DCIT LTU-1, CHENNAI vs. WHEELS INDIA LIMITED, CHENNAI

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ITA 2597/CHNY/2017Status: DisposedITAT Chennai22 October 2019AY 2012-134 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that surcharge and education cess are part of income-tax, and therefore, MAT credit should be adjusted against the total tax liability including these components. The Revenue's appeal was dismissed.

What were the facts?

The assessee sought rectification for MAT credit, which the AO granted but excluded surcharge and education cess. The CIT(A) allowed the full MAT credit, following a previous ITAT decision.

What were the issues?

Whether MAT credit under Section 115JAA should be adjusted against income-tax including surcharge and education cess.

Which sections of the Income-tax Act were involved?

Section 115JAA

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI S. JAYARAMAN

Hearing: 25.07.2019Pronounced: 22.10.2019

आदेश / O R D E R

PER S. JAYARAMAN, ACCOUNTANT MEMBER:

1.

The Revenue filed this appeal against the order of the learned Commissioner of Income Tax (Appeals)-17, Chennai in dated 24.08.2017 for the assessment year 2012-13.

2.

M/s. Wheels India Limited, the assessee, is engaged in the manufacture of mainly automobile components. The AO passed order U/s.143(3) dated 31.03.2015. The assessee filed petition

U/s.154 dated 20.02.2015, seeking rectification, inter-alia, that the AO omitted to consider the carry forward of the correct amount of MAT credit available to the assessee as per provisions of Section 115JAA(3A). In the order passed U/s.154 dated 05.05.2015, the AO relying on the decision of the Hon’ble Delhi Tribunal gave credit for MAT but excluded surcharge and education cess. Aggrieved against that order, the assessee filed an appeal before the CIT(A). The ld.CIT(A) following the decision of the jurisdictional Bench of the ITAT in the case of Saint Gobain Gyproc India Ltd., in dated 03.02.2016, allowed the assessee’s appeal.

3.

Aggrieved against that order, the Revenue filed this appeal with the following grounds:- “

1. The order of the learned CIT(A) is contrary to law and facts and circumstances of the case.

2. The learned CIT(A) has erred in allowing the MAT credit u/s 115JAA to adjust from the tax on total income payable before applying surcharge and education cess which is contradictory to the decision of Hon’ble High court in the case of M/s. Srei Infrastructure Finance Ltd Vs Deputy Commissioner of Income Tax (395 ITR 291) (Kol) and also, Hon’ble ITAT Delhi decision in the case of M/s. Richa Global Exports Pvt. Ltd. in dated 31.08.2012.

3. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(A) may be set aside and that of the Assessing Officer be restored.”

4.

The ld.DR presented the case on the grounds of lines of appeal and pleaded to set aside the order of CIT(A) and restore the order of AO. Per contra, the ld.AR submitted that since the ld.CIT(A) followed the order of this Tribunal, the Revenue’s appeal may be dismissed. Further, he relied on the decision of this Tribunal passed in the case of M/s. Saint Gobain Glass India Limited in for the assessment year 2011-12, dated 31.05.2018.

5.

We heard the rival submissions. The relevant portion of the order of the ITAT dated 31.05.2018, supra, is extracted as under: “3. On the contrary, Sh. R. Vijayaraghavan, the Ld.counsel for the assessee, submitted that surcharge and education cess are part of income-tax in view of Article 271 of the Constitution of India. Placing reliance on the judgment of Apex Court in CIT v. K. Srinivasan (1972) 83 ITR 346, the Ld.counsel submitted that income-tax includes surcharge and education cess. Therefore, when the income-tax was adjusted, the surcharge and education cess also need to be adjusted. Hence, according to the Ld. counsel, the CIT(Appeals) by rightly following the order of this Tribunal in Saint Gobain Gyproc India Ltd. (supra), directed the Assessing Officer to recompute and allow the MAT credit against the tax liability. 4. We have considered the rival submissions on either side and perused the relevant material available on record. It is not in dispute that if surcharge and education cess form part of incometax, then it has to be adjusted against the tax liability under the MAT scheme. Article 271 of the Constitution of India in categorical term says that surcharge and education cess include income-tax. This was also clarified by the Apex Court in the case of K. Srinivasan (supra).

Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. 5. In the result, the appeal filed by the Revenue is dismissed.”

From the above, it is clear that this Hon’ble Tribunal in its subsequent order has considered its decision already rendered and further placed reliance on the decision of the Hon’ble Supreme Court and allowed the appeal in favour of the assessee. Therefore, we do not find any reason to interfere with the order of the ld.CIT(A) and hence the Revenue’s appeal is dismissed.

6.

In the result, the Revenue’s appeal is dismissed.

Order pronounced in the court on 22nd October, 2019 at Chennai.

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