ASSISTANT COMMISSIONER OF INCOME TAX-3(2)(2), MUMBAI V. M/S. ND CALLUS INFOR SERVICE PVT. LTD, MUMBAI

ITA 5029/MUM/2019

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 7790 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 31-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 72

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘B‘ BENCH MUMBAI BEFORE: SHRI M.BALAGANESH, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA No.5029/Mum/2019 (Assessment Year :2011-12) ACIT- 3(2)(2) Room No.674, 6 th Floor Aayakar Bhavan M.K.Road, Mumbai – 400 020 Vs. M/s. Omega Telecom Holdings Pvt Ltd., (Earlier known as ND Callus Info Service Pvt. Ltd., 127, Maker Chamber-III Nariman Point, 230, Nariman Point, Mumbai – 400 021 PAN/GIR No.AACCN1038N –OMEGA Telecom Holdings Pvt. Ltd., PAN/GIR No.AACCN1038N –ND Callus Info Service Pvt. Ltd, (Appellant) .. (Respondent) Revenue by Shri Sanjiv K. Jain Assessee by Shri Ajith Kumar Jain Date of Hearing 17/11/2021 Date of Pronouncement 24/11/2021 आदेश / O R D E R PER M. BALAGANESH (A.M): This appeal in ITA No.5029/Mum/2019 for A.Y.2011-12 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-8, Mumbai in appeal No.CIT-8/IT-10009/18-19 dated 13/05/2019 (ld. CIT(A) in ITA No.5029/Mum/2019 M/s. ND Callus Infor Services Pvt. Ltd., 2 short) against the order of assessment passed u/s.154 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 12/03/2018 by the ld. Dy. Commissioner of Income Tax 3(2)(2), Mumbai (hereinafter referred to as ld. AO). 2. The only issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in holding that the set off of MAT credit u/s.115JAA of the Act brought forward from earlier years against tax on total income including surcharge and education cess instead of adjusting the same from tax on total income before charging such surcharge and education cess. 3. We have heard rival submissions and perused the materials available on record. We find that assessment for the A.Y.2011-12 was completed u/s.143(3) of the Act by the ld. AO on 29/01/2014 accepting the returned income of Rs. Nil. In the said assessment, no computation of income u/s.115JB of the Act was made by the ld. AO. However, in the intimation u/s.143(1) of the Act dated 13/01/2012, the CPC, Bangalore had indeed computed the income u/s.115JB of the Act at Rs.139,95,04,355/- and had determined the total tax payable under MAT at Rs.27,89,28,216/- which is inclusive of surcharge and education cess. Against this tax payable, the assessee had indeed paid advance tax of Rs.28,39,53,100/- which was given due credit in the said intimation u/s.143(1) of the Act and ultimately the net refund of Rs.4,176/- was determined by CPC, Bangalore while computing the tax payable u/s.115JB of the Act. Since, no income was computed u/s.115JB of the Act by the ld. AO in the assessment order framed u/s.143(3) of the Act dated 29/01/2014, the said assessment was subjected to suomoto rectification by the ld. AO and accordingly order u/s.154 of the Act was passed by the ITA No.5029/Mum/2019 M/s. ND Callus Infor Services Pvt. Ltd., 3 ld. AO on 12/03/2018 wherein he identified the fact that MAT credit carried forward by the assessee was Rs.27,89,28,216/- which is inclusive of surcharge of Rs.1,88,93,309/- and education cess of Rs.81,24,123/-. The ld. AO observed that assessee is entitled for set off of MAT credit with the income tax payable under normal provisions of the Act only in respect of tax portion thereon and that the surcharge and education cess embedded in the MAT credit would not be eligible for set off. Accordingly, he withdrew the benefit of MAT credit to be carried forward to the extent of Rs.2,70,17,432/- (Rs.1,88,93,309 + 81,24,123). The ld. CIT(A) by placing reliance on the decision of the Hon’ble Allahabad High Court in the case of Vacment India Ltd., reported in 369 ITR 304 and the decision of Mumbai Tribunal in the case of SI Group India Pvt. Ltd., in ITA Nos. 2348 & 2350/Mum/2017 dated 11/10/2018, held that surcharge and education cess are part of income tax and that the MAT credit eligible to be carried forward would certainly include surcharge and education cess also in addition to the tax. Aggrieved by this action, the Revenue is in appeal before us. 3.1. The ld. DR before us vehemently argued that the ld. CIT(A) had granted relief ignoring the provisions of the Act but had instead gone by the relevant columns in the Income Tax Return Form-6 (ITR-6). He also placed reliance on the decision of the Hon’ble Calcutta High Court in the case of SREI Infrastructure Finance Ltd., vs. DCIT reported in 72 Taxmann.com 239 dated 12/08/2016. But from the perusal of the order of the ld. CIT(A), we find that what is stated by the ld. DR with regard to placing reliance on the ITR-6 form was not done by the ld. CIT(A) and that the reliance placed on the relevant columns of ITR-6 was done by the Hon’ble Allahabad High Court in the case referred to supra which had been relied upon by the ld. CIT(A). Moreover, we find that the decision ITA No.5029/Mum/2019 M/s. ND Callus Infor Services Pvt. Ltd., 4 relied upon by the ld. DR on the Hon’ble Calcutta High Court in the case referred to supra is actually completely in favour of the assessee. We find that this issue is no longer res integra in view of the decision of the Hon’ble Calcutta High Court in the case of SREI Infrastructure Finance Ltd., vs. DCIT reported in 395 ITR 291 and the decision of Hon’ble Allahabad High Court in the case of CIT vs. Vacment India reported in 369 ITR 304 wherein it was categorically held that surcharge and education cess are part of income tax. These High Court decisions were followed by series of the Tribunal decisions across the country and hence, this issue is no longer res integra. Respectfully following the aforesaid decisions, we hold that for the purpose of MAT credit to be carried forward to subsequent years, tax portion should include surcharge and education cess. Respectfully following the same, we do not find any infirmity in the order of the ld. CIT(A granting relief to the assessee. Accordingly, the grounds raised by the Revenue are dismissed. 4. In the result, appeal of the Revenue is dismissed. Order pronounced on 24/11/2021 by way of proper mentioning in the notice board. Sd/- (PAVAN KUMAR GADALE) Sd/- (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated 24/11/2021 KARUNA, sr.ps ITA No.5029/Mum/2019 M/s. ND Callus Infor Services Pvt. Ltd., 5 Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. The CIT(A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy//