Court
HIGH COURT OF BOMBAY
Brief
The fact of the case is the transfer of employee from one place to another place. The Petitioner/management has always a right and power to transfer the employees from one place to another, subject to contingencies and the requirement. However, this, in no way, be read to mean that the employees and workers just cannot challenge such transfer orders in any circumstances. The Court also in no way debars entertaining and/or considering such application even for interlocutory order and/or protection. It depends upon the facts and circumstances of each case. There cannot be a strict jacketed formula to say that no Court should interfere with the transfer order initiated by the management, at any point of time. The employer/employee relationship as based upon the contract, therefore, there are always so called disputes and conflicts, some time defined or some time undefined.
Citation
Larsen and Toubro Limited, a Company registered under the Companies Act, 1956 having its office at Powai Campus, Saki Vihar Road, Mumbai 400072 .... Petitioner Vs. 1. Antony Jokim Patekar, adult, Indian Inhabitant, residing at 202, Sarovar, Vasant Complex Coop. Hsg.Soc. Ltd., Near Kalpravruksh Building, Link Road Signal, Extn: Mahavir Nagar, Kandivali (West), Mumbai 400067. 2. The President, Industrial Court, Bandra, Mumbai 400051. .... Respondents
Judgement
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
APPELLATE SIDE CIVIL JURISDICTION
WRIT PETITION NO. 8215 OF 2012
Larsen and Toubro Limited,
a Company registered under the
Companies Act, 1956 having its office at
Powai Campus, Saki Vihar Road,
Mumbai 400072 .... Petitioner
Vs.
1. Antony Jokim Patekar,
adult, Indian Inhabitant,
residing at 202, Sarovar,
Vasant Complex Coop.
Hsg.Soc.
Ltd., Near Kalpravruksh Building,
Link Road Signal, Extn: Mahavir Nagar,
Kandivali (West), Mumbai 400067.
2. The President, Industrial Court, Bandra,
Mumbai 400051. .... Respondents
Mr. J. P. Cama, Senior Advocate with Ms.Madhavi DeshpandeRavuri for the petitioner.
Mr.S.S.Pakale with Mr. Avinash Belge for respondent no.1.
CORAM: ANOOP V. MOHTA, J.
DATE: August 28, 2012
ORAL JUDGMENT:
Heard finally by consent of parties.
2. The Petitioner/management has challenged the impugned interlocutory order dated 26 July 2012 passed by the learned Industrial Court, Mumbai, thereby stayed/kept in abeyance the transfer order dated 10 May 2012 issued by them, transferring Respondent no.1 to Security Department.
3. Admittedly the main complaint is still pending. The learned Industrial court by impugned order dated 26 July 2012 has allowed the Interlocutory Application filed by Respondent no.1/complainant in the following terms:
“i) Application is allowed.
ii) It is hereby prima facie held and declared that the
Respondents have engaged in and engaging in unfair labour practice under items 3, 9 and 10 of Sch. IV of the Act.
iii)The transfer order dated 10.5.2012 issued by the Respondents is kept in abeyance and the Respondents are directed to allow the Applicant to work at Powai Works on\ his earlier post as a skilled employee, pending the hearing and final disposal of the Main Complaint.
iv)Costs into the cause.”
4. The Petitioner/management has always a right and power to transfer the employees from one place to another, subject to contingencies and the requirement. However, this, in no way, be read to mean that the employees and workers just cannot challenge such transfer orders in any circumstances. The Court also in no way debars entertaining and/or considering such application even for interlocutory order and/or protection. It depends upon the facts and circumstances of each case. There cannot be a strict jacketed formula to say that no Court should interfere with the transfer order initiated by the management, at any point of time. The employer/employee relationship as based upon the contract, therefore, there are always so called disputes and conflicts, some time defined or some time undefined.
5. The learned senior counsel appearing for the Petitioner, referring to various averments made in the Petition, including Settlement/Voluntary Retirement Scheme (VRS) and facts and circumstances of the case, pointed out that there is no question of interference by the Court in such transfer orders which was made not only against Respondent No.1 but along with other persons also. The challenge is raised by Respondent No.1. Such order, if maintained and/or retained, it will disturb the day to day affairs, including so called discipline of the management. The learned Judge ought not to have interfered with the order of transfers so passed, based upon the material, and the administrative exigency also.
