Intas Pharmaceuticals Ltd., Ahmedabad V. The DCIT, Central Circle-2(1), Ahmedabad

MA 10/AHD/2018

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 1574 (ITAT-AHMEDABAD)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-01-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 04-01-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: LALIT JAIN
• Assessee Lawyers: P M MEHTA
• Keywords: Maximum Marginal Rate
• Section: 201; 254(2); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE: SHR I MAHAVIR PRASAD , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER INTAS PHARMACEUTICAL LTD. 230, CHINUBHAI CENTRE, NR. NEHRU BRIDGE, ASHRAM ROAD, AHMEDABAD - 380009 PAN: AAAC15120L (APPELLANT) VS THE D CIT, CIRCLE - 2( 1 ) , AHMEDABA D (RESPONDENT) REVENUE BY : S H RI LALIT JAIN , SR. D . R. ASSESSEE BY: SHRI P.M. MEHTA, A.R. DATE OF HEARING : 07 - 12 - 2 018 DATE OF PRONOUNCEMENT : 02 - 01 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THE ASSESSEE HAS FILED MISCELLANEOUS APPLICATION DATED 22 ND DECEMBER, 2017 AGAINST THE ORDER OF ITAT VIDE ITA NO. 1740/AHD/2014. THE ASSESSEE HAS MENTIONED IN THE APPLICATION THAT THERE WAS A MISTAKE APPARENT FROM THE RECORD IN THE AFORESAID ORDER STATING THAT SUBMISSION S MADE BY THE ASSESSEE ON 12 TH JULY, 2017 HAVE NOT BEEN CONSIDERED. THE SUBMISSION REFERRED BY THE LD. COUNSEL IS REPRODUCED AS UNDER: - '1.6 WITHOUT PREJUDICE TO THE ABOVE, WE WOULD L IKE TO POINT OUT TO YOUR HONORS THAT INCOME TAX AND SURCHARGE ARE SEPARATE CHARGES AND WHEREVER THE RATE OF INCOME TAX IS TO BE INCLUSIVE OF SURCHARGE, A SPECIFIC MENTION HAS BEEN MADE IN THE RELEVANT PROVISIONS. FOR E.G. AS UNDER: - IN THE DEFINITION OF MA XIMUM MARGINAL RATE GIVEN IN SECTION 2(29)(C) OF THE ACT, THE MAXIMUM MARGINAL RATE IS DEFINED AS UNDER: - M.A. NO. 10/AHD/ 2018 (ARISING OUT OF I T A NO . 1740 / A HD/20 14 ) A SS ESSMENT YEAR 2010 - 11 M.A. NO. 10/AHD/2018 (IN I.T.A NO. 1740 /AHD/20 14 ) A.Y. 2010 - 11 PAGE NO . INTAS PHARMACEUTICAL LTD. VS. DC IT 2 (29.C] 'MAXIMUM MARGINAL RATE' MEANS THE RATE OF INCOME - TAX (INCLUDING SURCHARGE ON INCOME - TAX, IF ANY) APPLICABLE IN RELATION TO THE HIGHEST \ SLAB O F INCOME IN THE CASE OF AN INDIVIDUAL ASSOCIATION OF PERSONS OR, AS THE CASE MAY BE, BODY OF INDIVIDUALS] AS SPECIFIED IN THE FINANCE ACT OF THE RELEVANT YEAR; FROM THE ABOVE DEFINITION, YOUR HONORS WILL APPRECIATE THAT THE MAXIMUM MARGINAL RATE MEANS RATE OF INCOME TAX INCLUDING SURCHARGE ON INCOME TAX. IN THE PRESENT CASE BEFORE YOUR HONORS, THE MAT CREDIT U/S. 115JA IS TO BE GIVEN ONLY ON THE INCOME TAX WORKED OUT AS PROVIDED IN THAT SECTION BUT IF YOUR HONORS ARE OF THE VIEW THAT THE TAX IS INCLUSIVE OF SURCHARGE, YOUR HONORS MAY DIRECT THE A.O. THAT THE MAT CREDIT TO BE GIVEN IN ASSESSEE'S CASE SHALL ALSO BE INCREASED BY THE AMOUNT OF SURCHARGE AND EDUCATION CESS APPLICABLE TO THE SAID INCOME TAX AMOUNT. BEFORE THE LD. CIT(A), THE ASSESSEE HAD GIVEN WRI TTEN SUBMISSIONS ALONG WITH THE STATEMENT GIVING MAT CREDIT ALLOWABLE TO THE ASSESSEE, CALCULATED ON THE BASIS OF INCLUSIVE OF SURCHARGE AND EDUCATION CESS FOR THE EARLIER YEARS. THE SAID STATEMENT ALONG WITH THE WRITTEN SUBMISSIONS FILED BEFORE THE LD. CI T(A] IS ATTACHED HEREWITH AND AS PER THE SAID STATEMENT, THE ASSESSEE WOULD BE ENTITLED TO MAT CREDIT OF RS. 11,11,67,334 AS AGAINST RS. 9,84,42,398 CLAIMED BY THE ASSESSEE.' THE ASSESSE HAS ALSO RAISED THE POINT THAT THE ISSUE HAS BEEN SOLELY DECIDED ON THE BASIS OF THE DECISION OF THE HON BLE CALCUTTA HIGH COURT IN THE CASE OF SERI INFRASTRUCTURE FINANCE LTD. THE ASSESSEE HAS RETREATED THAT MAT CREDIT HAS TO BE ALLOWED AGAINST TAX BEFORE SURCHARGE AND EDUCATION CESS . 