The Hanuman Estates Ltd., Kolkata V. D.C.I.T.,Circla-4(2), Kolkata

ITA 1872/KOL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9442 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 27-07-2020
• Assessment Year: 2015-2016
• Appeal Filed On: 08-08-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DHRUBAJYOTI ROY
• Keywords: Opportunity of being heard
• Section: 154; 143(1); 139(1); 20

Judgement Text

1 IT A NO . 1872 / KOL /20 19 THE HANUMAN ESTATES LTD. . , AY - 20 1 5 - 1 6 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOLKATA ( . . , . . , ) [BEFORE SHRI A. T. VARKEY, JM & DR. A.L. SAINI, AM ] I.T.A. NO. 1 8 7 2 /KOL/20 19 ASSESSMEN T YEAR: 20 1 5 - 1 6 THE HANUMAN ESTATES LTD. (PAN: AABCT1975B) VS. DEPUTY COMMISSIONER OF INCOME - TAX, CIRCLE - 4(2 ) , KOLKATA . APPLICANT RESPONDENT DATE OF HEARING 30 .0 7 .20 20 DATE OF PRONOUNCEMENT 19 .0 8 .20 20 FOR THE APPLICANT SHRI S. M. SURANA , ADVOC ATE FOR THE RESPONDENT SHRI DHRUBAJYOTI ROY, JCIT ORDER PER SHRI A. T. VARKEY, JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF LD. CIT(A) - 2, KOLKATA DATED 2 1 .0 6 .2019 FOR AY 2015 - 1 6. THE MAIN GRIEVANCE OF THE ASSESSEE IS THAT THE MAT CREDIT OF RS.8,70,241/ - WHICH WAS CARRIED FORWARD FROM AY 2013 - 14 HAS NOT BEEN GRANTED TO THE ASSESSEE ON THE PLEA THAT ASSESSEE HAS NOT CLAIMED IT IN THE RETURN OF INCOME. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAD UNDISPUTEDLY MAT CREDIT OF RS.54, 21,075/ - WHICH THE ASSESSEE DID NOT CLAIM IN THE ASSESSMENT YEAR UNDER CONSIDERATION. THEREFORE, WHEN THE ASSESSEES RETURN WAS PROCESSED AND INTIMATION GIVEN U/S. 143(1) OF THE INCOME - TAX ACT, 1961 ( HEREINAF TER REFERRED TO AS THE ACT) IT WAS NOT GRANTED TO THE ASSESSEE. THEREFORE, THE ASSESSEE MOVED AN APPLICATION U/S. 154 OF THE ACT BEFORE THE AO FOR RECTIFICATION OF THE SAME WHICH WAS DENIED ON THE REASON THAT THE HONBLE SUPREME COURT IN GOETZ (INDIA) LTD. VS. CIT 284 ITR 323 HAS HELD THA T THE AO CANNOT ENTERTAIN A CLAIM UNLESS THE ASSESSEE HAS PUT FORWARD SUCH CLAIM BY FILING RETURN U/S. 139(1) OF THE ACT. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO WAS OF THE VIEW THAT THERE WAS NO ERROR IN THE ORDER OF RECTIF ICATION PASSED BY THE AO AND SINCE THE ISSUE IS A 2 IT A NO . 