S. 115JA(3), CBDT Circular No. 763, dated 18-2-1998 — Credit for MAT can be carried forward for a total of six years and not ‘five assessment years’ mentioned in sub-para 2 of para 45.4 of CBDT Circular No.763 — Statutory provisions prevail over a Circula

ITO v.
Data Software Research Company (International) Pvt. Ltd.

ITA No. 1602/Mds./2008

A.Y. : 2003-2004. Dated : 16-4-2009

 

Facts :

While assessing the total income of the assessee, a private
limited company, u/s.143(3) the AO had allowed credit for Rs.14,69,706 being
MAT paid in A.Y. 1997-98. Subsequently, the AO issued notice proposing to
withdraw MAT credit of Rs.14,69,706 by passing an order u/s.154. In response
to the show-cause notice the assessee contended that u/s.115JAA(3) MAT credit
can be set off for a period of 5 years immediately succeeding the assessment
year in which the credit became available. The AO did not accept this
contention and passed an order u/s.154 of the Act withdrawing tax credit of
A.Y. 1997-98 on the ground that u/s.115JAA the tax credit of A.Y. 1997-98 was
available for set-off only up to A.Y. 2002-03 and after that it cannot be set
off.

The CIT(A) allowed the assessee’s appeal.

Aggrieved, the Revenue preferred an appeal to the Tribunal.

Held :

The Tribunal held that there is no ambiguity in the
language of S. 115JAA(3). The carry forward is available for a total of six
(1+5) years. The Tribunal observed that the confusion has arisen because of
the language used in CBDT Circular No. 763, dated 18-2-1998. The Tribunal held
that the period of ‘five assessment years’ mentioned in sub-paragraph (2) of
paragraph 45.3 of the said Circular contradicts what is stated in Ss.(3) of S.
115JAA. The Tribunal stated that it is trite law that statutory provisions
prevail over a Circular in case of a contradiction between the two. The
Tribunal stated that this position has been reiterated by the Apex Court in
CCE v. Ratan Melting & Wire Industries Ltd., 220 CTR 98 (SC). The Tribunal
upheld the order of the CIT(A) and dismissed the appeal filed by the Revenue.