Appeal details
Counselvise Citation
[2020] 110 COUNSELVISE.COM (IT) 2595 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 3 month(s) 8 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
23-11-2020
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
B
Assessment Year
2012-2013
Appeal Filed On
14-08-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL (V I RTUAL COURT) , B BENCH MUMBAI BEFORE SHRI M.BALAGANESH, AM & SHRI RAM LAL NEGI , JM ITA NO. 5346 /MUM/ 20 17 ( ASSESSMENT YEAR : 2012 - 13 ) M/S. NETMAGIC IT SERVICES PVT. LTD., LIGHTHALL C BUILD ING, 7 TH FLOOR, HIRANANDANI BUSINESS PARK, SAKI VIHAR ROAD CHANDIVALI, MUMBAI 72 V S . DY. COMMISSIONER OF INCOME TAX 13(1)(1) MUMBAI PAN/GIR NO. AACCN2366D (APPELLANT ) . . (RESPONDENT ) ASSESSEE BY SHRI ANUJ KISNADWALA REVENUE BY SHRI OOMMEN THARIA N DATE OF HEARING 23 / 11 /2020 DATE OF PRONOUNCEMENT 23 / 11 /2020 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 5346/MUM/2017 FOR A.Y. 2012 - 13 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 21, MUMB AI IN APPEAL NO. CIT(A) - 21/DCIT - 13(1)(1)/IT - 94/2015 - 16 DATED 25/05/2017 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) DATED 28/02/2015 BY THE LD. DY. COMMISSIONER OF INCO ME TAX, CIRCLE - 13(1)(1), MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). ITA NO . 5346/MUM/2017 M/S. N ETMAGIC IT SERVICES P. LTD., 2 2. THE ONLY EFFECTIVE ISSUE TO BE DECIDED IN THIS APPEAL IS WITH REGARD TO THE SET OFF OF MAT CREDIT U/S.115JAA OF THE ACT. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS A VAILABLE ON RECORD. WE FIND THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF PROVIDING REMOTE INFRASTRUCTURE MANAGEMENT AND OTHER SERVICES TO ITS CUSTOMERS. THE RETURN OF INCOME FOR THE A.Y.2012 - 13 WAS FILED BY THE ASSESSEE ON 29/09/2012 DECLARING TOTAL INCOME OF RS.1,97,52,514/ - UNDER NORMAL PROVISIONS OF THE ACT AND RS.2,26,04,473/ - U/S.115JB OF THE ACT. THE ASSESSMENT WAS COMPLETED ACCEPTING THE RETURN ED INCOME OF THE ASSESSEE. HOWEVER, WHILE COMPUTING THE TAX LIABILITY, I.E. IN THE TAX COMPUTATION SHEET, THE LD. AO CALCULATED MA T CREDIT U/S.115JAA OF THE ACT AT RS.17,44,045/ - AS AGAINST RS.18,86,185/ - CLAIMED BY THE ASSESSEE. CONSEQUENTLY, INTEREST U/S.234C OF THE ACT WAS ALSO CHARGED BY THE LD. AO FOR THE DEFICIT IN TAX. THIS DIFFERENCE IN FIGURE AROSE BECAU SE OF THE FACT THE ASSESSEE COMPUTED THE DIFFERENCE IN TAX PAYABLE UNDER NORMAL PROVISIONS OF THE ACT AND TAX PAYABLE U/S.115JB OF THE ACT AFTER INCLUDING SURCHARGE AND EDUCATION CESS TO BE PART OF THE TAX. WHEREAS THE LD. AO COMPUTED THE SAME IGNORING SUR CHARGE AND EDUCATION CESS FROM THE TAX PORTION. 4 . TO ADDRESS THE DISPUTE BEFORE US EFFECTIVELY, THE FOLLOWING TABLE WOULD BE PERTINENT: - SR. NO. PARTICULARS AMOUNT (RS) AMOUNT (RS) 1. TAX UNDER NORMAL PROVISIONS 59,25,873 2. ADD: SURCHARGE AN D EDUCATION CESS 4,82,958 3. TAX UNDER NORMAL PROVISIONS INCLUDING SURCHARGE AND CESS 64,08,831 ITA NO . 