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Income Tax Appellate Tribunal, DELHI BENCH ‘E’ NEW DLEHI
Before: SHRI ANIL CHATURVEDI & SHRI N.K. CHOUDHRY
This appeal has been preferred by the Revenue Department against the order dated 24.08.2018, impugned herein, passed by the learned Commissioner of Income-tax (Appeals)-27, New Delhi (in short “Ld. Commissioner”) u/s. 250 of the Income-tax Act, 1961 (in short ‘the Act’) for the assessment years 2016-17.
In this case, the Assessee by filing its return of income on dated 17.10.2016, declared an income of Rs.89,98,21,770/-, which was processed u/s. 143(1) of the Act and accordingly, an intimation u/s. 143(1) dated 09.06.2017 was sent to the Assessee, whereby the income declared by the Assessee was accepted. However, the credit of tax paid u/s. 115JD of the Act was reduced from 6,70,15,431/- to Rs.5,80,92,435/- on the ground that surcharge and education cess are not adjustable while giving the MAT credit of earlier years.
The Assessee being aggrieved challenged the said adjustment made by the Assessing Officer, before the ld. Commissioner who vide impugned order allowed the appeal of the Assessee by holding as under:
The Ground Nos. 1 to 2.2 pertain to MAT credit of 5. Surcharge and Education Cess not allowed by AO to be adjusted during the year under consideration. During the appellate proceedings, appellant has explained the facts, reproduced the legal provisions of relevant sections and relied on the recent judgment of Hon'ble ITAT Delhi in the case of Consolidated Securities Ltd. vs ACIT in dated 26.07.2018 wherein it is held that Surcharge and Education Cess ought to be allowed in total from the amount of tax computed after loading it with the amount of Surcharge or Education Cess. The appellant has also relied on several other judgments of different Courts as mentioned in its submissions wherein it is held that the income-tax includes Surcharge and Education Cess.
5.1 I have considered the facts of the issue and submissions of appellant. The issue that MAT credit u/s 115JAA r.w. section 115JB of the Act on account of Surcharge and Education Cess should be allowed or not, has been dealt with by Hon'ble Calcutta High Court in the case of M/s. Srei Infrastructure Finance Ltd wherein identical issue emerged and Hon'ble Court held that MAT credit u/s 115JAA brought forward from earlier years is to be set off against tax on total income after taking into account the amount of Surcharge and Education Cess. Hon'ble ITAT Delhi has also followed the ratio of Hon'ble Court in its decision in the case of Consolidated Securities Ltd. vs ACIT (supra) holding that the Surcharge and Education Cess has to be included while giving credit of the total tax amount paid by assessee. Since the issue is covered by the decisions of Hon'ble High Court of Calcutta and ITAT Delhi, the stand taken by AO of not giving credit of the amount of Surcharge and Education Cess against the income computed during the year under consideration as per provision of section 115JD of the Act, is not justified. I, therefore, direct the AO to allow the said credit on account of Surcharge and Education Cess while computing the income under MAT provisions for the year under consideration. The ground taken by appellant is allowed.”
The Revenue Department being aggrieved, preferred the instant appeal.
The ld. DR in support of its case, emphasised that the ld. Commissioner decided the issue qua surcharge and education cess as involved in the instant case on the basis of the judgment of jurisdictional Tribunal in the case of Consolidated Securities Ltd. vs. ACIT (ITA No. 3739/Del/2015) dated 26.07.2018 and the judgment passed by Hon’ble Calcutta High Court in the case of Srei Infrastructure Finance Ltd., whereas it is a fact that the aforesaid judgments have been passed in the case of the companies and not in individual case, as involved in the instant case. Therefore, the said judgments are not applicable to the instant case.
On the contrary, ld. AR submitted that the spirit of the provisions have to be taken into consideration, but not the persons.
We have given thoughtful consideration to the facts and circumstances of the case and observe that the ld. Commissioner not only considered the judgments referred to above, but also perused the legal provisions of the relevant sections and the factual aspects of the case and then only decided the issue qua credit of surcharge and education cess in the income of the Assessee. Even otherwise, Hon’ble Apex Court in the case of CIT vs. K. Srinivasan (1972) 83 ITR 346(SC) clearly held that income tax would include surcharge and additional surcharge. Even otherwise we do not find any reason and/or material to contradict the findings of the ld. Commissioner and hence considering the spirit of the provisions of Act as applicable to the instant case, are inclined not to interfere in the impugned order.
In the result, the appeal filed by the Revenue stands dismissed.
Order pronounced in the open court on 04/01/2023.