ACIT LTU-2, CHENNAI vs. SAINT GOBAIN GLASS INDIA LIMITED, KANCHIPURAM

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ITA 2549/CHNY/2017Status: DisposedITAT Chennai31 May 2018AY 2011-124 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 indeed part of income-tax, as supported by Article 271 of the Constitution and Apex Court judgments. Therefore, they should be adjusted against the tax liability under the MAT scheme.

What were the facts?

The Revenue appealed against the CIT(A)'s order regarding the assessment year 2011-12. The core issue was whether surcharge and education cess are part of income-tax for the purpose of MAT credit adjustment.

What were the issues?

Whether surcharge and education cess are includible in income-tax for the purpose of calculating Minimum Alternate Tax (MAT) credit. Whether MAT credit should be allowed against income-tax, surcharge, and education cess.

Which sections of the Income-tax Act were involved?

Section 115JB

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI A. MOHAN ALANKAMONY

Hearing: 24.05.2018Pronounced: 31.05.2018

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

1.

This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) -17, Chennai, dated 21.08.2017 and pertains to assessment year 2011-12.

2.

Shri Asish Tripathy, the Ld. Departmental Representative, submitted that the only issue arises for consideration is whether the surcharge and education cess is part of the income-tax. Placing reliance on the decision of Mumbai Bench of this Tribunal in M/s Savita Oil Technologies Ltd. v. ACIT in dated 07.02.2017, the Ld. D.R. submitted that the surcharge and education cess have to be worked out on the tax liability. According to the Ld. D.R., from the gross amount so arrived, the amount of credit available under Section 115JB of the Income-tax Act, 1961 (in short 'the Act') on account of income-tax, surcharge and education cess have to be deducted and the net tax payable after setting off credit available under Section 115JB of the Act has to be worked out. However, according to the Ld. D.R., the CIT(Appeals) by placing reliance on another decision of Mumbai Bench of this Tribunal in Wyeth Limited v. ACIT in I.T.A. No.6682/Mum/2011 dated 09.01.2015, found that this decision of the Mumbai Bench of this Tribunal was followed by the Chennai Bench in Saint Gobain Gyproc India Ltd., therefore, surcharge and education cess have to be adjusted against the tax payable.

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 income- tax, 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.

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