“MAT credit”
The decision most relied on for MAT credit is CIT v. K. Srinivasan (83 ITR 346), cited in 129 judgments on BharatTax.
Leading authorities on MAT credit
The term 'tax' includes surcharge and cess. Surcharge and additional surcharge are considered components of income tax, which can be levied as a basic charge, surcharge, special surcharge, and additional surcharge.
The ITAT Special Bench in Rain Commodities Ltd. held that certain capital receipts, such as forfeited share warrants, if credited to the profit and loss account, are liable for book profits tax under Section 115JB (Minimum Alternate Tax).
An amendment to a section is declaratory and clarifies the existing legal position, rather than introducing a new rule.
A form prescribed under the Income-tax Rules cannot override the parent statute; the set-off of MAT credit balance against tax is not dependent on the computation of interest under section 234B.
Amendments to Sections 234A, 234B, and 234C of the Income-tax Act, 1961, are curative and have retrospective effect, intended to clarify and remove anomalies. Minimum Alternate Tax (MAT) credit must be set off against tax payable before computing advance tax liability to avoid absurd results.
MAT credit granted under section 115JAA should be inclusive of surcharge and cess.
The High Court holds that tax credit cannot be claimed on surcharge and education cess. The calculation of MAT credit should be done after applying surcharge and education cess.
MAT credit under Section 115JAA must be set off against the total tax liability, including surcharge and cess. This implies that cess forms part of the tax for the purpose of MAT credit adjustment.