1872 / KOL /20 19 THE HANUMAN ESTATES LTD. . , AY - 20 1 5 - 1 6 DEBATABLE ONE, HE REFUSED TO INTERFERE AND DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED, THE ASSESSEE IS BEFORE US. 3. THE LD. AR DREW OUR ATTENTION TO PAGE 29 OF THE PAPER BOOK AND CONTENDED THAT THE DEPARTMENT HAD ACCEPTED WHILE PROCESSING THE RETURN IN RESPECT OF AY 2016 - 17 THAT THE ASSESSEE HAD MAT CREDIT OF RS.54,21,075/ - FROM AY 2013 - 14 AND HAS ALLOWED THE MAT CREDIT FOR AY 2016 - 17 TO THE TUNE OF RS.11,14,185/ - . IT WAS ALSO BROUGHT TO OUR NOTICE THAT BEFORE AY 2014 - 15 AND 2015 - 16 , THE MAT CREDIT WAS TO THE TUNE OF RS.21,10,431/ - WHICH WAS NOT ALLOWED TO THE ASSESSEE. THE LD. AR CITED THE DECISION OF THE TRIBUNAL IN THE CASE OF FISERV INDIA PVT. LTD. VS. ACIT, ITA NO. 6583/DEL/2019 FOR AY 2013 - 14 DATED 03.07.2020 AND DREW OUR ATTENTION TO PAGE 18 OF THE PAPER BOOK WHEREIN THE DELHI T RIBUNAL HAS HELD THAT THIS ISSUE OF MAT CREDIT IS NOT A DEBATABLE ISSUE AND DREW OUR ATTENTION TO PARA 11 OF THE ORDER WHEREIN THE ISSUE WHICH WAS NOTED BY THE TRIBUNA L FOR ADJUDICATION WAS AS UNDER: 11. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. THE ONLY ISSUE INVOLVED IN THIS GROUND OF APPEAL IS THAT WHETHER THE ACTION OF THE LEARNED ASSESSING OFFICER IN CO RRECTING MAT CREDIT AVAILABLE TO THE ASSESSEE IS A DEBATABLE ISSUE AND THEREFORE THE LEARNED ASSESSING OFFICER COULD NOT HAVE INVOKED THE PROVISIONS OF SECTION 154 OF THE INCOME TAX ACT. THE PROVISIONS OF SECTION 115 JAA IS AS UNDER: 4 . THEREAFTER, OU R ATTENTION TO PARA 12 OF THE ORDER WAS DRAWN WHEREIN THE TRIBUNAL HELD AS UNDER: FURTHERMORE, THERE IS NO PROVISION THAT THE ASSESSING OFFICERS SHOULD DETERMINE THE TAX CREDIT, WHICH SHALL BE CARRIED FORWARD AND SET OFF. IT IS AN INBUILT MECHANISM OF THE LAW OF THE CREDIT AND SET OFF. THEREFORE, ON APPLICATION OF A PARTICULAR FORMULA, IF THE TAX PAYABLE UNDER THE NORMAL COMPUTATION IS HIGHER THAN THE MINIMUM ALTERNATE TAX PAYABLE BY THE ASSESSEE, AND IF THE ASSESSEE HAS MAT CREDIT AVAILABLE, SAME SHA LL BE GRANTED AS A CREDIT TO THE ASSESSEE AGAINST THE TAX LIABILITY. THEREFORE, WE DO NOT FIND THAT THERE IS ANY OPTION AVAILABLE EITHER TO THE ASSESSING OFFICER OR TO THE ASSESSEE. THE LD. AR ALSO COULD NOT SHOW US THAT THIS ISSUE IS DEBATABLE. ACCORD ING TO US, LANGUAGE OF LAW IS SIMPLE AND CLEAR. IN VIEW OF THIS, WE REJECT THE ARGUMENT OF THE LEARNED AUTHORIZED REPRESENTATIVE THAT MAT CREDIT IS ALSO AN OPTION TO THE ASSESSEE. WE DO NOT FIND THAT THERE IS SUCH OPTION AVAILABLE TO THE ASSESSEE. IT IS AUTOMATIC.. THEREFORE, WE DO NOT FIND ANY DEBATABLE ISSUE INVOLVED IN ADJUSTING THE MAT CREDIT AGAINST THE TAX LIABILITY OF THE ASSESSEE. 