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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI C.N. PRASAD & SHRI S. RIFAUR RAHMAN
The aforesaid appeal has been filed by the Revenue challenging the order dated 4th January 2019, passed by the learned Commissioner (Appeals)–3, Mumbai, for the assessment year 2008–09.
Ground no.1, raised by the assessee is reproduced below:–
“On the facts and circumstances of the case, the CIT(A) has erred in not adjudicating the said Ground raised by the Appellant to grant Tax credit in respect of tax paid as per the provisions of se4ction 115JAA of the Act i.e., MAT amounting to ` 21,43,324/–
2 Tata Communication Ltd. (Assessment Year : 2008–09) pertaining to erstwhile VSNL Broadband Ltd. (which company stands merged with the Appellant) in earlier assessment year.”
Brief facts are, the assessee company is in the business of providing international telecommunication services, national long distance service within India, internet related services, Inmarsat, and other value added services. The assessee company filed its return of income electronically on 29th September 2008, declaring total income of ` 216,72,38,850. Subsequently, the assessee filed revised return of income electronically on 31st March 2010, declaring total income of ` 189,59,77,130. In the revised return of income, the assessee had claimed Minimum Alternate Tax (MAT) credit under section 115JAA of the Act aggregating to ` 21,43,324 which had been paid by the erstwhile VBL (since amalgamated into assessee’s company w.e.f. 1st March 2007 for the assessment year 2007–08). The assessment was completed on 25th October 2012, under section 143(3) r/w section 144(C) of the Income Tax Act, 1961 (for short "the Act") assessing total income of ` 839,05,13,020 under the normal provisions of the Act. The Assessing Officer in his order mentioned that “MAT credit for the erstwhile VBL of ` 21,43,324 to be given after due verification of the assessee’s submissions dated 17.08.2011”. Subsequently, the assessment was rectified under section 154 of the Act vide order dated 8th March 2017, determining the total income at ` 751,65,19,320.
3 Tata Communication Ltd. (Assessment Year : 2008–09)
However, since no relief was granted to the assessee insofar as MAT credit is concerned, being aggrieved, the assessee went in appeal before the first appellate authority contesting the issue on non– granting of MAT credit.
The learned Commissioner (Appeals), however, has not mentioned any reason for not adjudicating the issue of non–granting of MAT credit on merit. Therefore, the assessee being still aggrieved is in further appeal before the Tribunal.
Before us, the leaned Counsel for the assessee submitted before us that the issue relating to non–grant of MAT credit is covered by the decision of the Co–ordinate Bench in Ambuja Cements Ltd. v/s DCIT, ITA no.3643/Mum./2018, dated 5th September 2019. A copy of this order is placed on record.
The learned Departmental Representative submitted that the learned Commissioner (Appeals) has not adjudicated the issue, hence, he prayed that the issue may be restored to the file of the learned Commissioner (Appeals) to adjudicate the issue on merit.
Considered the rival submissions and on a perusal of the material on record, we find that the issue before us is mutatis mutandis identical to the issue decided by a Co-ordinate bench of this Tribunal in 4 Tata Communication Ltd. (Assessment Year : 2008–09)
Ambuja Cements Ltd. (supra) for the assessment year 2007–08 wherein the Tribunal has decided the issue in favour of the assessee by observing as follows:-
“10. Having held so, it is now necessary to examine whether the order giving effect to passed by the Assessing Officer can be held to be erroneous and prejudicial to the interests of Revenue so as to enable learned CIT to exercise power under section 263 of the Act. Undisputedly, learned CIT has exercised the power under section 263 of the Act on the issue of allowance of MAT credit of ` 6,99,46,873, relating to Ambuja Cement Eastern Ltd. which amalgamated with the assessee company. It is the reasoning of learned CIT that the provisions of section 115JAA of the Act allows set off of MAT credit only in respect of company in whose case such MAT credit has arisen. According to her, carry forward of MAT credit of amalgamating company cannot be allowed in case of amalgamated company. On a reading of the provisions of section 115JAA of the Act, we do not find any such restriction with regard to allowance of MAT credit of an amalgamating company at the hands of the amalgamated company. Rather, a plain reading of the aforesaid provision reveals that MAT credit is allowed to be carried forward for a specific period. In case of Skol Breweries Ltd. (supra), the Tribunal, Mumbai Bench, while deciding identical issue has held that carried forward MAT credit of the amalgamating company can be claimed by the amalgamated company. Similar view has been expressed by the Tribunal, Ahmedabad Bench, in Adani Gas Ltd. (supra). If we consider the issue in the light of the ratio laid down in the aforesaid decisions, there cannot be two opinions that the assessee is entitled to claim carried forward MAT credit of the amalgamating company Ambuja Cement Eastern Ltd. It is necessary to observe, while completing the assessment in case of the amalgamating company Ambuja Cement Eastern Ltd. in Assessment Year 2006-07, the Assessing Officer has also concluded that carried forward MAT credit of Ambuja Cement Eastern Ltd. would be available in the hands of the present assessee. Keeping in view the assessment order passed in case of amalgamating company as well as the decisions referred to above, the principle which emerges is, the carried forward MAT credit of amalgamating company can be taken credit of by amalgamated company. Viewed in the aforesaid perspective, the decision of the Assessing Officer in allowing set off of carried forward MAT credit of ` 6,99,46,873, at the hands of the assessee cannot be considered to be erroneous. Therefore, one
5 Tata Communication Ltd. (Assessment Year : 2008–09) of the conditions of section 263 of the Act is not satisfied. That being the case, the exercise of power under section 263 of the Act to revise such an order is invalid. Accordingly, we quash the impugned order passed by the learned CIT. Grounds no.1 and 2 are dismissed and ground no.3 is allowed.” [Emphasis supplied by us]
Respectfully following the aforesaid Co–ordinate Bench decision of the Tribunal, we hold that the Assessing Officer ought to have allowed the claim of assessee in carrying forward MAT credit of amalgamating company. Consequently, we set aside the impugned order of the Assessing Officer and direct him to allow assessee’s claim. Thus, ground no.1, is allowed.
