TATA COMMUNICATION , Mumbai V. DCIT 1(3)(2), Mumbai

ITA 2577/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8477 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 25-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR MENON
• Keywords: Depreciation; Maximum Marginal Rate; Revised return; TDS; Set aside
• Section: 143(3); 244A; 143(1); 22; 263; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI S. RIFA UR RAHMAN, ACCOUNTANT MEMBER IT A NO. 2577 /MUM./2019 ( ASSESSMENT YEAR : 20 08 09 ) TATA COMMUNICATION LTD. VIDESH SANCHAR BHAVAN M.G. ROAD, FORT, MUMBAI 400 001 P AN AAACV2808C . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX WARD 1 (3)( 2 ), MUMBAI . RESPONDENT ASSESSEE BY : SHRI NITESH JOSHI REVENUE BY : SHRI VIJAY KUMAR MENON DATE OF HEARING 22 .0 2 .202 1 DATE OF ORDER 24.03/2021 O R D E R PER S. RIFAUR RAHMAN, A.M. THE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE CHALLENGING THE ORDER DATED 4 TH JANUARY 2019, PASSED BY THE LEARNED COMMISSIONER (APPEALS) 3 , MUMBAI, FOR THE ASSESSMENT YEAR 20 08 09 . 2. GROUND NO.1, RAISED BY THE ASSESSEE IS REPRODUCED BELOW: ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN NOT ADJUDICATING THE SAID GROUND RAISED BY THE APPELLANT TO GRANT TAX CREDIT IN RESPECT OF TAX PAID AS PER THE PROVISIONS OF SE4CTION 115JAA OF THE ACT I.E., MAT AMOUNTING TO ` 21,43,324/ 2 TATA COMMUNICATION LTD. (ASSESSMENT YEAR : 2008 09) PERTAINING TO ERSTWHILE VSNL BROADBAN D LTD. (WHICH COMPANY STANDS MERGED WITH THE APPELLANT) IN EARLIER ASSESSMENT YEAR . 3. BRIEF FACTS ARE, THE ASSESSEE COMPANY IS IN THE BUSINESS OF PROVIDING INTERNATIONAL TELECOMMUNICATION SERVICES, NATIONAL LONG DISTANCE SERVICE WITHIN INDIA, I NTERNET RELATED SERVICES, IN MARSAT, AND OTHER VALUE ADDED SERVICES. T HE ASSESSEE COMPANY FILED ITS RETU RN OF INCOME ELECTRONICALLY ON 29 TH SEPTEMBER 2008, DECLARING TOTAL INCOME OF ` 216,72,38,850. SUBSEQUENTLY, THE ASSESSEE FILED REVISED RETURN OF INCOME ELECTRONICALLY ON 31 ST MARCH 2010, DECLARING TOTAL INCOME OF ` 189,59,77,130. IN THE REVISED RETURN OF INCOME, THE ASSESSEE HAD CLAIMED MINIMUM ALTERNATE TAX (MAT) CREDIT UNDER SECTION 115JAA OF THE ACT AGGREGATING TO ` 21,43,324 WHICH HAD BEEN PAID BY THE ERSTWHILE VBL (SINCE AMALGAMATED INTO ASSESSEES COMPANY W.E.F. 1 ST MARCH 2007 FOR THE ASSESSMENT YEAR 2007 08 ) . THE ASSESSMENT WAS COMPLETED ON 25 TH OCTOBER 2012, UNDER SECTION 143(3) R/W SECTION 144(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) ASSESSING TOTAL INCOME OF ` 839,05,13,020 UNDER THE NORMAL PROVISIONS OF THE ACT. THE ASSESSING OFFICER IN HIS ORDER MENTIONED THAT MAT CREDIT FOR THE ERSTWHILE VBL OF ` 21,43,324 TO BE GIVEN AFTER DUE VERIFICATION OF THE ASSESSEES SUBMISSIONS DATED 17.08.2011 . SUBSEQUENTLY, THE ASSESSMENT WAS RECTIFIED UNDER SECTION 154 OF THE ACT VIDE ORDER DATED 8 TH MARCH 2017, DETERMINING THE TOTAL INCOME AT ` 751,65,19,320. 