5. THE LD. AR ALSO DREW OUR ATTENTION TO THE DECISION OF HONBLE SUPREME COURT IN CIT VS. TULSYAN NEC LTD., CIVI L APPEAL NOS. 10677 - 79 OF 2010 AND DREW OUR ATTENTION TO PAGE 5 OF THE PAPER BOOK WHEREIN THE HONBLE S UPREME COURT AT PARA 9 HAS HELD AS UNDER: 3 IT A NO . 1872 / KOL /20 19 THE HANUMAN ESTATES LTD. . , AY - 20 1 5 - 1 6 9. WE HAVE DISCUSSED HEREINABOVE THE SCHEME OF SECTION 115JA(1) AND SECTION 115JAA. THE ENTIRE SCHEME OF SE CTIONS 115JA(1) AND 115JAA SHOWS THAT IF AN ASSESSEE IS ENTITLED TO A TAX CREDIT AS A CONSEQUENCE OF THE ASSESSEE MAKING PAYMENT OF TAX UNDER SECTION 115JA(1) IN THE YEAR ONE, THEN, THE SET OFF OF SUCH TAX CREDIT FOLLOWS AS A MATTER OF COURSE ONCE THE COND ITIONS MENTIONED IN SECTION 115JAA ARE FULFILLED AND THE GRANT OF SUCH CREDIT IS NOT DEPENDENT UPON DETERMINATION BY THE AO. SAVE AND EXCEPT THAT THE ULTIMATE AMOUNT OF TAX CREDIT TO BE ALLOWED WILL BE DEPENDENT UPON THE FINAL DETERMINATION OF THE TOTAL IN COME FOR THE FIRST ASSESSMENT YEAR. THERE IS NO PROVISION UNDER SECTION 115JAA WHICH POSTPONES THE RIGHT OF THE ASSESSEE TO CLAIM SET OFF TO THE DETERMINATION OF THE TOTAL INCOME BY THE A.O. IN THE FIRST ASSESSMENT YEAR. ENTITLEMENT/RIGHT TO CLAIM SET OFF IS DIFFERENT FROM THE QUANTUM/QUANTIFICATION OF THAT RIGHT. ENTITLEMENT OF MAT CREDIT IS NOT DEPENDANT UPON ANY ACTION TAKEN BY THE DEPARTMENT. HOWEVER, QUANTUM OF TAX CREDIT WILL DEPEND UPON THE ASSESSMENT FRAMED BY THE AO. THUS, THE RIGHT TO SET OFF ARIS ES AS A RESULT OF THE PAYMENT OF TAX UNDER SECTION 115JA(1) ALTHOUGH QUANTIFICATION OF THAT RIGHT DEPENDS UPON THE ULTIMATE DETERMINATION OF TOTAL INCOME FOR THE FIRST ASSESSMENT YEAR. FURTHER, AN ASSESSEE HAS A RIGHT TO TAKE INTO ACCOUNT THE SET OFF EVEN WHILE ESTIMATING ITS LIABILITY TO PAY ADVANCE TAX ON THE 'CURRENT INCOME' IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER XVII - C. ALTHOUGH SECTION 209(1)(D) DOES NOT MAKE ANY SPECIFIC PROVISION EITHER BEFORE OR AFTER THE AMENDMENTS CARRIED OUT BY THE FINANC E ACT, 2006 TO THE EFFECT THAT AN ASSESSEE IS ENTITLED TO SET OFF THE TAX CREDIT THAT WOULD BE AVAILABLE IN TERMS OF SECTION L15JAA(L) WHILE COMPUTING THE QUANTUM OF ADVANCE TAX THAT IS TO BE PAID IT MUST FOLLOW THAT AN ASSESSEE WOULD BE ENTITLED TO DO SO OTHERWISE IT RESULTS IN ABSURDITY, VIZ, THAT AN ASSESSEE PAYS ADVANCE TAX ON THE FOOTING THAT IT IS NOT ENTITLED (WHEN IN FACT IT IS SO ENTITLED AS DISCUSSED ABOVE) TO THE CREDIT AND THEREAFTER CLAIMS A REFUND OF SUCH ADVANCE TAX PAID AS A CONSEQUENCE OF T HE SET OFF. 6. C ITING THE AFORESAID DECISION S, THE LD. AR CONTENDED THAT THE LD. CIT(A) ERRED IN FINDING THAT THE ISSUE INVOLVED I.E. CARRY FORWARD OF MAT CREDIT IS A DEBATABLE ISSUE. THEREFORE , HE PRAYED THAT THE MAT CREDIT BE GRANTED TO THE ASSESSEE. PER CONTRA, THE LD. DR OPPOSED SUCH A PRAYER OF THE ASSESSEE AND SUBMITTED THAT THERE WAS NO ERROR APPARENT ON THE FACE OF THE RECORD AND SINCE THE ASSESSEE DID NOT CLAIM THE MAT CREDIT IN ITS RETURN , THE AO RIGHTLY DID NOT ALLOW IT AND CITED THE DECISION OF HONBLE SUPREME COURT IN GOETZ (INDIA) LTD., (SUPRA). 7. WE HAVE HEARD RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIAL AVAILABLE ON RECORD. WE DO NOT REPEAT THE FACTS HERE AGAIN FOR THE SAKE OF BREVITY. ACCORDING TO US T HE LD. CIT(A) ERRED IN D ISMISSING THE APPEAL OF THE ASSESSEE CITING THAT THE ISSUE I.E. CARRY FORWARD OF MAT CREDIT IS DEBATABLE. I N THE LIGHT OF THE HONBLE SUPREME COURT DECISION AS WELL AS THE DECISION OF THE TRIBUNAL CITED SUPRA, WE ARE OF THE OPINION THAT CARRY FORWARD OF M AT CREDIT OUGHT TO HAVE BEEN DONE AUTOMATICALLY. EVEN THOUGH THE HONBLE SUPREME COURT IN GOETZ (INDIA) LTD. (SUPRA) HELD THAT THE AO IS NOT COMPETENT TO GRANT ANY CLAIM WITHOUT THE ASSESSEE CLAIMING IT IN ITS RETURN OF INCOME U/S. 139(1) OF THE ACT HAS 4 IT A NO . 1872 / KOL /20 19 THE HANUMAN ESTATES LTD. . , AY - 20 1 5 - 1 6 SPECIFICALLY CLARIFIED THAT THE EMBARGO ON THE POWER OF AO NOT TO ENTERTAIN CLAIMS WHICH WAS NOT CLAIMED BY ASSESSEE WHILE FILING OF RETURN U/S 139(1) OF THE ACT, IS NOT THERE FOR THE APPELLA TE AUTHORITIES. THEREFORE, WE ADMIT THE CLAIM OF THE ASSESSEE R EGARDING THE CLAIM OF CARRY FORWARD OF MAT CREDIT FOR AY 2015 - 16 AND RESTORE THIS ISSUE BACK TO THE FILE OF THE AO SO THAT THE AO CAN VERIFY THE CLAIM OF THE ASSESSEE AND IF FOUND TO BE CORRECT I.E. CLAIM FOR CARRY FORWARD MAT CREDIT TO THE TUNE OF RS.8,70 ,241/ - THEN THE AO SHOULD ALLOW THE CLAIM OF THE ASSESSEE IN ACCORDANCE TO LAW. NEEDLESS TO SAY THE ASSESSEE SHOULD BE GIVEN OPPORTUNITY OF BEING HEARD. 8 . IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER IS PRONOUNCED I N THE OPEN COURT ON 19 AUGUST , 2020 . SD/ - SD/ - (DR. A. L. SAINI) ( ABY. T. VARKEY ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 19 AUGUST , 2020 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT THE HANUMAN ESTATES LTD., 8, B.B.D . BAG EAST, KOLKATA - 700 001. 2 RESPONDENT D CIT, CIRCLE - 4 ( 1 ) , KOLKATA . 3. 4. CIT (A) - 2 , KOLKATA. (SENT THROUGH E - MAIL) CIT , KOLKATA. 5 . DR, ITAT, KOLKATA. (SENT THROUGH E - MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR