JUDGMENT judgment of court was delivered by R. Sudhakar J.-This tax case (appeal) filed by Revenue as against order of Income-tax Appellate Tribunal was admitted by this court on following substantial question of law: "Whether, on facts and in circumstances of case, Appellate Tribunal was right in setting aside orders of lower authorities and decide issue in favour of assessee even though interest under section 244A has not been granted on refund of Rs. 6,52,517 which is only consequential to credit given under section 115JAA of Income-tax Act, 1961?" It is submitted by learned standing counsel appearing for Revenue that after admission of this tax case (appeal), Tribunal has passed order reducing amount of refund to Rs. 2,71,798. This figure is subject to verification by officer concerned in light of decision that we are now rendering in present tax case (appeal). It is made clear that either parties will be entitled to clarify exact amount of refund. Hence, question of law that arises for consideration in this tax case (appeal) is modified as follows: "Whether Tribunal was justified in allowing appeal filed by assessee, who claimed interest under section 244A of Incometax Act consequent to benefit of MAT credit under section 115JAA of Income- tax Act extended to assessee?" brief facts of case are as follows: assessment in this case relates to assessment year 1998-99. assessee is company engaged in business of manufacture and export of cotton garments. assessee filed its return of income on November 27, 1998, declaring gross total income of Rs. 6,50,15,073. Assessing Officer determined total taxable income under normal computation at Rs. 1,33,06,600 and book profit under section 115JA of Income-tax Act at Rs. 1,77,48,720. Assessing Officer arrived taxable income at 30 per cent. of book profit at Rs. 53,24,616. Hence, higher amount of taxable income, namely, Rs. 1,33,06,600 was taken as taxable income of assessee and tax was determined at 35 per cent. at Rs. 46,57,310. From said amount, amount of TDS and advance tax paid was deducted. Thereafter, interest under section 234B and section 234C were added. Thereafter, tax paid under section 140A and MAT credit was deducted. Finally, Assessing Officer passed order directing assessee to pay balance demand after deducting refund already granted. Aggrieved by said order of Assessing Officer, assessee preferred appeal before Commissioner of Income-tax (Appeals), who allowed appeal holding as follows: "4.2. I have considered appellant's submission. MAT credit is nothing but assessee's credit lying with Government available to assessee for adjustment against tax due from assessee in subsequent year. moment tax becomes payable by assessee in subsequent year on normally computed income, tax credit brought forward is to be automatically adjusted against such income-tax by virtue of provision of section 115JAA(4). Therefore, assessee is not to be expected to pay advance tax to extent of MAT credit brought forward from preceding years. Only balance tax liability remaining, if any, after such set off, is payable by assessee as advance tax. To expect otherwise will lead to two credits (MAT and advance tax payment) against one tax liability. Further, as there is no express provision to show working of MAT credit and there is ambiguity in provision with regard to tax payments made under MAT credit scheme, Assessing Officer is directed to give credit of MAT payment of Rs. 27,93,693 and afterwards work out interest payment under section 234B and section 234C. appellant's claim is allowed." As against order of Commissioner of Income-tax (Appeals), Revenue has not filed any appeal and, hence, said order has become final. To give effect to order of Commissioner of Income-tax (Appeals), Assessing Officer passed order on November 29, 2002, but said order is not giving effect to order but contrary to order passed by Commissioner of Income-tax (Appeals). Hence, Assessing Officer passed another order on March 28, 2003, correcting error in earlier giving effect to order of Commissioner of Income-tax (Appeals) in following manner: "Giving effect to order of Commissioner of Income-tax (Appeals) cited, assessment order dated March 18, 2002, is modified as under: Grant total income as 6,50,15,073 per order dated 18-3-2002 Less: Deduction under section 80HHC (As held by 5,53,19,475 CIT(A)) Deduction under 15,000 5,53,34,475 section 80G (as claimed) Revised taxable 96,80,598 Income as per normal (or) 96,80,600 computation [A] Taxable Income under section 115JA: Book profit as per 6,94,42,189 order dated 18-3-2002 Less: Deduction 5,53,19,475 under section 80HHC 1,41,22,714 Revised book profit or 1,41,22,710 42,36,814 30 per cent. thereof [B] Taxable Income being higher of [A] or [B] i.e,. Rs. 96,80,600 Income-tax thereon 33,88,210 35 per cent. Less: MAT credit 19,05,326 under section 115JAA 14,82,884 Less: TDS 13,09,401 Advance tax 8,26,000 21,35,401 Refund due 6,52,517 Consequent to abovesaid giving effect order, assessee filed petition on April 8, 2003, requesting interest under section 244A of Income- tax Act on refund determined at Rs. 6,52,517 after adjusting TDS and advance tax of Rs. 21,35,401. Deputy Commissioner of Income-tax was of view that interest on refund amount could not be granted as per proviso under section 115JAA(2) of Income-tax Act. Aggrieved by same, assessee filed appeal before Commissioner of Income-tax (Appeals). order of Deputy Commissioner of Income-tax was upheld by very same Commissioner of Income-tax (Appeals), who granted relief in favour of assessee in earlier round of litigation. said order of Commissioner of Income-tax (Appeals) reads as follows: "3. Assessing Officer has correctly determined that as per proviso to section 115JAA(2), no interest shall be payable on tax credit allowed under sub-section (1). Hence, interest under section 244A has not been granted on refund of Rs. 6,52,517 which is only consequential to credit given under section 244A on refund of Rs. 6,52,517 has been correctly rejected. I find no reason to interfere with order of Assessing Officer. appellant's ground fails." Aggrieved by same, assessee filed appeal before Incometax Appellate Tribunal. Before Tribunal, Departmental representative conceded that there was error on part of Assessing Officer in giving effect to order of Commissioner of Income-tax (Appeals) passed originally. Hence, after hearing submissions on both sides, Tribunal passed following order: "5. We have heard rival contentions and perused relevant records. learned counsel of assessee submitted that there is no question of assessee receiving refund on account of MAT credit. Unadjusted MAT credit is only carried forward and no credit is received on account of that. It is only tax paid and TDS which remain after adjustment of MAT credit that assessee become eligible for refund. Hence, claim of interest on refund is perfectly justified. 6. learned Departmental representative conceded that there was in fact error on part of Assessing Officer in giving effect to original Commissioner of Income-tax (Appeals)'s order. In this order dated October 3, 2002, Commissioner of Income-tax (Appeals) has clearly directed that assessee was not expected to pay advance tax to extent of MAT credit brought forward from preceding year and Assessing Officer was directed to give credit to MAT payment of Rs. 27,93,693 and afterwards work out interest payment under sections 234B and 234C. 7. Upon consideration of aforesaid, we are of opinion that assessee's claim is perfectly justified. Hence, we set aside orders of authorities below and decide issue in favour of assessee." Aggrieved by order of Tribunal, Revenue is before this court. Heard learned standing counsel appearing for Revenue and learned counsel appearing for assessee and perused materials placed before this court. It is seen from order of Tribunal that Departmental representative has conceded before Tribunal that there was error on part of Assessing Officer in giving effect to order of Commissioner of Income-tax (Appeals). At threshold, we fail to see whether appeal could be filed, when Revenue has fairly conceded before Tribunal. However issue having been raised by Revenue, we are inclined to take up issue for consideration. Before going into merits of case, for better appreciation, we extract hereunder relevant provisions, namely, section 115JA(1) and (2) and proviso: "115JA. Deemed income relating to certain companies.-(1) Not withstanding anything contained in any other provisions of this Act, where in case of assessee, being company, total income, as computed under this Act in respect of any previous year relevant to assessment year commencing on or after 1st day of April, 1997, but before 1st day of April, 2001 (hereafter in this section referred to as relevant previous year), is less than thirty per cent. of its book profit, total income of such assessee chargeable to tax for relevant previous year shall be deemed to be amount equal to thirty per cent. of such book profit. (2) Every assessee, being company, shall, for purposes of this section prepare its profit and loss account for relevant previous year in accordance with provisions of Parts II and III of Schedule VI to Companies Act, 1956 (1 of 1956): Provided that while preparing profit and loss account, depreciation shall be calculated on same method and rates which have been adopted for calculating depreciation for purpose of pre paring profit and loss account laid before company at its annual general meeting in accordance with provisions of section 210 of Companies Act, 1956 (1 of 1956): Provided further that where company has adopted or adopts financial year under Companies Act, 1956 (1 of 1956), which is different from previous year under Act, method and rates for calculation of depreciation shall correspond to method and rates which have been adopted for calculating depreciation for such financial year or part of such financial year falling within relevant previous year." In present case, originally Commissioner of Income-tax (Appeals) has correctly interpreted provisions of section 115JAA(4) of Income-tax Act to effect that tax credit should be allowed set off in year when tax becomes payable on total income computed in accordance with provisions of this Act other than section 115JA or section 115JB, as case may be. He rightly held that assessee is not expected to pay advance tax to extent of MAT credit brought forward from preceding years. Only balance tax liability remaining, if any, after such set off, is payable by assessee as advance tax. If that is so, MAT credit that is available should be allowed to set off and thereafter tax liability has to be determined taking note of advance tax paid and TDS available. It is relevant to note that case in converse came up for consideration before Supreme Court in decision reported in CIT v. Tulsyan NEC Ltd. [2011] 330 ITR 226 (SC) wherein issue before Supreme Court was regarding priority to be given on adjustment of MAT credit. Supreme Court observed that when tax is paid by assessee under section 115JA, assessee becomes entitled to claim credit of such tax in manner prescribed. Such right gets crystallised no sooner tax is paid by assessee. It further held that although right to avail of tax credit gets crystallised in year one, on payment of tax under section 115JA and set off thereof follows statutorily, amount of credit available and amount of set off to be actually allowed as in all cases of deductions/allowances under sections 30-37, is fluid/inchoate and subject to final determination only on adjudication of assessment either under section 143(1) or under section 143(3). fact that amount of tax credit to be allowed or to be set off is not frozen and is ambulatory, does not take away/destroy right of assessee to amount of tax credit. In abovesaid case before Supreme Court, Assessing Officer, while determining interest payable under section 234B and section 234C, computed short fall of tax payable without taking into account set off of MAT credit. Hence, Supreme Court came to conclusion that in so far as priority is concerned, MAT credit should be taken into account and, thereafter, credit should be given to advance tax paid and