ACIT, Central Circle- 18, New Delhi V. Lalit Mahajan, New Delhi

ITA 6936/DEL/2018

AI Insights

The case revolves around the dispute concerning the adjustment of Surcharge and Education Cess while computing the Minimum Alternate Tax (MAT) credit for the assessment year 2016-17. The Assessee, Lalit Mahajan, had initially declared a substantial income, which was accepted in the first instance under section 143(1) of the Income-tax Act. However, the Assessing Officer later reduced the credit for tax paid under section 115JD, excluding Surcharge and Education Cess. The Assessee contested this adjustment, leading to an appeal before the Commissioner of Income-tax (Appeals), who ruled in favor of the Assessee. The Revenue Department then appealed to the Income Tax Appellate Tribunal, which upheld the Commissioner’s decision, referencing judgments from the Delhi ITAT and the Calcutta High Court that supported the inclusion of Surcharge and Education Cess in the MAT credit calculation.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 116265 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 11-12-2022
• Assessment Year: 2016-2017
• Appeal Filed On: 31-10-2018
• Other Referred Cases: Consolidated Securities Ltd. vs ACIT, M/s. Srei Infrastructure Finance Ltd vs ACIT, CIT vs. K. Srinivasan
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(1); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’ NEW DLEHI BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI N.K. CHOUDHRY, JUDICIAL MEMBER ITA No. 6936/Del/2018 Assessment Year: 2016-17 ACIT, Central Circle-18, New Delhi VersuS Lalit Mahajan, A-108, Okhla Industrial Area, Phase-I, New Delhi. PAN: AAAPM2952K (Appellant) (Respondent) Appellant by : Sh. Mukesh Gupta, Ld. C.A. & Ms. Neha Gupta, Ld. C.A. Respondent by : Sh. Jeetender Chand, Ld. Sr. DR Date of hearing : 12.12.2022 Date of order : 04.01.2023 ORDER PER BENCH: This appeal has been preferred by the Revenue Department against the order dated 24.08.2018, impugned herein, passed by the learned Commissioner of Income-tax (Appeals)-27, New Delhi (in short “Ld. Commissioner”) u/s. 250 of the Income-tax Act, 1961 (in short ‘the Act’) for the assessment years 2016-17. ITA No. 6936/Del/2018 2 2. In this case, the Assessee by filing its return of income on dated 17.10.2016, declared an income of Rs.89,98,21,770/-, which was processed u/s. 143(1) of the Act and accordingly, an intimation u/s. 143(1) dated 09.06.2017 was sent to the Assessee, whereby the income declared by the Assessee was accepted. However, the credit of tax paid u/s. 115JD of the Act was reduced from 6,70,15,431/- to Rs.5,80,92,435/- on the ground that surcharge and education cess are not adjustable while giving the MAT credit of earlier years. 3. The Assessee being aggrieved challenged the said adjustment made by the Assessing Officer, before the ld. Commissioner who vide impugned order allowed the appeal of the Assessee by holding as under: 5. The Ground Nos. 1 to 2.2 pertain to MAT credit of Surcharge and Education Cess not allowed by AO to be adjusted during the year under consideration. During the appellate proceedings, appellant has explained the facts, reproduced the legal provisions of relevant sections and relied on the recent judgment of Hon'ble ITAT Delhi in the case of Consolidated Securities Ltd. vs ACIT in ITA No. 3739/D/2015 dated 26.07.2018 wherein it is held that Surcharge and Education Cess ought to be allowed in total from the amount of tax computed after loading it with the amount of Surcharge or Education Cess. The appellant has also relied on several other judgments of different Courts as mentioned in its ITA No. 6936/Del/2018 3 submissions wherein it is held that the income-tax includes Surcharge and Education Cess. 5.1 I have considered the facts of the issue and submissions of appellant. The issue that MAT credit u/s 115JAA r.w. section 115JB of the Act on account of Surcharge and Education Cess should be allowed or not, has been dealt with by Hon'ble Calcutta High Court in the case of M/s. Srei Infrastructure Finance Ltd wherein identical issue emerged and Hon'ble Court held that MAT credit u/s 115JAA brought forward from earlier years is to be set off against tax on total income after taking into account the amount of Surcharge and Education Cess. Hon'ble ITAT Delhi has also followed the ratio of Hon'ble Court in its decision in the case of Consolidated Securities Ltd. vs ACIT (supra) holding that the Surcharge and Education Cess has to be included while giving credit of the total tax amount paid by assessee. Since the issue is covered by the decisions of Hon'ble High Court of Calcutta and ITAT Delhi, the stand taken by AO of not giving credit of the amount of Surcharge and Education Cess against the income computed during the year under consideration as per provision of section 115JD of the Act, is not justified. I, therefore, direct the AO to allow the said credit on account of Surcharge and Education Cess while computing the income under MAT provisions for the year under consideration. The ground taken by appellant is allowed.” 4. The Revenue Department being aggrieved, preferred the instant appeal. 5. The ld. DR in support of its case, emphasised that the ld. Commissioner decided the issue qua surcharge and education cess as involved in the instant case on the basis of the judgment of jurisdictional Tribunal in the case of Consolidated Securities Ltd. vs. ACIT (ITA No. ITA No. 6936/Del/2018 4 3739/Del/2015) dated 26.07.2018 and the judgment passed by Hon’ble Calcutta High Court in the case of Srei Infrastructure Finance Ltd., whereas it is a fact that the aforesaid judgments have been passed in the case of the companies and not in individual case, as involved in the instant case. Therefore, the said judgments are not applicable to the instant case. 6. On the contrary, ld. AR submitted that the spirit of the provisions have to be taken into consideration, but not the persons. 7. We have given thoughtful consideration to the facts and circumstances of the case and observe that the ld. Commissioner not only considered the judgments referred to above, but also perused the legal provisions of the relevant sections and the factual aspects of the case and then only decided the issue qua credit of surcharge and education cess in the income of the Assessee. Even otherwise, Hon’ble Apex Court in the case of CIT vs. K. Srinivasan (1972) 83 ITR 346(SC) clearly held that income tax would include surcharge and additional surcharge. Even otherwise we do not find any reason and/or material to contradict the findings of the ld. Commissioner and hence considering the spirit of the provisions of Act as applicable to the instant case, are inclined not to interfere in the impugned order. ITA No. 6936/Del/2018 5 8. In the result, the appeal filed by the Revenue stands dismissed. Order pronounced in the open court on 04/01/2023. Sd/- Sd/- ( ANIL CHATURVEDI) (N.K. CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER *aks/-