IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 30.04.2009 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN and THE HONOURABLE MR.JUSTICE M.M.SUNDRESH Tax Case (Appeal)No.875 of 2007 Commissioner of Income Tax Chennai ... Appellant v. M/s.Anusha Investments Ltd., Jayalakshmi Estates 24 Haddows Road Chennai – 96. ... Respondent Tax Case Appeal filed under section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai, dated 3.3.2006 passed in ITA No.1162/Mds/2003 relating to the assessment year 1998-99 against ITA NO.302/2002-03/A- III dated 10.3.2003 on the file of the office of the Commissioner of Income Tax (Appeals)-III Chennai-34 against GIR No.AX4-437/1998-99 dated 9.12.2002 on the file of the Deputy Commissioner of Income Tax, Company Circle I (1) Chennai. For appellant :Mrs.Pushya Sitaraman For Respondent:Mr.R.Venkatnarayanan for M/s.Subbaraya Aiyar 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 'A' Bench, Chennai, dated 3.2.2006 passed in ITA No.1162 /Mds/2003 relating to the assessment year 1998-99. 2. The material facts as culled out from the statement of facts in the memorandum of grounds of appeal are stated below:- The assessee filed a return of income for assessment year 1998- 99. For the preceding assessment year, the assessee had paid minimum https://hcservices.ecourts.gov.in/hcservices/ alternate tax (MAT) under Section 115J and the MAT credit was carried under Section 115JAA to be set off against the tax payable. The assessing officer while completing the proceedings under Section 154 rectified his order and accordingly gave MAT credit after charging interest under Section 234B and 234C. Aggrieved by the same, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), who held that MAT credit is nothing but the assessee's credit lying with the Government available to the assessee for adjustment against the tax due in the subsequent years on normally computed income, and the tax credit brought forward is to be automatically adjusted against by virtue of the provisions of Section 115JAA(4). The revenue filed a Second Appeal to 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 for the assessment year 2002-2003. Aggrieved by the order of the Income-tax Appellate Tribunal, the appellant 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 setting off the tax deducted at source and advance tax paid? 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. Whether the interest under Section 234B and 234C had to be calculated after giving the MAT credit against the tax payable on the basis of normal computation? 3. We heard the arguments of the learned counsel for the appellant and the respondent 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 https://hcservices.ecourts.gov.in/hcservices/ 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 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. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar. krr https://hcservices.ecourts.gov.in/hcservices/ To 1. The Commissioner of Income Tax Chennai 2. The Assistant Registrar, Income Tax Appellate Tribunal, Chennai 'A' Bench, Chennai. 3. The Commissioner of Income-Tax(Appeals)-III Chennai. 4. The Deputy Commissioner of Income Tax, Company Circle I(1) Chennai. + 1 CC To Mr.Pushya Sitaraman, Advocate SR NO.19920 T.C.(A)No.875 of 2007 KLT {CO} TP/4.6.2009. https://hcservices.ecourts.gov.in/hcservices/