3 TATA COMMUNICATION LTD. (ASSESSMENT YEAR : 2008 09) HOWEVER, SINCE NO RELIEF WAS GRANTED TO THE ASSESSEE INSOFAR AS MAT CREDIT IS CONCERNED , BEING AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY CONTESTING THE ISSUE ON NON GRANTING OF MAT CREDIT. 4. THE LEARNED COMMISSIONER (APPEALS), HOWEVER, HAS NOT MENTIONED ANY REASON FOR NOT ADJUDICATING THE ISSUE OF NON GRANTING OF MAT CREDIT ON MERIT. THEREFORE, THE ASSESSEE BEING STILL AGGRIEVED IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 5. BEFORE US, THE LEANED COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ISSUE RELATING TO NON GRANT OF MAT CREDIT IS COVERED BY THE DECISION OF THE CO ORDINATE BENCH IN AMBUJA CEMENTS LTD. V/S DCIT, ITA NO.3643/MUM./2018, DATED 5 TH SEPTEMBER 2019 . A COPY OF THIS ORDER IS PLACED ON RECORD. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE LEARNED COMMISSIONER (APPEALS) HAS NOT ADJUDICATED THE ISSUE, HENCE , HE PRAYED THAT THE ISSUE MAY BE RESTORE D TO THE FILE OF THE LE ARNED COMMISSIONER (APPEALS) TO ADJUDICAT E THE ISSUE ON MERIT. 7. CONSIDERED THE RIVAL SUBMISSIONS AND ON A PERUSAL OF THE MATERIAL ON RECORD, WE FIND THAT THE ISSUE BEFORE US IS MUTATIS MUTANDIS IDENT ICAL TO THE ISSUE DECIDED BY A C O - ORDINATE BENCH OF THIS TRIBUNAL IN 4 TATA COMMUNICATION LTD. (ASSESSMENT YEAR : 2008 09) AMBUJA CEMENTS LTD. (SUPRA) FOR THE ASSESSMENT YEAR 2007 08 WHEREIN THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS FOLLOWS: - 10. HAVING HELD SO, IT IS NOW NECESSARY TO EXAMINE WHETHER THE ORDER GIVING EFFECT TO PASSED BY THE ASSESSING OFFICER CAN BE HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE SO AS TO ENABLE LEARNED CIT TO EXERCISE POWER UNDER SECTION 263 OF THE ACT. UNDISPUTEDLY, LEARNED CIT HAS EXERCISED THE POWER UNDER SECTION 263 OF THE ACT ON THE ISSUE OF ALLOWANCE OF MAT CREDIT OF ` 6,99,46,873, RELATING TO AMBUJA CEMENT EASTERN LTD. WHICH AMALGAMATED WITH THE ASSESSEE COMPANY. IT IS THE REASONING OF LEARNE D CIT THAT THE PROVISIONS OF SECTION 115JAA OF THE ACT ALLOWS SET OFF OF MAT CREDIT ONLY IN RESPECT OF COMPANY IN WHOSE CASE SUCH MAT CREDIT HAS ARISEN. ACCORDING TO HER, CARRY FORWARD OF MAT CREDIT OF AMALGAMATING COMPANY CANNOT BE ALLOWED IN CASE OF AMAL GAMATED COMPANY. ON A READING OF THE PROVISIONS OF SECTION 115JAA OF THE ACT, WE DO NOT FIND ANY SUCH RESTRICTION WITH REGARD TO ALLOWANCE OF MAT CREDIT OF AN AMALGAMATING COMPANY AT THE HANDS OF THE AMALGAMATED COMPANY. RATHER, A PLAIN READING OF THE AFOR ESAID PROVISION REVEALS THAT MAT CREDIT IS ALLOWED TO BE CARRIED FORWARD FOR A SPECIFIC PERIOD. IN CASE OF SKOL BREWERIES LTD. (SUPRA), THE TRIBUNAL, MUMBAI BENCH, WHILE DECIDING IDENTICAL ISSUE HAS HELD THAT CARRIED FORWARD MAT CREDIT OF THE AMALGAMATING COMPANY CAN BE CLAIMED BY THE AMALGAMATED COMPANY. SIMILAR VIEW HAS BEEN EXPRESSED BY THE TRIBUNAL, AHMEDABAD BENCH, IN ADANI GAS LTD. (SUPRA). IF WE CONSIDER THE ISSUE IN THE LIGHT OF THE RATIO LAID DOWN IN THE AFORESAID DECISIONS, THERE CANNOT BE TWO OPI NIONS THAT THE ASSESSEE IS ENTITLED TO CLAIM CARRIED FORWARD MAT CREDIT OF THE