6. The Courts are normally reluctant to interfere with the interlocutory order, basically to grant and/or refusal to grant stay to such transfer orders. The scope and purpose of Article 226 of the Constitution of India is quite limited. The question is whether the impugned interlocutory order is perverse and totally illegal and without any basis.
7. After hearing both the parties and after going through the record, including the pleadings so referred and relied upon by the Court, as well as, by the parties, I find that there is no perversity and/or illegality in passing the order, basically to say that the Court should interfere and reverse the order to bring the situation back to square one.
8. Normally, if the order of transfer is based upon some particular instance and of the management's policy decision, then there is no question of interference. But the case is made out, though prima facie, that such transfer is based upon various consideration other than the socalled
administrative contingencies; and it has foundation of allegations of malafide, harassment, humiliation and degradation of the level of work also, the stay of such transfer orders, in the present facts and circumstances, cannot be stated to be unjust, and/or illegal.
9. Admittedly, Respondent no.1 has been in service for more than 33 years having unblemished record and is about to retire in 2014. The VRS scheme so floated, though accepted by the Union, for whatever may be the reason, Respondent No.1 was not willing to accept the same. The individual decision, even if taken rightly or wrongly, and he is insisting upon not to accept the same, irrespective of the settlement of Union, in no way, at this stage, can be stated to be illegal and/or impermissible. His individual rights and in a situation, where he is about to retire in 2014, in no way, can be stated to be deliberate act and/or any intention to destroy so called settlement. There is ample material on record and at least recorded by the Court that, though persuaded from time to time, he was not willing to accept the VRS scheme. The allegations are that these transfer
orders are result of such denial. The transfer order, as noted above, not provided the specific reasons, though transferred along with other workers, yet that itself cannot be the reason that the aggrieved person cannot challenge his individual transfer order. The challenge to such transfer orders, therefore, so raised supported by the pleadings/affidavit, prima facie has been considered by the Court in his favour.
10. The aspect of malafide, humiliation and reduction in rank read with the change in cadre, as dealt with by the learned Judge. Those reasons are recorded in paragraphs 24, 25 and 26, in the following terms. As I am not deciding the issue finally, but taking for the purpose of adjudicating this writ petition finally, in my view, the reasoning so given, in no way can be stated to be bad in law and contrary to law.
“24. After going through both the transfer orders, it is explicit that the same do not show the reasons for transfer of the Applicant from the ACB Shop to the Security department. Nowhere it is mentioned that the business where the Applicant was working as a skilled employee has been closed or to come to an end. On the contrary the Applicant in clear terms mentioned in the Complaint that after his transfer one Shri Ajit Ghagare is transferred in his place. This fact is not denied by the Respondents. When Shri Ghagare is accommodated in place of the Applicant, then what was the necessity to transfer the Applicant from his working place to the security department, nowhere the same has been clarified by the Applicant much less satisfactorily.
25. Considering the pleadings at this prima facie stage and taking into consideration the documentary evidence, it clearly demonstrates that only because the Applicant has not accepted the VRS floated by the Respondents, the Applicant is being harassed by transferring him from his parent department to security department. Admittedly the Applicant was working as a skilled employee. The post of Security Guard does not fall within the grade of skilled employee. Therefore, it clearly indicates that this is humiliation by way of demoting the employee from the grade of skilled employee to the post of security guard. The Respondents have not justified why the Applicant is required to be transferred to the security department though there is provision under the settlement signed with the Bharatiya Kamgar Sena about ratiionalization, restructuring, flexibility, mobility, productivity and discipline. But nowhere it is agreed by the Union that under the said rationalization, restructuring, flexibility, mobility, productivity and discipline, the employees will be transferred to any grade irrespective of their present grade. The Union has not allowed the Respondent Company to demote any employee under the said nomenclature. No doubt the Union and the workmen agreed for mobility of the workmen within the department and between the departments in all areas of operations as and when required without any delay, as agreed and reflected on page No.7 of the settlement, but it does not mean that the workmen have agreed for demotion, Mobility of workmen is allowed within the department itself and not out of the department. The Respondents have misinterpreted the said terms of the agreement and only because the Applicant has refused to accept the VRS, forced him to work in the security department which is totally illegal and improper.
