Law:

Section:

Section 58, read with Section 115JAA and 234C, of the Income-tax Act, 1961 - Interest Chargeable - Assessment year 1999-2000 - Whether interest under sections 234B and 234C should be charged after allowing MAT credit under section 115JAA - Held, yes Section 234B, read with Section 154 and 234C, of the Income-tax Act, 1961 FACTS The Assessing Officer initially issued an intimation under section 143(1) to the assessee in which a refund was allowed. Thereafter, the Assessing Officer passed order under section 154 rectifing said intimation by withdrawing excess credit allowed under section 115JAA . In the computation form in ITNS-150 attached to the order under section 154, the Assessing Officer also charged interest under sections 234B and 234C. The assessee filed objections contending that the interest under sections 234B and 234C should have been charged after setting off the MAT credit allowable under section 115JAA. The Assessing Officer, however, did not agree with the submission of the assessee. On appeal, the Commissioner (Appeals) directed the Assessing Officer to allow the MAT credit before charging interest under sections 234B and 234C. On the revenue's appeal, the Tribunal came to the conclusion that the Assessing Officer had completely ignored the settled legal issue that before charging interest under sections 234B and 234C, the MAT credit was to be allowed to the assessee. The Tribunal also observed that, in fact, the charging of interest under sections 234B and 234C by the Assessing Officer, as a consequence of the order passed under section 154, was a debatable issue, which the Assessing Officer could not do by invoking the provisions of section 154. The Tribunal also returned a clear finding that the charging of interest under sections 234B and 234C was introduced by the Assessing Officer in his order under section 154 and not while rejecting the application of the assessee under section 154. Consequently, the Tribunal held that the Commissioner (Appeals) was fully justified in directing the Assessing Officer to allow the MAT credit before charging interest under sections 234B and 234C. On the revenue's appeal to the High Court : HELD There was no…

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