurai Dt.31.3.06 in C.NO.114/11/CIT/II/2004-05 for the Assessment year 1998-99 (In T.C.No.10/07) And against the order of the Income Tax Appellate Tribunal Chennai "C" Bench (SMC) order dated 19.5.06 made in ITA 364/Mds/06 for the Assessment year 2004-05 and against the order of Commissioner of Income Tax Appeal II, Madurai order dated 14.11.05 ITA No.0141/05- 06 for the Assessment year 2004-05 (In TC NO.22/07) And against the order of the Income Tax Appellate Tribunal Bench B,Chennai Order dated 17.2.06 in ITA No.1160/Mds/03 for the Assessment year 1998-99 and against the order of the Commissioner of Income Tax Appeal III, Chennai dated 10.3.03 in ITA NO.306/02-03/A- III for the Assessment year 1998-1999 (In TC.112/07) https://hcservices.ecourts.gov.in/hcservices/ And against the order of the Income Tax Appellate Tribunal Chennai Bench "B" order dated 28.9.06 in ITA No.1763/Mds/2003 for the Assessment year 2001-2002 and against the order of the Commissioner of Income Tax Appeal V, Chennai dated 20.3.2006 in ITA NO.437/03-04 (In TC.269/07) And against the order of the Income Tax Appellate Tribunal Bench "B" Chennai dated 28.9.06 made in ITA.1763/Mds/06 for the Assessment year 2001-2002 and against the order of the Commissioner of Income Tax Appeal XII, Chennai dated 15.3.2006 in ITA No.161/2005-2006 for the Assessment year 2001-2002 (In TC.No.270/07) And against the order of the Income Tax Appellate Tribunal, Chennai "A" Bench dated 15.9.06 made in ITA 2005/Mds/2005 for the Assessment year 2001-2002 and against the order of the Commissioner of Income Tax Appeal XI, Chennai dated 17.6.2005 in ITA TR No.113/2004-2005 ITA No.257/2004-05 for the Assessment year 2001-2002 (In TC.382/07) And against the order of the Income Tax Appellate Tribunal Chennai "B" Bench dated 28.9.06 in ITA 1660/Mds/2005 for the Assessment year 2002-2003 and against the order of the Commissioner of Income Tax Appeal V, Chennai dated 24.12.04 in ITA No.280/2004-05 for the Assessment year 2002-2003 (In TC.400/07) And against the order of the Income Tax Appellate Tribunal Chennai Bench "A" dated 31.1.06 in ITA 241/Mds/03 for the Assessment year 1998-99 and against the order of the Commissioner of Income Tax Appeal III, Chennai order dated 3.10.2000 in ITA 62/2002-2003 A III for the Assessment year 1998-99. (In TC.410/07) And against the order of the Income Tax Appellate Tribunal "A" Bench, Chennai dated 31.3.06 in ITA 1709/Mds/03 for the Assessment year 1999-2000 and against the order of the Commissioner of Income Tax Appeal III, Chennai dated 27.5.03 in ITA 351/02-03 A III for the Assessment year 1999-2000 (In TC.485/07) And against the order of the Income Tax Appellate Tribunal "A" Bench Chennai dated 17.3.2006 in ITA 2078/Mds/2005 for the Assessment year 1999-2000 and against the order of the Commissioner of Income Tax Appeal III, Chennai dated 10.6.05 in ITA 506/2004-05 A III for the Assessment year 1999-2000. (In TC.488/07) And against the order of the Income Tax Appellate Tribunal "A" Bench Chennai dated 7.2.06 in ITA 835/Mds/05 for the Assessment year 1999-2000 and against the order of the Commissioner of Income Tax Appeal VIII chennai dated 24.1.05 in ITA TR No.72/04-05 for the Assessment year 1999-2000 (In TC.517/07) And against the order of the Income Tax Appellate Tribunal "B" Bench Chennai dated 22.9.06 in ITA 520/Mds/06 for the Assessment year 2001-2002 and against the order of the Commissioner of Income Tax https://hcservices.ecourts.gov.in/hcservices/ Appeal V, Chennai dated 28.11.05 in PA.295/2004-05 for the Assessment year 2001-2002 (In TC No.627/07) And against the order of the