2. DURING THE COURSE OF APPEL LATE PROCEEDINGS THE LD. COUNSEL HAS MADE THE SIMILAR SUBMISSION AS STATED ABOVE. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE HAS VEHEMENTLY CONTENDED THAT ITAT HAS PASSED DETAILED SPEAKING ORDER AFTER HEARING BOTH TH E SIDES HOLDING THAT AMOUNT OF SURCHARGE AND CESS HAVE TO BE TAKEN IN TO ACCOUNT BEFORE PROVIDING MAT CREDIT U/S 115JAA OF THE ACT. 3 . WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD CAREFULLY. IN THIS CONNECTION , WE FIND THAT VIDE ABOVE STATED ORDER OF ITAT 1740/AHD/2014 THE IMPUGNED ISSUE HAS BEEN ADJUDICATED BY TAKING IN TO CONSIDERATION THE SUBMISSIONS FILED BY THE ASSESSEE AND THE REVENUE, LEGAL FINDINGS AND RELEVANT PROVISION OF LAW. THE RELEVANT PART OF TH E FINDINGS OF THE ORDER OF ITAT 1740/AHD/2014 DATED 26/9/2017 IS REPRODUCED AS UNDER: - M.A. NO. 10/AHD/2018 (IN I.T.A NO. 1740 /AHD/20 14 ) A.Y. 2010 - 11 PAGE NO . INTAS PHARMACEUTICAL LTD. VS. DC IT 3 WE HAVE OBSERVED THAT THE LD. CIT(A) HAS DECIDED THE MATTER ON THE BASIS FROM NO. ITR - 6 BY PRESUMING THAT INCOME TAX PAYABLE IS TO BE ARRIVED AT BY DEDUCTING THE CR EDIT UNDER SECTION 115JAA OF THE ACT (UNDER ENTRY 3) FROM THE GROSS TAX PAYABLE (UNDER ENTRY 4). WE ARE NOT INCLINED WITH DECISION OF THE LD.CIT(A) IN VIEW OF SPECIFIC PROVISION OF THE FINANCE ACT, 2010 WHICH HAS BEEN ELABORATED AS SUPRA IN THIS ORDER. THE RATE OF INCOME TAX AND SURCHARGE ARE CHARGED FROM YEAR TO YEAR AS PRESCRIBED IN THE FINANCE ACT. WE ARE OF THE CONSIDERED VIEW THAT THE FINANCE ACT IS A PART OF THE INCOME TAX ACT FOR THE PURPOSE OF DETERMINING THE RATE OF INCOME TAX TO BE CHARGED FRO M YEAR TO YEAR. THE PROVISION OF SECTION 2(1) OF THE FINANCE ACT 2010 READ AS UNDER: - 2. (1) SUBJECT TO THE PROVISIONS OF SUB - SECTIONS (2) AND (3), FOR THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL, 2010, INCOME - TAX SHALL BE CHARGED AT THE RATES SPECIFIED IN PART I OF THE FIRST SCHEDULE AND SUCH TAX SHALL BE INCREASED BY A SURCHARGE, FOR PURPOSES OF THE UNION, CALCULATED IN EACH CASE IN THE MANNER PROVIDED THEREIN WE HAVE NOT FIND ANY AMBIGUITY IN THE AFO RESAID CRYSTAL CLEAR PROVISION OF LEVYING SURCHARGE AS PROVIDED IN THE FINANCE ACT . WE HAVE NOT DISCERNED ANY OTHER SPECIFIC PROVISION IN THE ACT WHICH READS THAT THE MAT CREDIT U/S. 115JAA HAS TO BE PROVIDED BEFORE COMPUTING SURCHARGE AND CESS ON THE T AXABLE INCOME OF THE ASSESSEE. WE HAVE NOTICED THAT THE TAX ON THE TOTAL INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION IS DETERMINED AT RS. 25,46,74,428/ - AS AGAINST THE SAME THE ASSESSEE CLAIMED THAT THE SAME SHOULD BE DETERMINED AT RS. 19,47,11,533/ - ON THE GROUND THAT MAT CREDIT TO BE PROVIDED BEFORE CHARGING OF SURCHARGE AND EDUCATION CESS. WE ARE OF THE VIEW THAT THERE IS NO PROVISION IN THE ACT WHICH PROVIDE THIS KIND OF SPECIAL INCENTIVE OF RS. 5,99,62,895/ - IN THE CASES WHERE IN THE ASSESEE HAS PAID MAT IN THE PRECEDING YEARS. WE FIND