COMMISSIONER OF INCOME TAX Vs. JINDAL EXPORTS LTD.

JUDGEMENT

(1.) IN these appeals two sets of substantial questions of law have been formulated. They are : Question A : Whether the Tribunal was correct in law in holding that rectification could not be made by the AO under s. 154 of the IT Act, 1961 as the issue regarding charging of interest under s. 234B of the Act without giving set off of MAT credit available to the assessee was highly debatable ? Question B : Whether the Tribunal was correct in law in holding that credit of tax paid under s. 115JAA can be given before computing interest under s. 234C of the IT Act, 1961 ?

(2.) QUESTION A has been formulated in IT Appeal Nos. 402 of 2005, 407of 2007, 907 of 2007, 914 of 2007, 969 of 2007, 989 of 2007, 1350 of 2007, 546 of 2008, 701 of 2008, and 893 of 2008. Question B has been framed in IT Appeal Nos. 1474 of 2006, 708 of 2007, 719 of 2007, 791 of 2007, 829 of 2007, 986 of 2007, 992 of 2007, 1063 of 2007, 271 of 2008, 272 of 2008, 295 of 2008, 344 of 2008, 453 of 2008, 456 of 2008, 462 of 2008, 476 of 2008, 477 of 2008, 801 of 2008 and 802 of 2008. Essentially, these questions raise the common issue as to whether interest under ss. 234B and 234C is to be charged before the tax credit (commonly referred to as MAT credit) available under s. 115JAA is set off against tax payable on total income or after it is so set off ? The additional issue is whether this question was debatable and therefore the provisions of s. 154 could not have been invoked ? The latter issue arises only in the first set of appeals. Rival Contentions - -Summary

(3.) ALL the appeals are in respect of assessment year prior to the amendments to Expln. 1 after s. 234B(1) and to the Explanation after s. 234C(1) of the IT Act, 1961 (hereinafter referred to as "the said Act") by virtue of the Finance Act, there is no dispute that credit of tax paid under s. 115JAA r/w s. 115JA would have to be set off before interest is computed under ss. 234B and 234C. It was further contended that the said amendments were substantive and first setting off the tax credit and then computing the interest under ss. 234B and 234C of the said Act. Therefore, the Revenue contended, the Tribunal erred in holding that interest under ss. 234B and 234C was to be computed only after giving effect to the set off. With regard to the rectification proceedings under s. 154, it was contended that the language of the provisions of s. 234B and s. 234C was clear and unambiguous and, as such, there was no scope for any debate. Thus, it was submitted, that rectification proceedings were in order.