Section 115JAA – Reliance by the assessee on ITR-6 format to arrive at the total liability as well as MAT credit calculations, for payment of tax, is proper. Addition made by the AO by making calculations applying his own interpretation which is not in line with ITR 6 needs to be deleted.
Facts
The assessee company filed its return of income for assessment year 2012-13 on 30.11.2012 admitting a total income of Rs. 42,87,89,690. The return of income was processed by CPC, Bangalore u/s. 143(1) raising a demand of Rs. 32,06,700. The difference in computation of tax by the assessee and the AO was on account of the Assessing Officer (AO) computing MAT credit without including surcharge and education cess while arriving at the amount of tax payable under normal provisions of the Act and u/s. 115JB of the Act.
Aggrieved, the assessee preferred an appeal to the CIT(A) who relying on the decision of the Tribunal in the case of Richa Global Exports Pvt. Ltd. confirmed the action of the AO.
Aggrieved, the assessee preferred an appeal to the Tribunal.
Held
The Tribunal held that as per section 115JAA(2A), tax credit to be allowed shall be the difference of tax paid for any assessment year under sub-section (1) of section 115JB and the amount of tax payable on his total income computed in accordance with the other provisions of the Act. The important word used is tax paid and as per the Hon’ble Apex Court decision in the case of K. Srinivasan vs. CIT [1972] 83 ITR 346 (SC), the term `tax’ includes surcharge.
The Tribunal observed that sub-section (5) of section 115JAA grants set off in respect of brought forward tax credit to the extent of the difference between tax on his total income and the tax which would have been payable u/s 115JB, as the case may be for that assessment year. It noted that the term used is `tax’ and not `income-tax’ or any other term. It held that the term `tax’ includes surcharge.
The Tribunal noted that the provisions of sub-section (5) of section 115JAA are applied in ITR-6. It observed that ITR-6 form is designed and approved by the apex body CBDT and this form is universally used by all the company assessees. It observed that these are standard forms which are expected to be followed by all the assessees. It noted that the format of ITR-6 was amended w.e.f. AY 2012-13 by CBDT. It held that the AO cannot overlook these formats and (interpret in his own method of calculating tax credit while making assessment u/s. 143(1) of the Act) proceed to calculate the MAT credit to compute assessment u/s. 143(1) applying different methods when the proper and correct method is proposed by CBDT in ITR-6. The AO is expected to follow ITR-6 format to complete the assessment u/s. 143(1) or 143(3) of the Act.
As regards the decision of the Delhi Bench of ITAT in the case of Richa Global Exports Pvt. Ltd., the Tribunal held that the decision of Apex Court in the case of K. Srinivasan may not have been brought to the knowledge of the Delhi Bench.
It noted that earlier judgments in the cases of Universal Medicare, Valmet India and Wyeth Limited were decided relying on ITR-6 as applicable in those assessment years. Applying the ITR-6 format, which was applied by the assessee as well, the Tribunal deleted the addition made.
This ground of appeal filed by the assessee was allowed.
