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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
आदेश/ ORDER
PER D. KARUNAKARA RAO, AM :
This appeal is filed by the assessee against the order of CIT(A)-6, Pune, dated 24-06-2016 for the Assessment Year 2008-09.
The impugned order arises from the order of the Assessing Officer passed u/s 154 of the Act dated 12.09.2014. Assessee is aggrieved with the decision of the Assessing Officer, who invoked the said provision when the mistake rectified suffers from multiple views. CIT(A) confirmed the said rectification order of the Assessing Officer. Therefore, the assessee is in appeal before us with the following grounds :-
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“1. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was not justified rather grossly erred in not appreciating that order passed by Ld. A.O. under section 154 of the Income-tax Act, 1961 (‘the Act’) is without jurisdiction as the mistake which is rectified by said order is the one on which more than one view is possible and hence, is debatable. 2. Without prejudice to Ground 1, that on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was not justified rather grossly erred in sustaining reduction of MAT credit available after calculating surcharge and education cess without appreciating the fact that the Appellant has calculated MAT credit as per mechanism provided in ITR form as prescribed by Central Board of Direct Tax and the Appellant has no other choice but to mandatorily adhere to the format prescribed by CBDT. 3. The appellant prays to be allowed to add, amend, modify, rectify, delete, raise any grounds of appeal at the time of hearing.”
Bringing our attention to the ground no.2 relates to the merit of the
issue under consideration, ld. Counsel for the assessee submitted that the
MAT credit is available before calculating the surcharge and education cess.
The issue stands covered in favour of the assessee. In this regard, ld.
Counsel for the assessee filed various decisions including the decision of
Mumbai Bench of the Tribunal in the case of M/s Crompton Greaves Ltd.
vs. DCIT in ITA No.4831/M/2012 order dated 16.12.2015 for the
assessment year 2007-08. In the said case, the Assessing Officer held that
MAT credit should be given after the taxes are determined including the
quantification of surcharge and education cess. The Mumbai Bench of the
Tribunal in the said decision decided the issue in favour of the assessee by
relying on another decision of the Tribunal in the case of M/s. Classic
Shares & Stock Broking Services Ltd. vs. ACIT in ITA No.5869/M/2007
order dated 23.07.210. Further, the decision of Hon’ble Allahabad High
Court in the case of CIT vs. Vacment India in IT Appeal No.207 of 2014
order dated 29.10.2014 was also filed by the ld. Counsel for the assessee
and the said judgement was also decided in favour of the assessee. It is
finding of the Hon’ble High Court that “Tax payable” is to be arrived at by
deducting credit u/s 115JAA from “Gross tax payable” and on this amount
of “Tax payable”, the surcharge and cess are to be computed. Therefore, it
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is a decided issue that the levy of surcharge and education cess is
calculated and after that MAT credit is granted to the assessee.
We also find similar view has been taken by the Pune Bench of the
Tribunal in the case of ACIT vs. M/s. Kalyani Global Engineering Pvt. Ltd.
in ITA No.304/PN/2013 order dated 19.02.2014 for assessment year
2008-09 in favour of the assessee and contents of para 6 and 6.1 are
relevant. We proceed to extract the relevant lines from para 6.1 from the
said decision and the same read as under :-
“6.1………. In this view of the matter and in view of the detailed reasoning given by the Ld. CIT(A), while holding that the A.O. has incorrectly passed an order u/s 154 rectifying the tax calculation of giving MAT credit after Surcharge and Education Cess, we find no infirmity in the order of the CIT(A). Accordingly, we uphold the same and the grounds raised by the Revenue are dismissed.”
5. For the sake of completeness, we also proceed to insert relevant For the sake of completeness, we also proceed to insert relevant
extract from the order in the case of M/s Crompton Greaves Ltd. (supra),
where one of us (Accountant Member) is the author :-
“5. On hearing both the parties, we find the judgment of the Allahabad High Court in the case of Vacment India (supra), dated 29.10.2014 is subsequent in time qua the said order of the Tribunal in the case of Classic Shares & Stock Broking Services Ltd (supra) dated 23.7.2010. The said judgment of the Hon'ble High Court was also not available to the AO and the CIT (A), who passed the impugned order dated 29.5.2012. We have also perused the said judgment of the Hon'ble High Court and find the High Court discussed the relevant Income Tax Return (ITR) Form No.6 and the different columns therein and held as under:-
"Tax payable" is to be arrived at deducting credit under section 115JAA from "gross tax payable" and on this amount of "tax payable" surcharge and cess are to be computed."