AMALGAMATING COMPANY AMBUJA CEMENT EASTERN LTD. IT IS NECESSARY TO OBSERVE, WHILE COMPLETING THE ASSESSMENT IN CASE OF THE AMALGAMATING COMPANY AMBUJA CEMENT EASTERN LTD. IN ASS ESSMENT YEAR 2006 - 07, THE ASSESSING OFFICER HAS ALSO CONCLUDED THAT CARRIED FORWARD MAT CREDIT OF AMBUJA CEMENT EASTERN LTD. WOULD BE AVAILABLE IN THE HANDS OF THE PRESENT ASSESSEE. KEEPING IN VIEW THE ASSESSMENT ORDER PASSED IN CASE OF AMALGAMATING COMPAN Y AS WELL AS THE DECISIONS REFERRED TO ABOVE, THE PRINCIPLE WHICH EMERGES IS, THE CARRIED FORWARD MAT CREDIT OF AMALGAMATING COMPANY CAN BE TAKEN CREDIT OF BY AMALGAMATED COMPANY. VIEWED IN THE AFORESAID PERSPECTIVE, THE DECISION OF THE ASSESSING OFFICER I N ALLOWING SET OFF OF CARRIED FORWARD MAT CREDIT OF ` 6,99,46,873, AT THE HANDS OF THE ASSESSEE CANNOT BE CONSIDERED TO BE ERRONEOUS . THEREFORE, ONE 5 TATA COMMUNICATION LTD. (ASSESSMENT YEAR : 2008 09) OF THE CONDITIONS OF SECTION 263 OF THE ACT IS NOT SATISFIED. THAT BEING THE CASE, THE EXERCISE OF POWER UN DER SECTION 263 OF THE ACT TO REVISE SUCH AN ORDER IS INVALID. ACCORDINGLY, WE QUASH THE IMPUGNED ORDER PASSED BY THE LEARNED CIT. GROUNDS NO.1 AND 2 ARE DISMISSED AND GROUND NO.3 IS ALLOWED. [ EMPHASIS SUPPLIED BY US ] 9. RESPECTFULLY FOLLOWING THE AFORESAID CO ORDINATE BENCH DECISION OF THE TRIBUNAL, WE HOLD THAT THE ASSESSING OFFICER OUGHT TO HAVE ALLOWED THE CLAIM OF ASSESSEE IN CARRYING FORWARD MAT CREDIT OF AMALGAMATING COMPANY. CONSEQUENTLY, WE SET ASIDE THE IMPUGNED ORDER OF THE ASSESSING OFFI CER AND DIRECT HIM TO ALLOW ASSESSEES CLAIM. THUS, GROUND NO.1, IS ALLOWED. 10. GROUND S NO.2 AND 3, BEING INTER CONNECTED TO EACH OTHER, THEREFORE, BOTH THE GROUNDS ARE TAKEN UP TOGETHER. THESE GROUNDS ARE REPRODUCED BELOW: 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW , THE CIT(A) HAS ERRED IN NOT SPECIFICALLY DIRECTING THE ASSESSING OFFICER TO RECOMPUTED INTEREST U/S 234D AFTER EXCLUDING THE INTEREST PAID ON REFUND ISSUED U/S 143(1) OF THE ACT AS DECIDED IN THE APPELLANTS OWN CASE. 3. I N THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW , THE HONBLE CIT(A) HAS ERRED IN NOT SPECIFICALLY DIRECTING THE ASSESSING OFFICER TO RECOMPUTE INTEREST U/S 244A OF THE ACT PAYABLE ON THE REFUND ARRIVED AT AFTER EXCLUDING INTEREST GRANTED IN THE EARLIER ORDERS, AS DECIDED IN THE APPELLANTS OWN CASE. 11. CONSIDERED RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. WE FIND THAT THE ISSUE IN DISPUTE HAS BEEN DECIDED AGAINST THE 6 TATA COMMUNICATION LTD. (ASSESSMENT YEAR : 2008 09) ASSESSEE BY THE CO ORDINATE BENCH DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2001 02 IN ITA NO.4221/ MUM./2005, ETC., ORDER DATED 8 TH JULY 2015, A COPY OF WHICH IS PLACED ON RECORD, WHEREIN THE TRIBUNAL FOLLOWING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S INDIAN OIL CORPORATIO N LTD., 210 TAXMANN 466 (BOM.) HAS REJECTED THE CLAIM OF THE ASSESSEE. HOWEVER, THE ASSESSE E PREFERRED AN ALTERNATIVE PLEA THAT THE COMPUTATION OF INTEREST UNDER SECTION 