TDS, etc. Supreme Court rejected contention of Department that even if there is MAT credit balance, assessee is required to pay advance tax and if he fails to pay, interest under section 234 would be chargeable, thereby, making it clear that MAT credit should be first given effect to. For better clarity, we extract relevant portion of decision of Supreme Court hereunder (page 236 of 330 ITR): "We have discussed hereinabove scheme of section 115JA(1) and section 115JAA. entire scheme of sections 115JA(1) and 115JAA shows that if assessee is entitled to tax credit as consequence of assessee making payment of tax under section 115JA(1) in year one, then, set off of such tax credit follows as matter of course once conditions mentioned in section 115JAA are fulfilled and grant of such credit is not dependent upon determination by Assessing Officer save and except that ultimate amount of tax credit to be allowed will be dependent upon final determination of total income for first assessment year. There is no provision under section 115JAA which postpones right of assessee to claim set off to determination of total income by Assessing Officer in first assessment year. Entitlement/ right to claim set off is different from quantum/quantification of that right. Entitlement of MAT credit is not dependent upon any action taken by Department. However, quantum of tax credit will depend upon assessment framed by Assessing Officer. Thus, right to set off arises as result of payment of tax under section 115JA(1) although quantification of that right depends upon ultimate determination of total income for first assessment year. Further, assessee has right to take into account set off even while estimating its liability to pay advance tax on the'current income' in accordance with provisions of Chapter XVII-C. Although section 209(1)(d) does not make any specific provision either before or after amendments carried out by Finance Act, 2006, to effect that assessee is entitled to set off tax credit that would be available in terms of section 115JAA(1) while computing quantum of advance tax that is to be paid it must follow that assessee would be entitled to do so otherwise it results in absurdity, viz., that assessee would be entitled to do so otherwise it results in absurdity, viz., that assessee pays advance tax on footing that it is not entitled (when in fact it is so entitled as discussed above) to credit and thereafter claims refund of such advance tax paid as consequence of set off. Moreover, when Assessing Officer makes intimation under section 143(1) he accepts return filed by assessee to which Assessing Officer may make adjustment and consequently makes demand or refund. Section 143(1) provides that where return is made under section 139 and if any tax or interest is found due on basis of such return after adjustment of any TDS, any advance tax, any tax paid on self-assessment and any amount paid otherwise by way of tax or interest, then, without prejudice to provisions of sub-section (2), intimation will be sent to assessee specifying amount so payable and such intimation shall be deemed to be notice of demand under section 156 and all provisions of Act shall apply thereto. This section itself makes it clear that whilst Assessing Officer determines tax payable he has to give credit for all taxes paid either by way of deduction at source, advance tax, self- assessment tax or tax paid otherwise which would include or which cannot exclude tax credit under section 115JAA(1). However, question before us is of priority of adjustment for MAT credit. In this connection, it is important to bear in mind that credit allowed is excess of normal tax liability over MAT liability in subsequent years.... issue which crops up for decision is-how should advance tax be calculated when company has MAT credit? To answer, we need to look at section 234B. Under that section, 'assessed tax' means tax on total income determined under section 143(1) or on regular assessment under section 143(3) as reduced by amount of tax deducted or collected at source in accordance with provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income. definition, thus, at relevant time excluded MAT credit for arriving at assessed tax. This led to immense hardship. position which emerged was that due to omission on one hand MAT credit was available for set off for five years under section 115JAA but same was not available for set off while calculating advance tax. This dichotomy was more spelt out because section 115JAA did not provide for payment of interest on MAT credit. To avoid this situation, Parliament amended Explanation 1 to section 234B by Finance Act, 2006, with effect from April 1, 2007 to provide along with tax deducted or collected at source, MAT credit under section 115JAA also to be excluded while calculating assessed tax. From above, it is evident that any tax paid in advance/preassessed tax paid can be taken into account in computing tax payable subject to one caveat, viz., that where assessee on basis of self-computation unilaterally claims set off or MAT credit, assessee does so at its risk as in case it is ultimately found that amount of tax credit availed of was not lawfully available, assessee would be exposed to levy of interest under section 234B on shortfall in payment of advance tax. We reiterate that we cannot accept case of Department because it would mean that even if assessee does not have to pay advance tax in current year because of his brought forward MAT credit balance, he would nevertheless be required to pay advance tax, and if he fails, interest under section 234B would be chargeable.... " Supreme Court having thus cleared position of law that priority should be given first on adjustment of MAT credit, we have no hesitation to hold that order of Tribunal is in consonance with statutory provision of law as propounded by Supreme Court in abovesaid decision. We, therefore, answer question of law against Revenue and in favour of assessee. In result, this tax case (appeal) stands dismissed. No costs. *** Commissioner of Income-tax v. Ambattur Clothing Ltd