DCIT, CHENNAI V. M/s. V.Ramakrishna & Sons Pvt. Ltd., CHENNAI

ITA 2159/CHNY/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5137 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-05-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 23-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR
• Assessee Lawyers: R VE NKATANARAYANAN
• Section: 234B; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B, CHENNAI (BEFORE DR.O.K.NARAYANAN, VICE PRESIDENT AND SHRI GEORGE MATHAN, JUDICIAL MEMBER) .. I.T.A.NOS.2159 & 2160(MDS)2010 ASSESSMENT YEARS : 2000-01 & 2001-02 THEDEPUTY COMMISSIONER OF INCOME-TAX, COMP. CIRCLE III(4), CHENNAI. (APPELLANT) V. M/S. V.RAMAKRISHNA & SONS PVT. LTD., OLD NO,5, NEW NO.9, FIRST CRESCENT PARK ROAD, GANDHI NGR., ADYAR, CHENNAI-600 020. PAN AAACV2307A. (RESPONDENT) APPELLANT BY: SHRI K.E.B RENGARAJAN, JR. STANDING COUNSEL. RESPONDENT BY: SHRI R.VENK ATANARAYANAN O R D E R PER DR.O.K.NARAYANAN, VICE PRESIDENT THESE TWO APPEALS ARE FILED BY THE REV ENUE. THE RELEVANT ASSESSMENT YEARS ARE 2000-01 AND 2001-02. THESE AP PEALS ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER(APPE ALS)-III, CHENNAI DATED 17-9-2010 AND ARISE OUT OF THE ORDERS PASSED UNDER SECTION 154 OF THE INCOME-TAX ACT, 1961. THE ISSUE RAISED BEFORE THE ITA 21 59 & 2160(MDS)/2010 2 COMMISSIONER(APPEALS) WAS WHETHER MAT CREDIT SHOULD BE GRANTED BEFORE COMPUTING INTEREST UNDER SECTIONS 234B AND 2 34C OF THE ACT AND WHETHER IT COULD BE RECTIFIED UNDER SECTION 154 WHEN THE RETURNS WERE PROCESSED UNDER SECTION 143(1) OF THE ACT. 2. THE ASSESSEE HAD CLAIMED MAT CREDITS OF ` .5,74,761/- AND ` .6,85,947/- FOR THE IMPUGNED ASSESSMENT YEARS FROM THE TAX PAYABLE BEFORE COMPUTING THE INTEREST UNDER SECTIONS 234B A ND 234C OF THE ACT. THE ASSESSING OFFICER, HOWEVER, RECTIFIED THE INTIMATION UNDER SECTION 143(1) AND LEVIED INTEREST UNDER SECTIONS 2 34B AND 234C WITHOUT FIRST GIVING MAT CREDIT IN FAVOUR OF THE AS SESSE. THE ASSESSEE SUBMITTED BEFORE THE ASSESSING AUTHORITY T HAT THE ISSUE COULD NOT BE RECTIFIED UNDER SECTION 154, AS IT IS A DEBATABLE MATTER. THE ASSESSEE ALSO ARGUED BEFORE THE COMMISSIONER(AP PEALS) THAT ON MERITS AS WELL THE ISSUE HAS BEEN DECIDED BY THE HO NBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. CHEMPLAST SANMAR LTD. & OTHERS, REPORTED IN 224 CTR 211. THE COMMISSIONER(APPEALS) ACCEPTED THE CONTENTION OF THE ASSESSEE ON MERITS AND HELD THAT INTEREST UNDER SECTIONS 234B AND 234C SHOULD BE COMPUTED ONLY AFTE R FIRST GIVING CREDIT FOR BROUGHT DOWN MAT CREDIT. AS THE ISSUE W AS DECIDED ON ITA 21 59 & 2160(MDS)/2010 3 MERITS, THE COMMISSIONER(APPEALS) DID NOT CONSIDER THE LEGALITY OF THE PROCEEDINGS INITIATED BY THE ASSESSING OFFICER UNDE R SECTION 154. 3. THE REVENUE IS AGGRIEVED AND THEREFORE FI LED THE PRESENT APPEALS BEFORE US. 4. THE GROUND RAISED BY THE REVENUE IS THAT THE COMMISSIONER(APPEALS) IS ERRED IN HOLDING THAT MAT CREDIT SHOULD BE GIVEN BEFORE CHARGING INTEREST UNDER SECTIONS 234B AND 234C. IT IS ALSO THE CASE OF THE REVENUE THAT THE DECISION OF T HE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. CHEMPLAST SANMAR LTD. & OTHERS, 224 CTR 211, RELIED UPON BY THE COMMISSIONER(APPEAL S) HAS NOT BECOME FINAL AND SLP HAS BEEN FILED BY THE DEPARTME NT BEFORE THE SUPREME COURT. 5. WE HAVE HEARD BOTH THE SIDES IN DETAIL AN D CONSIDERED THE MATTER. THE COCHIN BENCH OF THIS TRIBUNAL IN THE C ASE OF M/S.SYNTHETIC INDUSTRIAL CHEMICALS LTD. VS. DCIT, 2 70 ITR 98 (AT) HAS HELD THAT LIABILITY OF INTEREST UNDER SECTIONS 234B AND 234C WILL BE COMPUTED ONLY AFTER GIVING CREDIT FOR THE MAT CREDI T BROUGHT DOWN FROM THE EARLIER ASSESSMENT YEARS. THIS VIEW HAS B EEN FOUND APPROVAL BY THE JUDGMENT OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. CHEMPLAST SANMAR LTD. & OTHERS, 224 CTR 211, ITA 21 59 & 2160(MDS)/2010 4 WHICH HAS BEEN RELIED UPON BY THE COMMISSIONER(APPE ALS). THE SAID DECISION HAS NOW BEEN APPROVED BY THE HONBLE SUPRE ME COURT ALSO, AS HELD IN THE RECENT DECISION RENDERED BY THEIR LO RDSHIPS IN CIT VS. TULSIAN NEC LTD. 6. THEREFORE WE FIND THAT THE COMMISSIONER(AP PEALS) HAS DECIDED THE ISSUE IN ACCORDANCE WITH LAW AND HAS UPHELD THE CONTENTION OF THE ASSESSEE ON MERITS. THUS THERE IS NO REASON TO INT ERFERE WITH HIS ORDER. THE QUESTION OF INVOKING SECTION 154 AS SUC H HAS BECOME ACADEMIC AND THEREFORE PRACTICALLY INFRUCTUOUS. 7. IN RESULT THESE TWO APPEALS FILED BY THE R EVENUE ARE DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 4 TH DAY OF MAY, 2011 AT CHENNAI. SD/- SD/- (GEORGE MATHAN) (DR.O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 4 TH MAY, 2011. V.A.P. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A) (4) CIT (5) D.R. (6) GUARD FILE