5346/MUM/2017 M/S. N ETMAGIC IT SERVICES P. LTD., 3 4. TAX AS PER MAT 41,81,828 5. ADD: SURCHARGE AND EDUCATION CESS 3,40,818 6. TAX AS PER MAT INCLUDING SURCHARGE AND CESS 45,22,646 7. TAX (HIGHER OF SR. NO. 3 AND 6) 64,08,831 SR. NO. PARTICULARS AS PER RETURN OF INCOME AS PER ASSESSING OFFICER 10. TAX (SR. NO. 7) 64 ,08,831 64,08,831 11. LESS: MAT CREDIT 18,86,185 (SR. NO. 3 - 6) 17,44,045 (SR. NO. 1 - 4) 12. TO TAL TAX 45,22,646 46,64,786 5 . AS PER SECTION 115JAA(5), SET OFF IN RESPECT OF BROUGHT FORWARD MAT CREDIT SHALL BE ALLOWED FOR ANY ASSESSMENT YEAR TO THE EXTENT OF THE DIFFERENCE BETWEEN THE TAX ON TOTAL INCOME AND THE TAX WHICH WOULD HAVE BEEN PAYA BLE UNDER THE PROVISIONS OF SECTION 115JB OF THE ACT FOR THAT ASSESSMENT YEAR. 6 . WE FIND THAT THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. K. SRINIVASAN REPORTED IN 83 ITR 346 HAD CATEGORICALLY HELD THAT THE TERM TAX INCLUDES SURCHARGE. THE TERM EDUCATION CESS IS A RECENT PHENOMENON INTRODUCED IN THE STATUTE WHICH IS PREVALENT ONLY IN THE LAST TWO DECADES. HENCE, WE HOLD THAT FOR THE PURPOSE OF COMPUTATION OF MAT ITA NO . 5346/MUM/2017 M/S. N ETMAGIC IT SERVICES P. LTD., 4 CREDIT U/S.115JAA OF THE ACT, TAX PORTION HAS TO BE INCLUSIVE OF SURCHARGE AND EDUCA TION CESS AND ACCORDINGLY, THE COMPUTATION MADE BY THE ASSESSEE IN ITS RETURN OF INCOME IN RESPECT OF MAT CREDIT IS CORRECT. 7 . IN ANY CASE, WE FIND THAT ASSESSEE BEING A COMPANY HAD FILED ITS RETURN OF INCOME IN ITR - 6 (I.E. PRESCRIBED FORM) UNDER SC HEDUL E FOR MAT CREDIT (S CHEDULE MATC ) , THE ASSESSEE IS PRECLUDED FROM FILLING UP ANY FIGURE AS THEY ARE AUTOMATICALLY PICKED FROM YET ANOTHER SCHEDULE IN THE SAME ITR FORM I.E. 1D OF PART - BTT1 AND 5 OF PART - B - TT1 , WHEREIN THE FIGURES MENTIONED THEREON , REPRESE NT TAX PAYABLE UNDER NORMAL PROVISIONS AND U/S.115JB OF THE ACT RESPECTIVELY , WHICH IS ADMITTEDLY INCLUSIVE OF SURCHARGE AND EDUCATION CESS. HENCE, THERE IS ABSOLUTELY NO SCOPE FOR IGNORING SURCHARGE AND EDUCATION CESS FOR THE PURPOSE OF COMPUTING MAT CRED IT U/S.115JAA OF THE ACT. IT IS A WELL KNOWN FACT THAT THE ITR RETURN FORM IS A FORM PRESCRIBED BY CBDT AND THE REVENUE IS BOUND TO FOLLOW THE SAME. 8 . IN VIEW OF THE AFORESAID OBSERVATIONS, WE FIND LOT OF FORCE IN THE ARGUMENT ADVANCED BY THE LD. AR AND ACCORDINGLY, ALLOW THE GROUNDS RAISED BY THE ASSESSEE. WITH REGARD TO MAT CREDIT U/S.115JAA OF THE ACT AND DIRECT THE LD. AO TO ACCEPT THE WORKING GIVEN BY THE ASSESSEE AS PER THE RETURN OF INCOME. ITA NO . 5346/MUM/2017 M/S. N ETMAGIC IT SERVICES P. LTD., 5 9 . THE GROUNDS RAISED WITH REGARD TO CHARGING OF INTEREST U/S.234C OF THE ACT SHOULD ALWAYS BE ON RETURNED INCOME AND NOT O N ASSESSED INCOME AS IT IS A SETTLED LAW. ACCORDINGLY, THE GROUND NO.2 RAISED BY THE ASSESSEE IS ALSO ALLOWED. 10 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 23 / 11 /2020 IN THE OPEN COURT. ( RAM LAL NEGI ) (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 23 / 11 / 2020 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : 1 . THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// ITA NO . 5346/MUM/2017 M/S. N ETMAGIC IT SERVICES P. LTD., 6 BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI DATE INITIAL 1. DRAFT DICTATED ON 23/11/2020 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 23/11/2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBE R. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 11. DICTATION PAD IS ENCLOSED YES