On perusal of the said judgment, we find paras 5 to 7 are relevant in this regard. Considering the significant of these paras, the same are reproduced as under:-
"5. The only question which is raised pertains to the computation of tax in accordance with the modalities which are prescribed in the relevant form, ITR- 6. Insofar as is material, the relevant entries in the form (Part B- TTI) are as follows:-
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Gross tax payable (enter higher of 2c and 1) 4. Credit under section 115JAA of tax paid in earlier years (if 2c is more than 1) (7 of Schedule MATC). 5. Tax payable after credit under section 115JAA [(3-4)] 6. Surcharge on 5 7. Education cess, including secondary and higher education cess on (5+6) 8. Gross tax liability (5+6+7) 6. The aforesaid entries leave no manner of ambiguity in regard to the method of computation of tax liability. Entry 3 requires computation of the gross tax payable. Under entry 4, credit is required to be given under section 115JAA of the Act of the tax paid in earlier years. Entry 5 requires a computation of the tax payable after credit under section 115JAA of the Act. The mater is placed beyond doubt by the parenthesis, which includes that tax payable under entry 5 is to be arrived at by deducting the credit under section 115JAA of the Act (under entry 3) from the gross tax payable (under entry 4). The surcharge is computed on the amount reflected in entry 5. 7. The Tribunal has noted that from the next assessment year, AY 2012-13, the position was materially altered, but in the present case, since the dispute related to AY 2011-12, the method of computation, as directed by the Commissioner (Appeals), was plainly in accordance with the methodology as provide in ITR-6. The Tribunal in confirming the order of the Commissioner (appeals) has, hence, not committed any error. The appeal will not given rise to any substantial question of law and is, accordingly, dismissed."
Considering the above stated ratio laid down by the Hon'ble High Court on the interpretation of the relevant provisions, we are of the opinion Court on the interpretation of the relevant provisions, we are of the opinion that the AO's failure to follow the above stated correct interpretation of law constitutes mistake apparent from the record. Therefore, the issue raised by the assessee in the original grounds as well as modified grounds is allowed in favour of the assessee.”
From the above, it is evident that the failure to consider the above
settled legal proposition constitutes a mistake apparent from record.
Therefore, in the instant case, CIT(A) failure to comply with said legal
proposition.
Thus, in the said cases, the Tribunal very categorically held that the
failure on the part of the Assessing Officer in not following the ratio of the
said orders of the Tribunal and the ratio of the Hon’ble Allahabad High
Court (supra) constitutes a mistake apparent from the record. Accordingly,
5 ITA No.2182/PUN/2016
the order of CIT(A) needs to be reversed and the grounds raised by the assesee are allowed in favour of the assessee.
In the result, the appeal of the assessee is allowed.
Order pronounced on this 02nd day of November, 2018.
Sd/- Sd/- (SUSHMA CHOWLA) (D. KARUNAKARA RAO) �या�यकसद�य/ JUDICIAL MEMBER लेखासद�य/ ACCOUNTANT MEMBER पुणे/ Pune; �दनांकDated : 02nd November, 2018. Sujeet आदेशक���त�ल�पअ�े�षत/Copy of the Order is forwarded to : अपीलाथ�/ The Appellant; 1. ��यथ�/ The Respondent; 2. आयकरआयु�त(अपील) / The CIT(A)-6, Pune; 3. 4. The Pr. CIT-5, Pune; �वभागीय��त�न�ध, आयकरअपील�यअ�धकरण, पुणे“A” / DR ‘A’, �वभागीय��त�न�ध, आयकरअपील�यअ�धकरण, पुणे“A” / DR ‘A’, 5. 5. ITAT, Pune; गाड�फाईल/ Guard file. 6.
// True Copy // आदेशानुसार/ BY ORDER,
स�या�पत ��त//True Copy// Senior Private Secretary आयकरअपील�यअ�धकरण ,पुणे/ ITAT, Pune