IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 27.04.2009 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN and THE HONOURABLE MR.JUSTICE M.M.SUNDRESH Tax Case (Appeal)Nos.1143 to 1145 of 2008 Commissioner of Income Tax Chennai .. Appellant in all T.Cs. v. M/s.Tulsyan NEC Limited 147, Greams Road Chennai – 600 006. .. Respondent in all T.Cs. Tax Case Appeals in T.C.(A) Nos.1143 to 1145 of 2008 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 9.4.2007 passed in ITA Nos.1844, 1845 and 1846/Mds/2005 relating to the assessment years 1998-99, 1999-2000 and 2000-2001 respectively.Against the order of Commissioner of Income Tax Appeals(XI)Madras-34,dated.26.5.2005 in ITA.TR.Nos.75 & 74-04-05, 341/03-04 and ITA.Nos.215 and 218/04-05; 217/2004-05 and arising out of the rectification order of Assistant Commissioner of Income Tax,Company Circle III(2) Madras-34; dt.8.3.2004; & 3.12.2003 in No.CO.Cir.III(2)/32134-T/2000-01; CO.Cir.III(2) 32134-T-99-00 and Co.Cir.III(2)/32134-T/98-99 and against the revision order of Asst.Commissioner of Income Tax,Company Circle III(2) Madras-34; dt.19.6.2002 in No.CO.Cir.III(2).32134/98-99; and arising out of the Assessment order of Joint Commissioner of Income Tax Special Range VI, Madras-34,dt.30.3.2001 in P.A.No.23-T. For appellant : Mrs.Pushya Sitaraman JUDGMENT (Judgment of the Court was delivered by K.RAVIRAJA PANDIAN,J.) The appeals in T.C.(A) Nos.143 ato 1145 of 2008 have been preferred by the revenue against the order of the Income Tax Appellate Tribunal, Madras 'C' Bench, Chennai,dated 9.4.2007 passed in ITA Nos.1844, 1845 and 1846/Mds/2005 relating to the https://hcservices.ecourts.gov.in/hcservices/ assessment years 1998-99, 1999-2000 and 2000-2001 respectively . 2. The issue involved in all the appeals is one and the same. The material facts as culled out from the statement of facts in the memorandum of grounds of appeal are stated below:- The assessee filed its return of income for the assessment years 1998-99 to 2000-2001. Subsequently the assessing officer considered the interest under Section 234B and 234C prior to MAT credit and thus completed the assessment. Aggrieved by the order of the assessing officer, the assessee filed appeal before the Commissioner of Income Tax (Appeals), who allowed the appeal in favour of the assessee for the above stated assessment years by relying upon his own order in the assessee's own case in I.T.A.No.217/2004-2005 dated 26.5.2005 whereby it was held that interest under Section 234B and 234C is to be charged only after adjustment of tax creditable. The assessee filed Second Appeal before the Income Tax Appellate Tribunal, which allowed the appeal in favour of the assessee following its own order in the case of Chemplast Sanmar Limited reported in (2004) 83 TTJ (Chennai) 427 and the decision of the Chandigarh Bench in the case of Philips India Limited reported in (2004) 93 TTJ (Chd) 767. Aggrieved by the same, the revenue has 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 the MAT credit is to be set off from the tax payable before levying interest under Section 2234B 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 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 https://hcservices.ecourts.gov.in/hcservices/ 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 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 these appeals are identical to the one considered by the Division Bench. Following the Division Bench Judgment stated supra, the appeals are dismissed since the questions of law have already been answered in favour of the assessee. Sd/- Asst. Registrar / True Copy / Sub.Asst Registrar usk To 1. The Commissioner of Income Tax,Chennai 2. The Income Tax Appellate Tribunal, Chennai 'C' Bench, Chennai. 3. Asst.Commissioner of Income Tax, Company Circle III(2), Chennai. https://hcservices.ecourts.gov.in/hcservices/ 4. Additional/Joint Director of Income Tax, Range-III, Chennai -34. 5. Commissioner of Income Tax Appeals(XI), 121,Mahatma Gandhi Salai, Chennai-34. 6. The Asst. Registrar,Income Tax Appellate Tribunal, Rajaji Bhavan,Besant Nagar, Chennai-90 + 1 cc to M/s.Pushya Sitaraman,Advocate,SR.18175 SJ(CO) EM/4.6.09 T.C.(A)Nos.1143 to 1145 of 2008 https://hcservices.ecourts.gov.in/hcservices/