234D OF THE ACT IS INCURRED AND, THEREFORE, THE INTEREST UNDER SECTION 244A OF THE ACT SHOULD BE EXCLUDED. AFTER CONSIDERING THE DECISION IN CASE OF SISTER CONCERN OF THE ASSESS EE IN TATA COMMUNICATION LTD. AND TATA POWER LTD., THE ISSUE WAS RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION THAT INTEREST UNDER SECTION 244A NEEDS TO BE EXCLUDED WHILE COMPUTING INTEREST UNDER SECTION 234D. FACTS OF THIS ISSUE BEING S IMILAR IN THE CURRENT YEAR AS WELL, CONSEQUENTLY, WE DEEM IT FIT TO SET ASIDE THE IMPUGNED ORDER OF THE LEARNED COMMISSIONER (APPEALS) AND RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO FOLLOW THE ABOVE DIRECTION. IT IS ALSO PERTINENT TO MENTION HERE THAT THE ASSESSEE, BY WAY OF EXHIBIT 9, HAS ALSO FILED CALCULATION OF INTEREST UNDER SECTION 244A OF THE ACT AND AS A MATTER OF CONVENIENCE THE SAME IS EXTRACTED BELOW: 7 TATA COMMUNICATION LTD. (ASSESSMENT YEAR : 2008 09) TATA COMMUNICATIONS LIMITED A.Y. 2008 09 T OTAL ASSESSED INCOME AS PER ORDER U/S 154 DTD. 7,51,65,19,317 7,51,65,19,317 LESS: DEPRECIATION ON LEASE PREMIUM PAID TO MMRDA 1,85,69,361 1,85,69,361 7,49,79,49,956 7,49,79,49,956 TAX @ 20% ON LTCG 3,67,66,003 73,53,201 3,67,66,003 73,53,201 TAX @ 30% ON THE BALANCE TOTAL INCOME 7,46,11,83,953 2,23,83,56,187 7,46,11,83,953 2,23,83,55,187 TOTAL TAX 2,24,57,08,387 2,24,57,08,387 LESS: CREDIT U/S 115JAA OF TAX PAID IN EARLIER YEARS BY ERSTWHILE VSNL BROADBANK LTD. (NOW MERGED WITH THE ASSESSEE) A.Y. 2007 08 21,43,324 2,24,57,08,387 2,24,35,65,063 SURCHARGE @ 10% 22,45,70,839 22,43,56,506 TOTAL TAX INCLUDING SURCHARGE 2,47,02,79,226 2,46,79,21,570 EDUCATION CESS @ 3% 7,41,08,377 7,40,37,647 TOTAL TAX AND SURCHARGE AND CESS 2,54,43,87,603 2,54,19,59,217 LESS: TDS CR THEREON U/S 199 2,12,73,90,045 2,31,59,75,721 41,69,97,558 22,59,83,496 LESS: RELIEF U/S 90/91 2,35,01,202 2,35,01,202 39,34,96,356 20,24,82,294 8 TATA COMMUNICATION LTD. (ASSESSMENT YEAR : 2008 09) LESS: ADVANCE TAX PAID 1,05,00,00,000 1,05,00,00,000 (65,65,03,644) (84,75,17,706) INTEREST TAX ADD: REFUND AS PER INTIMATION U/S 143(1) DT. 22.03. 2010 (RE CEIVED ON 31 .03. 2011) 74,40,63,870 7,97,21,124 66,43,42,746 74,40,63,870 8,75,60,226 (18,31,74,960) (10,34,53,836) INTEREST U/S 244A 01.04.2008 TO 31.03. 2011 @ 0.5% PM FOR 36 MONTHS 65,65,03,644 11,81,70,656 84,75,17,706 15,25,53,187 APRIL 2011 @ 0.5% PM FOR 1 MONTH 18,31,74,960 9,15,875 (3,06,10,430) (25,69,22,898) 12. THE ASSESSING OFFICER IS FURTHER DIRECTED TO VERIFY THE ABOVE CALCULATION AND WHILE DECIDING THE ISSUE PROPER OPPORTUNITY OF HEARING MAY BE PROVIDED TO THE ASSESSEE. ACCORDI N GLY, GROUND S NO.2 AND 3, RAISED ARE A LLOWED FOR STATISTICAL PURPOSES IN TERMS INDI CATED ABOVE. 13. IN THE RESULT, APPEAL STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24.03.2021 SD/ - C.N. PRASAD JUDICIAL MEMBER SD/ - S. RIFAUR RAHMAN ACCOUNTANT MEMBER MUMBAI, DATED: 24.03.2021 9 TATA COMMUNICATION LTD. (ASSESSMENT YEAR : 2008 09) COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI