T.C. HEALTHCARE PVT LTD.,MEERUT vs. ACIT, CIRCLE-25(1), NEW DELHI

PDF · subscribers
ITA 528/DEL/2023Status: DisposedITAT Delhi29 August 2023AY 2017-18Bench: allowing MAT Credit u/s 115JAA of the Act or not . 3. We have heard the rival submissions and perused the materials available on record. The assessee company is engaged in the business of manufacturing of pharma products and had filed its return of income for the Asst Year 2017-18 on 25.10.2017 declaring total income of Rs 1,22,39,130/-. The assessment was completed u/s 143(3) of the Act on 25.12.2019 accepting the returned income. However, a demand of Rs.4,11,660/- was raised thereon. In t4 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that interest under section 234C should be calculated after reducing the MAT credit, as per the definition of 'tax due on the returned income' in the Act. The action of the lower authorities was found to be in contravention of the law.

What were the facts?

The assessee company was assessed under section 143(3) of the Income Tax Act. The Assessing Officer charged interest under section 234C based on the assessed tax before allowing Minimum Alternate Tax (MAT) credit under section 115JAA.

What were the issues?

Whether interest under section 234C can be charged before allowing MAT credit under section 115JAA.

Which sections of the Income-tax Act were involved?

Section 234C,Section 115JAA,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘H’: NEW DELHI

For Respondent: Mr. Amit Katoch, Sr. DR
Hearing: 02/08/2023Pronounced: 29/08/2023

ORDER PER M. BALAGANESH AM: This appeal of the Assessee arises out of the order of the Learned Commissioner of Income Tax (Appeals), National Faceless

Appeal Centre (NFAC), Delhi, [hereinafter referred to as ‘Ld. CIT(A)’] in Appeal No.CIT(A), Delhi-9/10682/2019-20 against the order T.C. Healthcare Pvt. Ltd. vs. ACIT passed by ACIT, Circle-25(1), Delhi (hereinafter referred to as the ‘Ld. AO’) u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) on 25/12/2019.

2.

The only issue to be decided in this appeal is as to whether the interest u/s 234C of the Act could be charged before allowing MAT Credit u/s 115JAA of the Act or not .

3.

We have heard the rival submissions and perused the materials available on record. The assessee company is engaged in the business of manufacturing of pharma products and had filed its return of income for the Asst Year 2017-18 on 25.10.2017 declaring total income of Rs 1,22,39,130/-. The assessment was completed u/s 143(3) of the Act on 25.12.2019 accepting the returned income.

However, a demand of Rs.4,11,660/- was raised thereon. In the tax computation sheet forming part of the assessment order, the ld. AO had charged interest u/s 234C of the Act for Rs 5,65,652/-.

This was charged by considering the assessed tax before allowing MAT Credit u/s 115JAA of the Act. The assessee carried this issue before the ld. CIT(A) but could not succeed. Hence, it is in appeal before us.

T.C. Healthcare Pvt. Ltd. vs. ACIT 4. As per section 234C of the Act, interest is charged on the shortfall in payment of ‘tax due on the returned income’. The expression ‘tax due on the returned income’ is defined in Explanation to Section 234C of the Act wherein it has been clearly stated that – ‘tax due on the returned income’ means the tax chargeable on the total income declared in the return of income furnished by the assessee, as reduced by the amount of – (i) Tax deducted / collected at source; (ia) any relief of tax allowed u/s 89 ; (ii) any relief of tax allowed u/s 90 on account of tax paid outside India; (iii) any relief of tax allowed u/s 90A on account of tax paid in a specified territory outside India referred to in that section ; (iv) any deduction from the Indian income-tax payable, allowed under section 91, on account of tax paid in a country outside India; and (v) any tax credit allowed to be set off in accordance with the provisions of section 115JAA or section 115JD.

5.

Hence it could be safely concluded that the action of the lower authorities is in complete contravention of the aforesaid provisions of the Act and hence is to be declared as bad in law. Hence we direct the ld. AO to compute the interest chargeable , if any, u/s 234C of the Act, after T.C. Healthcare Pvt. Ltd. vs. ACIT reducing MAT credit u/s 115JAA of the Act. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.

6.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 29th August, 2023.

More judgments on Section 234C

All 6,043 judgments and leading authorities on Section 234C →

Recent GST High Court judgments

Search GST case law →