26. By transferring the Applicant who is a skilled employee to the post of security guard in the security department, the Respondents have changed the service conditions of the Applicant. Admittedly the Respondents have not given any notice of change under section 9A of the Industrial Disputes Act, 1947. The Applicant is forced by the Respondents to accept the transfer order and to go to the transferred place. All these acts on the part of the Respondents are nothing but unfair labour practices which prima facie squarely fall under items 3, 9 and 10 of Sch. IV of the Act. Considering all these aspects on the available material, in my considered view, the Applicant succeeded in proving that the Respondents have engaged in and engaging in prima facie unfair labour practices under items 3, 9 and 10 of Sch. IV of the Act. With this, Point No.1 is answered in the affirmative.”
11. The aspects of “change of cadre”, “the transfer is on the verge of retirement” and “for want of compelling reasons”, in my view, in the present case, supports the case of Respondent No.1 rather than the management/Petitioner. The contingencies and/or administrative reasons is basic aspect, but if case is made out of malafide and harassment and no compelling reasons and compelling the workmen to do the particular lower grade work and/or asking him to work somewhere else, specially when he is on the verge of retirement; these facts and facets, supports the case of the complainant.
12. Both the learned counsel appearing for the parties cited their respective judgments to support their rival contentions. Those judgments are distinguishable on facts itself.
13. In view of above circumstances, the Writ Petition is dismissed. However, considering the fact that the complaint itself is pending and Respondent No.1 is about to retire by 2014, it is desirable that the main complaint be decided and disposed of as expeditiously as possible and preferably within a period of three months.
14. There shall be no order as to costs.
15. The learned counsel appearing for the Petitioner makes statement that the trial Court, after passing the impugned order, has stayed the same for two weeks, and as of today, the same has been in operation, therefore, I am inclined to extend the stay as granted by the trial Court for two weeks from today.
(ANOOP V. MOHTA, J.)
 |
|
| Posted on 07 September 2012 by Apurba Ghosh |
Court
INCOME TAX APPELLATE TRIBUNAL
Brief
The fact of the case explained in following points “1. FOR THAT the Ld. Commissioner of Income Tax (Appeals) Jalpaiguri acted unlawfully in upholding the assessment order framed u/s. 143(3) of the Income Tax Act, 1961 by the Ld. Income Tax Officer, Ward 1, Raiganj passed in gross violation to the provision of s.143(2) of the Income Tax Act, 1961 and also infringes the Instruction No. 241/23/70 dated 23-10- 1970 issued by the’ Central Board of Direct Taxes in this respect and., such action on that behalf is ab initio void, ultra vires and ex-facie null in law. 2. FOR THAT the Ld. Commissioner of Income Tax (Appeals) Jalpaiguri acted unlawfully in upholding the alleged disallowance resorted to by the Ld. Income Tax Officer, Ward 1, Raiganj in the sum of Rs.1,01,754/- in respect of expenses claimed under “Labour Charges” on the specious ground “to curb the possibility of revenue leakage” without adducing any adverse evidence on record and his purported action on that behalf is altogether arbitrary, unwarranted and perverse. 3. FOR THAT on the facts and in the circumstances of the instant case, the Ld. Commissioner of Income Tax (Appeals) Jalpaiguri gravely erred in upholding the impugned disallowance amounting to Rs. 4,438/- in respect of “Office Expenses” on a tenuous premise of being “excessive” by the Ld. Income Tax”
Citation
Delta Construction C/o Shri Somnath Ghosh, Advocate Seven Brothers’ Lodge, P.O. Buroshibtala, Chinsurah Hooghly, Pin-712 105 (PAN: AACFD 1989K) (Appellant) –Vs.- ITO, Ward-1, Raiganj (Respondent)
Judgement
IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH: KOLKATA
[Before Smt. Diva Singh, Hon’ble Judicial Member]
I.T.A. No.817/Kol/2012
Assessment Year: 2008-09
Delta Construction
C/o Shri Somnath Ghosh, Advocate
Seven Brothers’ Lodge,
P.O. Buroshibtala, Chinsurah
Hooghly, Pin-712 105
(PAN: AACFD 1989K)
(Appellant)
–Vs.-
ITO, Ward-1, Raiganj
(Respondent)
Date of concluding the hearing: 22.08.2012
Date of pronouncing the Order: 22.08.2012
Appearances: For the Appellant : Shri Somnath Ghosh
For the Respondent: Sri D.J. Mehta, Sr. DR
O R D E R
This is an appeal filed by the assessee against the order dated 15.03.2012 of Commissioner of Income Tax (Appeals), Jalpaiguri pertaining to the assessment year 2008-09 on the following grounds:
“1. FOR THAT the Ld. Commissioner of Income Tax (Appeals) Jalpaiguri acted unlawfully in upholding the assessment order framed u/s. 143(3) of the Income Tax Act, 1961 by the Ld. Income Tax Officer, Ward 1, Raiganj passed in gross violation to the provision of s.143(2) of the Income Tax Act, 1961 and also infringes the Instruction No. 241/23/70 dated 23-10- 1970 issued by the’ Central Board of Direct Taxes in this respect and., such action on that behalf is ab initio void, ultra vires and ex-facie null in law.
2. FOR THAT the Ld. Commissioner of Income Tax (Appeals) Jalpaiguri acted unlawfully in upholding the alleged disallowance resorted to by the Ld. Income Tax Officer, Ward 1, Raiganj in the sum of Rs.1,01,754/- in respect of expenses claimed under “Labour Charges” on the specious ground “to curb the possibility of revenue leakage” without adducing any adverse evidence on record and his purported action on that behalf is altogether arbitrary, unwarranted and perverse.
3. FOR THAT on the facts and in the circumstances of the instant case, the Ld. Commissioner of Income Tax (Appeals) Jalpaiguri gravely erred in upholding the impugned disallowance amounting to Rs. 4,438/- in respect of “Office Expenses” on a tenuous premise of being “excessive” by the Ld. Income Tax”
2. The ld. A.R., inviting attention to the copy of the Board’s Instruction No.241/23/70 dated 23.10.1970, submitted that the assessment order is contrary to the said Instruction as the hearing in the said case closed on 3rd November, 2010 and the order was passed on 06.12.2010. Referring to the said Instruction, the ld. A.R. stated that it is stated therein that in case the orders are not passed immediately as in complicated cases or those involving the handling of voluminous materials, it may not be possible to pass an order immediately after the hearing, even in such cases the order should be passed within 14 working days from the last date of hearing. In regard to ground nos. 2 and 3, the argument was that the assessee had claimed labour charges, duly supported by Labour Attendance Register and Wages A/c. wherein the AO had the apprehension that there is bound to be a revenue leakage of 5% of the expenses. Similarly, in regard to the head office expenses, he made an ad hoc disallowance 10% of such expenses and in appeal the said additions were upheld. Referring to the submissions placed in pages 1 to 5 of the paper book, he stated that the said addition is contrary to the settled legal position. Reliance was placed upon the paper book containing submissions advanced before the CIT(A); copy of ledger account of labour charges and copy of labour attendance and wages register (pages 9 to 57 of the paper book). Copy of ledger account of office expenses (pages 58 to 60 of the paper book) etc. so as to contend that no discrepancy was pointed out by the AO which the assessee was required to explain as such the additions it was argued deserves to be deleted.
3. The ld. Sr.DR, Shri D.J. Mehta, in regard to the first ground, stated that no doubt the order was passed beyond 14 days, however, Instruction No.241/23/70 does not make the actions of the AO bad in law. Referring to ground nos.2 and 3, the ld. Sr.D.R. placed reliance upon the orders of the authorities below. However, when he was required to point out, he was, apart from the observations made by the AO, not in a position to say anything more.
4. Having heard the rival submissions and perused the materials available on record, it is seen that the AO estimated the disallowance to be made on account of the following reasons:
“Assessee firm had debited expenses of Rs.20,35,085/- under the head ‘Labour charges’. In support of this expense, A/R produce labour attendance register with wages account. To curb the possibility of any revenue leakage,5% of such expenses of Rs.20,35,085/- which comes to Rs.1,01,754/- is disallowed and added to the total income of the firm. Assessee firm debited Rs.44,376/- under the head ‘office expenses’ which seems excessive considering the work done by the firm. Hence, 10% of such expenses of Rs.44,376/- which comes to Rs.4,438/- is disallowed and added to the total income of the firm.”
4.1 On perusal of the same it is seen that no reasoning or basis for making disallowance has been made apart from suspicions. The said action has been upheld by the CIT(A). On consideration of the entire facts and materials and the settled legal position, I am of the view that the said action cannot be supported in law as in the face of fully vouched and verifiable expenses, as per the claim of the assessee, which has not been rebutted by the revenue and where the assessee has maintained the Attendance Register of labourers shown the ledger account of labour charges and office expenses, which were all duly produced before the AO and also placed before us which contained the details of wages paid to and accepted by the labourers, no defect in the same has been pointed by the revenue. The action to make the ad hoc disallowance @5% qua the same and 10% in the case of office expenses on the reasoning that “to curb the possibility of revenue leakage” and “seems excessive” respectively is arbitrary which cannot be supported in law. Hence, addition so made of these disallowances by the AO, which has been upheld by the CIT(A), cannot be sustained. Accordingly, ground nos. 2 and 3 are allowed. In regard to ground no.1, which has been half-heartedly argued by the ld. A.R., the same is rejected and the department’s argument in this regard stands accepted. Therefore, the appeal of the assessee is partly allowed.
5. In the result, the appeal of the assessee is partly allowed.
The said Order was pronounced in the open court on 22.08.2012 in the presence of the parties on the date of hearing itself.
Sd/-
(Diva Singh)
Judicial Member
Dated: 22/ 08/ 2012
Copy of the order forwarded to:
1. Delta Construction, C/o Shri Somnath Ghosh, Advocate, Seven Brothers’ Lodge, P.O. Buroshibtala, Chinsurah, Hooghly, Pin-712 105
2 ITO, Ward-1, Jalpaiguri
3. CIT(A)-
4. CIT-
5. DR, Kolkata Benches, Kolkata
(True Copy)
By Order
Assistant Registrar, I.T.A.T., Kolkata.
Talukdar/Sr.P.S.
| Posted on 07 September 2012 by Apurba Ghosh |
Court
INCOME TAX APPELLATE TRIBUNAL
Brief
In allowing credit of MAT of the previous year u/s 115JAA at `.56,05,585/-. (Pl. see Sl. No.22 of Intimation) only as against the sum of `.63,51,128/- paid as per Schedule Part B of TTI of ITR 6 of previous year resulting in not allowing the credit of MAT u/s 115 JAA at `.5,60,559/- and `.1,84,984/- being the amount of surcharge and education cess (Part B of TTI of ITR 6 of previous year) which were paid in the previous year and credit of the same has to be allowed along with the sum of `.56,05,585/- in this year for which records are available with the department.
Citation
M/s Richa Global Exports Pvt. Ltd., A-41, Mayapuri Indl Area, New Delhi. (Appellant) Vs. ACIT, (CPC),Vabgalore. (Respondent)
Judgement
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH ‘F’ NEW DELHI)
BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER
AND
SHRI T.S. KAPOOR, ACCOUNTANT MEMBER
I.T.A. No.2303/Del/2012
Assessment year: 2010-2011
M/s Richa Global Exports
Pvt. Ltd., A-41,
Mayapuri Indl Area,
New Delhi.
(Appellant)
Vs.
ACIT,
(CPC),
Vabgalore.
(Respondent)
PAN /GIR/No.AADCR-0255-L
Appellant by: Shri KVSR Krishna, Advocate.
Respondent by: Smt. Veena Joshi, DR.
ORDER
PER TS KAPOOR, AM:
This is an appeal filed by the assessee against the order of Ld CIT(A) dated 27.2.2012. The grounds raised by the assessee are as under:-
1. That on the facts and circumstances of the case, the Ld CIT(A) has grossly erred:
a) In allowing credit of MAT of the previous year u/s 115JAA at `.56,05,585/-. (Pl. see Sl. No.22 of Intimation) only as against the sum of `.63,51,128/- paid as per Schedule Part B of TTI of ITR 6 of previous year resulting in not allowing the credit of MAT u/s 115 JAA at `.5,60,559/- and `.1,84,984/- being the amount of surcharge and education cess (Part B of TTI of ITR 6 of previous year) which were paid in the previous year and credit of the same has to be allowed along with the sum of `.56,05,585/- in this year for which records are available with the department.
b) For the purpose of calculating interest u/s 234B & 234C ignoring from the computation the amount of surcharge and education cess etc. under MAT of the previous year paid at `.5,60,559/- and `.1,84,984/-.
c) As a result in creating/charging extra demand of `.8,74,195/- (`.8,62,225/- + `.11,970/-) while processing the return of income u/s 143(1) by doing/committing following mistakes:-
Sl.No.
