COMMISSIONER OF INCOME TAX Vs. FARIDA SHOES LTD

JUDGEMENT

(1.) The revenue is on appeal against the order of the Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai, dated 06.06.2006 passed in ITA Nos. 125/Mds/2004.

(2.) The assessee filed its return of income for the assessment years 1999-2000. The assessing officer, in the proceedings under Section 154 of the Income Tax Act, granted the MAT credit and calculated interest under Sections 234B and 234C of the Act. The assessee appealed against the order of assessment to the Commissioner of Income Tax (Appeals), who dismissed the appeal on the ground that as per R.12(1)(1)(a) return of income shall be in Form 1 and Schedule G gives the order of credit as TDS, Advance tax. The form 1 had been substituted with effect from 17.08.2001 and it was held that interest under Sections 234B and C had to be computed and thereafter MAT credit had to be granted. On further appeal to the Tribunal, the Tribunal following its earlier order in the case of M/s. Chemplast Sanmar Ltd., and held that the assessee is entitled to adjust the MAT credit first before charging of interest under Section 234B and 234C of the Act and allowed the appeal. The revenue is thus before us in this appeal.

(3.) The appeal was admitted by this Court on the following substantial questions of law: