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Income Tax Appellate Tribunal, VIRTUAL COURT
Before: SHRI M.BALAGANESH, AM & SHRI RAM LAL NEGI, JM
आदेश / O R D E R PER M. BALAGANESH (A.M): This appeal in A.Y.2012-13 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-21, Mumbai in appeal No.CIT(A)-21/DCIT-13(1)(1)/IT-94/2015-16 dated 25/05/2017 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 28/02/2015 by the ld. Dy. Commissioner of Income Tax, Circle- 13(1)(1), Mumbai (hereinafter referred to as ld. AO).
M/s. Netmagic IT Services P. Ltd.,
The only effective issue to be decided in this appeal is with regard to the set off of MAT credit u/s.115JAA of the Act.
We have heard rival submissions and perused the materials available on record. We find that assessee is engaged in the business of providing remote infrastructure management and other services to its customers. The return of income for the A.Y.2012-13 was filed by the assessee on 29/09/2012 declaring total income of Rs.1,97,52,514/- under normal provisions of the Act and Rs.2,26,04,473/- u/s.115JB of the Act. The assessment was completed accepting the returned income of the assessee. However, while computing the tax liability, i.e. in the tax computation sheet, the ld. AO calculated MAT credit u/s.115JAA of the Act at Rs.17,44,045/- as against Rs.18,86,185/- claimed by the assessee. Consequently, interest u/s.234C of the Act was also charged by the ld. AO for the deficit in tax. This difference in figure arose because of the fact the assessee computed the difference in tax payable under normal provisions of the Act and tax payable u/s.115JB of the Act after including surcharge and education cess to be part of the tax. Whereas the ld. AO computed the same ignoring surcharge and education cess from the tax portion.
4. To address the dispute before us effectively, the following table would be pertinent:- Sr. Particulars Amount (Rs) Amount (Rs) No. 1. Tax under normal provisions 59,25,873 2. Add: Surcharge and education cess 4,82,958 3. 64,08,831 Tax under normal provisions including surcharge and cess
M/s. Netmagic IT Services P. Ltd.,
41,81,828 Tax as per MAT 5. 3,40,818 Add: Surcharge and education cess 6. 45,22,646 Tax as per MAT including surcharge and cess 7. Tax (Higher of Sr. No. 3 and 6) 64,08,831
Sr. Particulars As per return of As per Assessing No. Income Officer 10. Tax (Sr. No. 7) 64,08,831 64,08,831 11. Less: MAT credit 18,86,185 17,44,045 (Sr. No. 3-6) (Sr. No. 1-4) 12. Total tax 45,22,646 46,64,786
As per Section 115JAA(5), “set off in respect of brought forward MAT credit shall be allowed for any assessment year to the extent of the difference between the tax on total income and the tax which would have been payable under the provisions of Section 115JB of the Act for that assessment year.”
We find that the Hon‟ble Supreme Court in the case of CIT vs. K. Srinivasan reported in 83 ITR 346 had categorically held that the term “tax” includes surcharge. The term “education cess” is a recent phenomenon introduced in the statute which is prevalent only in the last two decades. Hence, we hold that for the purpose of computation of MAT
M/s. Netmagic IT Services P. Ltd., credit u/s.115JAA of the Act, tax portion has to be inclusive of surcharge and education cess and accordingly, the computation made by the assessee in its return of income in respect of MAT credit is correct.
In any case, we find that assessee being a company had filed its return of income in ITR-6 (i.e. prescribed form) under schedule for MAT credit (Schedule MATC), the assessee is precluded from filling up any figure as they are automatically picked from yet another schedule in the same ITR form i.e. 1d of Part-BTT1 and 5 of part-B-TT1, wherein the figures mentioned thereon, represent tax payable under normal provisions and u/s.115JB of the Act respectively, which is admittedly inclusive of surcharge and education cess. Hence, there is absolutely no scope for ignoring surcharge and education cess for the purpose of computing MAT credit u/s.115JAA of the Act. It is a well known fact that the ITR return form is a form prescribed by CBDT and the revenue is bound to follow the same.
In view of the aforesaid observations, we find lot of force in the argument advanced by the ld. AR and accordingly, allow the grounds raised by the assessee. With regard to MAT credit u/s.115JAA of the Act and direct the ld. AO to accept the working given by the assessee as per the return of income.
M/s. Netmagic IT Services P. Ltd.,
The grounds raised with regard to charging of interest u/s.234C of the Act should always be on returned income and not on assessed income as it is a settled law. Accordingly, the ground No.2 raised by the assessee is also allowed.
In the result, appeal of the assessee is allowed.
Order pronounced on 23/11/2020 in the open Court.