|
Reporting Heads
|
As computed Extra
u/s 143(1).
|
Amount
charged
|
21
|
Tax payable for the year.
|
12939708
|
|
22
|
Credit u/s 115JAA
|
5605585
|
|
23
|
Adjusted tax liability
|
12939708
|
|
24
|
Surcharge
|
1293971
|
560559
|
26
|
EC+ Secondary &
Higher Edu. Cess.
|
427010
|
184984
|
32
|
234B
|
207972
|
91002
|
34
|
234C
|
259199
|
37650
|
|
|
|
874195/-
|
2. That the Ld CIT(A) has erred in not accepting the assessee’s submission that tax has been defined in sec. 2(43) where tax means income tax and the same should be read with further definition of income tax given in Explanation-2 of sec. 115JB in Chapter XIIB and as such committed a mistake in not allowing the relief for surcharge and education cess while computing the tax for the year under appeal.
3. Appellant craves to add, file, modify and other ground before or at the time of hearing of appeal.
2. The brief facts of the case are that the assessee filed return electronically and received intimation order u/s 143(1) dated 15.3.2001 from ACIT, CPC, Bangalore. The assessee observed from the intimation that in allowing credit of MAT of previous year u/s 115JAA against the claim of `.63,51,128/-, the claim was allowed only for an amount of `.56,05,585/-. Therefore, assessee noted that there was a short fall in the allowance of credit of MAT by `.7,45,543/- being the amount of surcharge and education cess amounting to `.5,60,559/- & `.1,84,984/- respectively. The assessee further observed that interest u/s 234B & 234C was calculated ignoring from the computation, the amount of surcharge and education cess which was paid during previous year along with MAT. Therefore, the assessee filed an appeal before Ld CIT(A) and prayed that due credit of MAT including surcharge & education tax should be considered u/s 115JAA and in support relied upon Explanation 2 of section 115JB which was inserted by Finance Act, 2008 with retrospective effect from 1.4.2001. A further prayer was made for calculation of interest u/s 234B & 234C after giving proper credit of MAT including surcharge and education tax.
3. The Ld AR further submitted before Ld CIT(A) that Chapter XIIB has four sections and definition of tax is given in one section i.e. 115JAA vide explanation (2) and therefore he argued that said explanation would apply to all the four sections which are covered under Chapter-XIIB and particularly to section 115JAA. In view of the above, the Ld AR submitted that benefit of surcharge and education paid in the last year be given as part of tax credit and the amount of surcharge and education cess should not be considered as a separate levy. The Ld CIT(A) after considering the submissions made by the assessee did not agree with the assessee. The relevant portion of Ld CIT(A)’s order is reproduced below:-
“I have carefully considered the intimation u/s 143(1) and the submissions made by the appellant. The provisions of section 115JAA deals with allowability of tax credit in respect of tax paid on deemed income relating to certain companies. The section allows only credit of tax paid by the company in accordance with the provisions of section 115JAA. Tax has been defined in section 2(43) to be income tax chargeable under the provisions of the Act and surcharge and education cess have not been included in the definition of tax. Wherever the legislature wanted to widen the definition of tax it has done it specifically for example in explanation 2 to section 115JB, the income tax has been specifically defined to include surcharge as well as education cess. Thus credit of surcharge and education cess are not admissible for claim of credit as per provisions of the section 115JAA.”
4. Aggrieved the assessee filed appeal before this Tribunal.
5. At the outset, the Ld AR argued that Ld CIT(A) has referred to section 2(43) for meaning of tax paid which instead should have been read together with explanation 2 to section 115JB The Ld AR further argued that definition of tax has been given in Explanation (2) to section 115JB according to which tax includes surcharge and education cess. He further argued that definition of tax u/s 115JB as per explanation 2is applicable to all four sections of Chapter-XIIB. In this respect, the Ld AR filed a compendium on orders of IT/WT by Dr. Girish Ahuja which at question No. 20.14 explain the calculation of MAT under different years which as per Ld ARincluded surcharge and education tax. He further argued that the Assessing Officer has taken a very narrow meaning of tax under MAT and in fact correct fact is that total outgo of tax including surcharge should be considered for giving credit u/s 115JAA. The Ld AR argued further that interest u/s 234B & 234C should be calculated after giving credit of MAT including surcharge and education tax. Reliance was placed in the case of CIT v. Tulsyan NEC Ltd. at 330 ITR 226.