Grounds no.2 and 3, being inter–connected to each other, therefore, both the grounds are taken up together. These grounds are reproduced below:– “2. On the facts and in circumstances of the case and in law, the CIT(A) has erred in not specifically directing the Assessing Officer to recomputed interest u/s 234D after excluding the interest paid on refund issued u/s 143(1) of the Act as decided in the Appellant’s own case.
3. In the facts and in circumstances of the case and in law, the Hon’ble CIT(A) has erred in not specifically directing the Assessing Officer to recompute interest u/s 244A of the Act payable on the refund arrived at after excluding interest granted in the earlier orders, as decided in the Appellant’s own case.”
Considered rival submissions and perused the material on record. We find that the issue in dispute has been decided against the 6 Tata Communication Ltd. (Assessment Year : 2008–09)
assessee by the Co–ordinate Bench decision of this Tribunal in assessee’s own case for the assessment year 2001–02 in Mum./2005, etc., order dated 8th July 2015, a copy of which is placed on record, wherein the Tribunal following the decision of the Hon'ble Jurisdictional High Court in CIT v/s Indian Oil Corporation Ltd., 210 Taxmann 466 (Bom.) has rejected the claim of the assessee. However, the assessee preferred an alternative plea that the computation of interest under section 234D of the Act is incurred and, therefore, the interest under section 244A of the Act should be excluded. After considering the decision in case of sister concern of the assessee in Tata Communication Ltd. and Tata Power Ltd., the issue was restored to the file of the Assessing Officer with the direction that interest under section 244A needs to be excluded while computing interest under section 234D. Facts of this issue being similar in the current year as well, consequently, we deem it fit to set aside the impugned order of the learned Commissioner (Appeals) and restore the issue to the file of the Assessing Officer to follow the above direction. It is also pertinent to mention here that the assessee, by way of Exhibit–9, has also filed calculation of interest under section 244A of the Act and as a matter of convenience the same is extracted below:–
7 Tata Communication Ltd. (Assessment Year : 2008–09)
TATA COMMUNICATIONS LIMITED – A.Y. 2008–09 Total assessed income as 7,51,65,19,317 7,51,65,19,317 per order u/s 154 dtd. Less: Depreciation on lease 1,85,69,361 1,85,69,361 premium paid to MMRDA 7,49,79,49,956 7,49,79,49,956 Tax @ 20% 3,67,66,003 73,53,201 3,67,66,003 73,53,201 on LTCG Tax @ 30% on the 7,46,11,83,953 2,23,83,56,187 7,46,11,83,953 2,23,83,55,187 balance total income Total Tax 2,24,57,08,387 2,24,57,08,387 Less: Credit u/s 115JAA OF TAX PAID IN EARLIER YEARS BY ERSTWHILE vsnl – 21,43,324 Broadbank Ltd. (now merged with the assessee) A.Y. 2007– 08 2,24,57,08,387 2,24,35,65,063 Surcharge @ 22,45,70,839 22,43,56,506 10% Total Tax including 2,47,02,79,226 2,46,79,21,570 surcharge Education 7,41,08,377 7,40,37,647 Cess @ 3% Total Tax and 2,54,43,87,603 2,54,19,59,217 Surcharge and Cess Less: TDS – Cr thereon 2,12,73,90,045 2,31,59,75,721 u/s 199 41,69,97,558 22,59,83,496 Less: Relief 2,35,01,202 2,35,01,202 u/s 90/91 39,34,96,356 20,24,82,294
8 Tata Communication Ltd. (Assessment Year : 2008–09)
Less: 1,05,00,00,000 1,05,00,00,000 Advance Tax paid (65,65,03,644) (84,75,17,706) Interest Tax Add: Refund as per intimation u/s 143(1) 74,40,63,870 7,97,21,124 66,43,42,746 74,40,63,870 dt. 22.03. 2010 (Re– ceived on 31.03.2011) 8,75,60,226 (18,31,74,960) (10,34,53,836) Interest u/s 244A 01.04.2008 to 31.03. 2011 @ 65,65,03,644 11,81,70,656 84,75,17,706 15,25,53,187 0.5% pm for 36 months April 2011 @ 0.5% pm for 18,31,74,960 9,15,875 1 month (3,06,10,430) (25,69,22,898)
The Assessing Officer is further directed to verify the above calculation and while deciding the issue proper opportunity of hearing may be provided to the assessee. Accordingly, grounds no.2 and 3, raised are allowed for statistical purposes in terms indicated above.
In the result, appeal stands partly allowed. Order pronounced in the open court on 24.03.2021