Income Tax Appellate Tribunal "B" Bench Chennai order dated 22.2.2006 in ITA No.1777/Mds/04, ITA 1756/Mds/04 for the Assessment year 1999-2000 and against the order of the Commissioner of Income Tax Appeal III Chennai dated 31.3.2004 made in ITA No.279/2003-04 for the Assessment year 1999-2000. (In TC.646 & 647/2007) And against the order of the Income Tax Appellate Tribunal "A" Bench Chennai dated 3.2.06 in ITA No.1301/Mds/03 for the Assessment year 2001-2002 and against the order of the Commissioner of Income Tax, Appeal III Chennai order dated 10.3.03 in ITA No.325/02-03 A III for the Assessment year 2001-2002 (In TC.684/07) And against the order of the Income Tax Appellate Tribunal "A" Bench Chennai dated 3.2.06 in ITA No.1163/Mds/03 for the Assessment year 2000-2001 and against the order of the Commissioner of Income Tax Appeal III Chennai order dated 10.3.2003 in ITA NO.326/02-03 A- III for the Assessment year 2000-01 (In TC.686/07) And against the order of the Income Tax Appellate Tribunal "A" Bench Chennai dated 29.11.06 in ITA No.1911/Mds/05 for the Assessment year 2003-2004 and against the order of the Commissioner of Income Tax Appeal III, Chennai order dated 18.4.05 in ITA No.463/2004-2005 A-III for the Assessment year 2003-2004 and against the order of the Assistant Commissioner of Income Tax Company Circle III dated 20.1.05 G.No.CXI 012/96-97 and against the order of the Commissioner of Income Tax Appeals-III, Chennai order dated 28.09.04 in ITA No.358/2004-05/A-III. (In TC.717/07) And against the order of the Income Tax Appellate Tribunal "C" Bench Chennai Order dated 24.5.06 made in ITA No.2623/Mds/04 for the Assessment year 2001-02 and against the order of the Commissioner, Income Tax Appeal I, Madurai order dated 26.7.04 in ITA No.279/03-04 for the Assessment year 2001-2002 (In TC.729/07) And against the order of the Income Tax Appellate Tribunal "C" Bench Chennai order dated 3.2.06 ITA No.817/05 for the Assessment year 1998-99 and against the order of Commissioner of Income Tax Appeal I, Madurai order dated 5.1.05 in ITA No.177/04-05 for the Assessment year 1998-99 (In TC.871/07) And against the order of the Income Tax Appellate Tribunal "B" Bench Chennai order dated 22.9.06 in ITA No.520/Mds/06 for the Assessment year 2001-02 and against the order of the Commissioner of Income Tax Appeal V dated 22.11.05 in ITA No.328/04-05 for the Assessment year 2001-2002 (In TC.949/07) And against the order of the Income Tax appellate Tribunal "B" Bench Chenai dated 28.9.06 in ITA 1305, 1306,1307/06 for the https://hcservices.ecourts.gov.in/hcservices/ Assessment year 1998-99,99-2000, 2000-01 respectively and against the order of the Commissioner of Income Tax Appeal III, Chennai order dated 6.2.2006 in ITA No.334,335,336/05-06 A-III for the Assessment year 98-99, 99-2000, 2000-01 respectively (In TC NO.1006/07 to 1008/07) And against the order of the Income Tax Appellate Tribunal "D" Bench Chennai dated 17.2.06 in ITA 2200/Mds/05 for the Assessment year 2002-03 and against the order of the Commissioner of Income Tax Appeal I, Coimbatore order dated 22.7.05 in ITA No.381/2004-05 for the Assessment year 2002-03 (In TC.1162/07) And against the order of the Income Tax Appellate Tribunal "A" Bench Chennai dated 8.5.07 in ITA NO.1012 to 1014/Mds/05 for the Assessment year 1999-2000, 2001-2002 respectively and against the order of the Commissioner of Income Tax Appeal VIII Chennai dated 11.2.05 in ITA.152,153,154/2004-05 for the Assessment year 1998-1999, 2001-2002, 1999-2000 in TCA NO.81 to 83 of 2008, in order dated 24.2.2005 ITA.TR.No.155/04-05 for the Assessment year 