6. On the other hand, Ld DR argued that this intimation is not manual and is an automatic from CPC wherein the calculations are done automatically through software. She further argued that section 115JAA & section 115JB talks of only income tax and no where surcharge and education tax is included for the purpose of these sections. Therefore, she argued that Ld CIT(A) has rightly rejected the appeal of the assessee.
7. We have heard the rival submissions of both the parties and have gone through the material available on record. For understanding the amount of tax credit available u/s 115JAA first of all, it is necessary to understand the meaning of income tax as contemplated by section 115JB of the Act. Section 115JB reads as under:-
“Special provision for payment of tax by certain companies. 115JB.
(1) Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee, being a company, the income-tax, payable on the total income as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 2010, is less than fifteen per cent of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee on such total income shall be the amount of income-tax at the rate of fifteen per cent.
(2) Every assessee, being a company, shall, for the purposes of this section, prepare its profit and loss account for the relevant previous year in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act, 1956 (1 of 1956)}”
The above section clearly talks that such book profit shall be deemed to be total income of the assessee and tax payable by the assessee on such total income shall be the amount of income tax at specified rate of tax which was 15% for the relevant year under consideration. The section does not talk about the income tax as increased by surcharge & education tax. It talks about only income tax. Wherever statute has required income tax to include surcharge and education tax, it has specifically done it like in Explanation 2 to section 115JB. Similarly Form 29B which is filed along with return of income where MAT is applicable at point 14 it states that the amount of income tax payable by the company would be 15% of col. 12 i.e. book profits, it does not state surcharge or education cess. Therefore, it emerges that MAT payable u/s 115JB is only income tax and does not include surcharge or education cess. Therefore, if only income tax is paid under the provisions of section 115JB it is natural that tax credit u/s 115JAA will only be of income tax and not of surcharge and education cess. This point is further clarified by intimation u/s 143(1) sent to assessee wherein tax payable u/s 115JB has been calculated as only income tax and no surcharge or education cess has been included in the amount of income tax.
8. The submission of Ld AR that tax includes surcharge and education cess as per explanation 2 of section 115JB is correct to the extent that explanation 2 was inserted to clarify the meaning of tax as contemplated in clause (a) of explanation (1) with respect to calculation of book profit which is read as under:-
“Explanation-1 for the purpose of this section book profit means the net profit as shown in the P&L Account for the relevant previous year prepared under sub section (2) as increased by :-
a) the amount of income tax paid or payable and the provisions thereof:
b) xxxxx
c) xxxxx
d) xxxxx
e) xxxxx
f) xxxxx
The above explanation 1 clarifies that explanation 2 to section 115JB was inserted to define the meaning of tax (which of course includes education tax and surcharge) for the purpose of calculating book profits liable to tax u/s 115JB and it cannot be extended to sections 115JB or section 115JAA of the Act.
In view of the above provisions, we are of the considered opinion that tax credit u/s 115JAA was rightly given and we do not find any reason to interfere in the order of Ld CIT(A).
9. The second ground of appeal of the assessee is regarding interest u/s 234B & 234C, it is a mandatory provision and is consequential in nature and in view of our adjudication on ground 1 above, the ground No.2 is also decided against the assessee. The case law relied upon by assessee relates to admissibility of credit of MAT tax before charging interest u/s 234B & 234C which in the present case has been done correctly. The only difference is that amount of surcharge and education tax has not been included in the amount of MAT credit which is also correct as per our discussion above relating to ground No.1.
10. In the result, the appeal filed by the assessee is dismissed.
11. Order pronounced in the open court on 31st day of August, 2012.
Sd/- Sd/-
(I.C. SUDHIR) (T.S. KAPOOR)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dt.31.8.2012.
HMS
Copy forwarded to:-
1. The appellant
2. The respondent
3. The CIT
4. The CIT (A)-, New Delhi.
5. The DR, ITAT, Loknayak Bhawan, Khan Market, New Delhi.
True copy.
By Order
(ITAT, New Delhi).
Date of hearing 17.7.2012
Date of Dictation 27.8.2012
Date of Typing 28.7.2012
Date of order signed by both the Members & pronouncement. 31.8.2012
Date of order uploaded on net& sent to the Bench concerned. 31.8.2012
|
| Tags :- |
|
|
No comments:
Post a Comment