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June 29 To July 5, 2019 u Taxmann’s Corporate Professionals Today u Vol. 45 u 29In understanding the true rationale of any
legislative amendment, the legislative intent
of making that amendment plays a very
crucial role.
The intent of the legislature in extending
the MAT Credit carry forward period
- The Explanatory Memorandum explaining
the provisions of the Finance Bill, 2017 read
as under:
“Section 115JAA contains provisions
regarding carrying forward and set off
of tax credit in respect of Minimum
Alternate Tax (MAT) paid by companies
under section 115JB. Currently, the tax
credit can be carried forward upto
tenth assessment years. With a view to
provide relief to the assessees paying
MAT, it is proposed to amend section
115JAA to provide that the tax credit
determined under this section can be carried
forward up to fifteenth assessment years
immediately succeeding the assessment
years in which such tax credit becomes
allowable
These amendments will take effect from
1st April, 2018 and will, accordingly,
apply in relation to the assessment year
2018-19 and subsequent years.”Therefore, it is duly evident from the plain
reading of the explanation as contained in
the Explanatory Memorandum to Finance
Bill, 2017 that the intent of the Legislature
in extending the MAT credit carry forward
period from 10 years to 15 years was to
provide relief to the assessees paying MAT.
However, some uncertainty and confusion
has arisen in case of those assesses where
originally envisaged MAT credit carry forward
period of 10 years has already expired on
or before 1.4.2018, the date on which such
amended provision has come into force, but
the extended MAT credit period of 15 years
has not expired.
In such cases, a question arises as to wheth-
er the benefit of extended period of carry
forward of MAT credit, which has already
lapsed on or before 1.4.2018, will also get
renewed or not.
The issue under consideration needs to be
addressed having regard to the beneficial nature
of the amendment made, so that assessees
whose MAT credit carry forward period has
lapsed on or before 1.4.2018, should not be
put at a disadvantage and suffer from the
transitional impact of the said amendment.Concluding Remarks
- In line with the legislative intent to pro-
vide relief to assesses and to ensure justice
and equity, it is desirable that an appropriate
clarification, either by way of insertion of an
Explanation in section 115JAA or by way of
issuance of a clarificatory circular to the effect
that such benefit of extended MAT credit carry
forward period would be available even in
those cases where the ten year period has
already expired on or before 1.4.2018, i.e.,
before A.Y.2018-19, but the extended fifteen
year period has still not expired.
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CLARIFICATIONS NEEDED ON AVAILABILITY OF EXTENDED PERIOD FOR MAT CREDIT