THAT THE MAT CREDIT U/S. 115JAA IS ONLY A TAX CREDIT WHICH SHALL BE ALLOWED TO BE SET OFF IN A YEAR WHEN TAX BECOME PAYABLE ON THE TOTAL INCOME COMPUTED IN SUBSEQUENT YEAR ACCORDING TO THE RATE OF INCOME TAX INCLUDING SURCHARGE AND EDUCATION CESS AS PER THE PROVISION OF FINANCE ACT WHICH IS A PART OF THE INCOME TAX ACT. IN VIEW OF THE AFORESAID FACTS AND CIRCUMSTANCES WE FIND THERE IS NO REASON THAT SURCHARGE AND CESS CAN BE EXCLUDED FROM THE DE TERMINATION OF THE TAX IN VIEW OF THE SPECIFIC PROVISIONS OF THE FINANCE ACT, 2010 AS ELABORATED SUPRA IN THIS ORDER. THE HON BLE HIGH COURT S CALCUTTA IN ITS PRONOUNCEMENT ON THE IDENTICAL ISSUE AS ELABORATED SUPRA IN THIS ORDER HELD THAT THE DECISION OF THE LD. CIT(A) TO REDUCE CREDIT U/S. 115JAA WITHOUT INCLUDING THE SURCHARGE AND EDUCATION CESS SIMPLY ON THE BASIS OF THE ITR FORM NO. 6 IS ERRONEOUS. IT WAS ALSO MENTIONED THAT SUCH NATURE OF ERROR OCCURRED IN THE ITR FORM FOR ASSESSMENT YEAR 200 8 - 09 WHICH WAS CORRECTED IN THE SUBSEQUENT YEAR IN THE ITR FORM OF ASSESSMENT YEAR 2012 - 13. IT IS HELD BY THE HON BLE HIGH COURT THAT THE WRONG FORM OF ITR - 6 WAS WRONG AND NATURALLY CONTRARY TO LAW. AFTER CONSIDERING THE FACTS OF THE CASE AND LAW, THE JUDICIAL FINDINGS AS LAID DOWN IN THE JUDICIAL PRONOUNCEMENTS AS SUPRA WE CONSIDERED THAT IN ASCERTAINING THE LIABILITY OF TAX FOR THE YEAR UNDER CONSIDERATION THE AMOUNT OF SURCHARGE AND CESS HAVE TO BE TAKEN INTO ACCOUNT BEFORE PROVIDING MAT CREDIT U/S. 115JAA OF THE ACT. IN VIEW OF ABOVE WE ARE NOT INCLINED WITH THE DECISION OF THE LD.CIT(A) AND WE ALSO DO NOT FIND ANY MERIT IN THE ALTERNATIVE PLEA OF THE ASSESSEE, THEREFORE THE APPEAL OF THE REVENUE IS ALLOWED. AFTER PERUSAL OF THE MISCELLANEOUS PETITION AND THE FINDINGS AS ELABORATED IN THE ITA 1740/AHD/2014 DATED 10/10/2017 I T IS OBSERVED THAT THERE IS NOT ANY SPECIFIC APPARENT MISTAKE APPARENT FROM RECORD WHICH WAS NOT CONSIDERED BY THE BENCH WHILE ADJUDICATING THE APPEAL OF THE ASSESSEE. THE ASSESSEE HAS AGAIN REITER ATED THE SAME ISSUE THAT INCOME TAX AND SURCHARGE ARE M.A. NO. 10/AHD/2018 (IN I.T.A NO. 1740 /AHD/20 14 ) A.Y. 2010 - 11 PAGE NO . INTAS PHARMACEUTICAL LTD. VS. DC IT 4 SEPARATE CHARGES AND STATED THAT ASSESSEE WOULD BE ENTITLED MAT CREDIT OF RS. 111167334/ - AS AGAINST RS. 98442398/ - CLAIMED BY THE ASSESSEE. AFTER GOING THROUGH THE MISC. A PPLICATION OF THE ASSSESSEE IN THE LIGHT OF THE ABOVE FINDINGS WE OBSERVE IT IS PERTINENT TO MENTION THAT THE POWER OF RECTIFICATION UNDER SECTION 254(2) OF THE ACT CAN BE EXERCISED ONLY WHEN THE MISTAKE WHICH IS SOUGHT TO BE RECTIFIED IS AN OBVIOUS PATENT MISTAKE, WHICH IS APPARENT FROM THE RECORD AND NOT A MISTAKE WHICH IS REQUIRED TO BE ESTABLISHED BY ARGUMENTS AND LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. IN VIEW OF THE ABOVE AND AFTER CONSIDERING THE DET AILED FINDINGS OF THE CO - ORDINATE BENCH IN THE CASE OF THE ASSESSEE, WE DO NOT FIND ANY MERIT IN THE MISC. APPLICATION OF THE ASSESSEE, THEREFORE, THE SAME IS DISMISSED. 4. IN THE RESULT, THE MISC. APPLICATION OF THE ASSESSEE IS DISM ISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 02 - 01 - 201 9 SD/ - SD/ - ( MAHAVIR PRASAD ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 02 /01/2019 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,