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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI INTURI RAMA RAO & SHRI S.S. VISWANETHRA RAVI
आदेश / ORDER
PER S.S. VISWANETHRA RAVI, JM :
This appeal by the assessee against the order dated 10-05-2019 passed by the Commissioner of Income Tax (Appeals)-1, Pune [‘CIT(A)’] for assessment year 2016-17.
The assessee raised three grounds of appeal amongst which the only issue emanates for our consideration is as to whether the CIT(A) is justified in confirming the order of AO in not granting minimum alternate tax credit u/s. 115JAA of the Act in the facts and circumstances of the case.
3. Heard both the parties and perused the material available on record. We note that the assessee claimed MAT credit utilized to an extent of Rs.33,41,567/- u/s. 115JAA of the Act, the CPC, Bangalore allowed MAT credit to an extent of Rs.30,73,272/- and disallowed Rs.2,68,295/-. The contention of ld. AR, Shri R.S. Abhyankar is that tax includes surcharge and cess. The assessee is entitled to entire credit as claimed to an extent of Rs.33,41,567/- and placed reliance on the decision of Hon’ble Supreme Court in the case of K. Srinivasan reported in 83 ITR 346 (SC). The CIT(A) held that the education cess is not included in income tax and held the view of AO is correct in not allowing MAT credit in respect of education cess. We note that the tax liabilities under normal provisions as well as under minimum alternate tax provisions are calculated with surcharge and cess. We find Sub-section (1) of Section 2 of Finance Act, 2015 provides that income tax shall be increased by surcharge. Further, Sub-section (11) of Section 2 of Finance Act, 2015 provides that the amount of income tax as increased by surcharge shall be further increased by education cess. Further, the amount of income tax along with surcharge, education cess is further increased by additional surcharge in the form of secondary and higher education cess under Sub-section (12) of section 2 of Finance Act, 2015. Therefore, in our opinion, income tax includes surcharge, education cess and additional surcharge in the form of secondary and higher education cess and there cannot be denial of utilization of credit u/s. 115JAA of the Act towards surcharge and education cess when the assessee paid tax including the said surcharge and education cess. Therefore, the assessee is entitled to claim minimum alternate tax credit including surcharge and education cess.
4. On perusal of the statement of computation, we note that the assessee claimed minimum alternate tax credit of Rs.33,41,567/- but the AO denied to grant to an extent of Rs.2,68,295/- (Rs.1,70,968/- + Rs.97,327/-) being surcharge and education cess, respectively, in our opinion, is not justified. Therefore, the AO is directed to allow set off credit including surcharge and education cess. Thus, the addition made by the AO and as confirmed by the CIT(A) is deleted.
In the result, the appeal of assessee is allowed.
Order pronounced in the open court on 21st July, 2022.