In the recent case, the Calcutta High Court,upheld the Tribunal’s decision on Minimum Alternate Tax ( MAT ) credit and provisions for doubtful debts, concluding that there were no significant errors in the assessment made by the lower authorities.
Eastern Coalfields Ltd.,the respondent-assessee, the revenue appellant, filed an appeal under Section 260A of the Income Tax Act,1961 of the act. The appeal was filed against the order dated January 5,2023, passed by the bench of Kolkata tribunal for the AY 2016-17.
The court considered the legal aspect of the issues raised by the revenue appellant including the excess set-off of MAT credit and the impact of pending appeals on the finality of MAT credit computation. It was noted that a notice was issued by the Principal Commissioner of Income Tax, Asansol ( PCIT ) under Section 263 addressing the excess set-off of MAT credit.
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It was observed by the respondent-assessee’s point that the additions made by the Assessing Officer( AO ) for the years 2015-16 and 2016-17 were still being appealed and had not been finalized, affecting the MAT credit calculation. The court also acknowledged that any excess MAT credit could be corrected under Section 115JAA(6) once the assessments were concluded.
Additionally, the PCIT issued another notice concerning a short disallowance of provisions amounting to Rs. 6.05 crore on March 11,2022. The assessee had responded via the Income Tax Business Application- Permanent Account Number ( ITBA ) portal,providing evidence to show that there was no short disallowance as claimed on March 17,2022.
The assessee also pointed out that since the MAT credit issue was still unresolved, any necessary corrections could be made later, as allowed by law, once the pending assessments before the Commissioner Of Income Tax ( Appeals )[CIT(A)] are finalized.
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The court stated that it was dismissing the revenue’s appeal but agreed with the Tribunal’s final decision on the matter. However, the court based its affirmation on different grounds than those used by the Tribunal.
The third issue raised by the revenue appellant pertains to the disallowance of doubtful debts. It was noted by the court that the respondent-assesse’s counsel provided a paper book with all documents reviewed by the Tribunal. The Tribunal found no errors in the assessment order.
The court determined that the PCIT’s claim about the lack of response was incorrect, the reply was timely submitted, and after examining the facts, found no substantial question of law for the appeal.
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A coram comprising Chief Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya dismissed the appeal.
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