2001-2002 (In TCA.84/08) And against the order of the Income Tax Appellate Tribunal "A" Bench Chennai dated 3.2.2006 in ITA 3336/(Mds)/03 and against the order of the Commissioner of Income Tax Appeal XI, Chennai dated 18.10.2004 in ITA TR No.3332/ITA No. 63/2004-2005 for the assessment year 2000-2001 (In TCA No.244/08). And against the order of the Income Tax Appellate Tribunal "A" Bench Chennai dated 3.2.2006 in ITA 3436/(Mds)/03 and against the order of the Commissioner of Income Tax Appeal III, Chennai dated 28.09.2004 in ITA No.358/2004-05 A III for Assessment year 2003-2004 (In TCA No.245/08). And against the order of the Income Tax Appellate Tribunal "A" Bench Chennai dated 18.10.2007 in ITA 1476, 1570/(Mds)/06 for the assessment year 2002-2003 and against the order of the Commissioner of Income Tax Appeal III, Chennai order dated 13.3.2006 in ITA.224/05-06 A.III for the Assessment year 2002-2003 (In TC No.356/08). And against the order of the Income Tax Appellate Tribunal "B" Bench Chennai, dated 17.02.2006 in ITA 1690/Mds/03 and against the order of the Commissioner of Income Tax Appeal III Chennai order dated 27.5.2003 in ITA.12/03-04 A III for the Assessment year 2001- 2002. And against the order of the Income Tax Appellate Tribunal "A" Bench Chennai dated 16.10.2007 in ITA 2318/Mds/06 for the Assessment year 2003-2004 and against the order of the Commissioner of Income Tax Appeal XI Chennai order dated 5.7.2006 in ITA.TR.396/05-06 ITA.No.101/2005-2006 for the Assessment year 2003-2004. (In TC 543/08) https://hcservices.ecourts.gov.in/hcservices/ And against the order of the Income Tax Appellate Tribunal "A" Bench Chennai dated 11.1.2008 in ITA 925/Mds/07 for the Assessment year 2001-2002 and against the order of the Commissioner of Income Tax Appeal III,Chennai, dated 9.1.2007 in ITA.356/06-07/AIII/for the Assessment year 2001-2002. (In TC 1450/08) And against the order of the Income Tax Appellate Tribunal "D" Bench Chennai dated 30.5.2008 in ITA 2258/Mds/06 for the Assessment year 1998-1999 and against the order of the Commissioner of Income Tax Appeal II Madurai, dated 30.8.2006 in ITA.303/06-07 for the Assessment year 1998-1999 and against the order in ITA No.442/01-02 for the Assessment year 1998-99 (In TC 2126/08) And against the order of the Income Tax Appellate Tribunal "B" Bench Chennai dated 15.9.2006 in ITA 3334/Mds/04, 3298/Mds/04 and 230/Mds/2000 respectively for the Assessment year 2001-2002 and against the order of the Commissioner of Income Tax Appeal III Chennai dated 21.9.2004 in ITA.311/03-04, AIII in 2213/07 order dated 23.9.2004 in ITA No.362/03-04 (in TCA 2214/08) order dated 4.1.2003 in ITA 219/03-04 (In TCA 2215/08) for the Assessment year 2001-2002 And against the order of the Income Tax Appellate Tribunal, Madras, "A" Bench order dated 9.7.2008 in ITA 1626/Mds/07 for the Assessment year 2003-04 and against the order of the Commissioner of Income Tax Appeal III, order dated 29.3.2007 in ITA 638/2005-06/AIII for the Assessment year 2003-04 (In TC 2441/08) For appellant : Mrs.Pushya Sitaraman, in all TCs Senior Standing Counsel for IT assisted by Mr.J.Narayanasamy For respondents in : Mr.Venkatnarayanan for T.C.Nos.887/04, 2246, M/s.Subbaraya Aiyar 2277, 2323, 2606, 2615 2656 of 2006, 10, 410, 717, 1006 to 1008 of 2007, 81 to 84, 245, 356, 543 & 578 of 2008 For respondent in : Mr.N.Quadin Hoseyn TC.2305/06 For respondent in : Mr.V.S.Jayakumar T.C.2322/06 For respondent in : Mr.M.P.Senthilkumar T.C.2484 & 2495/06 for M/s Philip George & 244/08 For respondent in : Mr.R.Shankaranarayanan T.C.2614/06 For respondent in : Mr.N.Srinivasan T.C. 2707/06 https://hcservices.ecourts.gov.in/hcservices/ For respondent in : Mr.R.Srinivasan T.C.2722/06, 270 & 871/07 For respondent in : Ms.Dr.Anita Sumanth T.C.2706/06, 112, 382 & 405/07 For respondent in : Mr.T.N.Seetharaman T.C.269/07 For respondent in : Mr.S.A.Balasubramaniam T.C.400/07 For respondent in : Mr.A.S.Chandrasekaran T.C.517/07 For respondent in : Mr.J.Balachander T.C.684 & 729/09 For respondent in : Mr.C.Manishankar T.C.1162/07 COMMON JUDGMENT P.P.S.JANARTHANA RAJA,J. In this batch of cases, the questions raised for consideration are one and the same. Therefore, they are taken up together and disposed of by a common judgment. 2. The questions of law raised for consideration are as follows: "1. Whether on the facts and in the circumstances of the case, the Income Tax Tribunal is right in law in holding that the carry forward MAT credit available to the assessee was to be adjusted first before charging interest under Sections 234B and 234C? 2. Whether on the facts and in the circumstances of the case, the Income Tax Tribunal is right in law in holding that Rule 12(1)(a) which lays down that every company has to furnish a return of income in Form No.1 and schedule G to the said form clearly lays down the manner of computation of the total income and also the order in which TDS, Advance Tax and Tax credit under Section 115JAA should be given effect to, is against the intention of the legislation and hence not applicable? 3. Whether on the facts and in the circumstances of the case, the Income Tax Tribunal is right in law in not considering the fact that Form 1 had been substituted by the Income Tax (19th amendment) Rules 2001 with effect from https://hcservices.ecourts.gov.in/hcservices/ 17.08.2001 and as such interest chargeable under Section 234B or 234C should be first deducted and thereafter tax credit under Section 115JAA should be given?" 3. In order to appreciate the bone of contention, it would be suffice to state the facts relevant to one of the assessee's viz., M/s Chemplast Sanmar Limited, Chennai case in T.C.(A) No.887 of 2004, which are as follows: The assessee is a company engaged in manufacture and sale of PVC Resins, Caustic Soda, Chioromethane, refringerant Gases, Promotion of new-ventures, undertakings companies and operation of ships etc. The relevant assessment year is 2002-2003 and the corresponding accounting year ended on 31.03.2002. The asessee filed its return of income on 31.10.2002 admitting a taxable income of Rs.32,90,54,720/- and the tax payable thereon was determined at Rs.11,76,77,896/- including the interest under Section 234B and 234C of the Act. The assessing officer processed the return under Section 143(1) by intimation dated 21.02.2003 accepting the income returned. While computing the tax, the assessing officer has not adjusted the carry forward MAT credit available to the assessee before charging interest under Section 234B of Rs.1,17,64,830/- and under Section 234C of Rs.56,31,754/- and consequently raised a tax demand of Rs.1,64,86,519/- and further, the assessing officer had not given credit for TDS of Rs.4,49,527/-. Aggrieved by that order, the assessee has filed an appeal before the Commissioner of Income Tax (Appeals) contending that the provision of Section 115JAA had to be applied first as it is a tax credit or prepaid taxes with the Government available to the assessee for set off, before applying the provisions of Section 234 B and 234 C of the Act. The Commissioner, while dismissing the appeal, held as follows: "The appellant's submissions have been considered. The order of priority of adjustment of