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10. Referring to the provisions of chapter XVII-C relating to advance tax, it was submitted by the learned counsel for the revenue that section 207 imposes the liability for payment of advance tax and that section 208 stipulates that the advance tax must be paid in the financial year itself. Section 209 prescribes the mode of computation of advance tax and, as per sub-clause (d) of sub-section (1) thereof, only the amount of TDS is to be reduced for arriving at the figure of advance tax. A reference was then made to section 140A which lays down the procedure for payment and computation of self-assessment tax. This, too, according to the learned counsel for the revenue, speaks of reduction of only the TDS amount from the tax payable. It was submitted that whether it is the computation of advance tax or self- assessment tax, the only reduction permissible is of the TDS amount and there is no mention of MAT credit.

15. Lastly, it was argued that hardship or inequity is no ground for not charging interest under sections 234B and 234C before allowing MAT credit. It was contended that it is a well established principle that equity has no place in tax laws. It was therefore urged that the questions be answered in favour of the revenue and the appeals be allowed.

Contentions on behalf of the Respondents/Assessees

16. Mr C.S. Aggarwal, the learned senior counsel who appeared for the respondent/assessee in ITA 402/2005, submitted that for an assessee to be liable to pay interest under section 234B, the assessee must first be liable to pay advance tax. The liability to pay advance tax, in turn, arises under section 208 if the advance tax payable by the assessee is Rs 5000/- or more. It was further contended that the ―advance tax payable‖ is to be computed in accordance with section 209(1)(a) whereunder the assessee is required to estimate its income and calculate the tax payable thereon and thereafter to reduce from it the TDS amount. It was further contended that by virtue of section 115JAA(4) the assessee is entitled to set off MAT credit at the stage at which the tax has become payable. Consequently, it was submitted, that the assessee is entitled to take into account the tax credit (MAT credit) available to it under section 115JAA when it computes the tax payable under section 209 of the said Act. It was submitted that the tax payable by a company under section 209 is the tax payable on the current income less the Tax credit available for set off. It was therefore contended that the liability to pay interest under section 234B can only be computed after the liability to pay advance tax is calculated, which, in turn, depends on the tax payable on the current income. Such tax payable has to be computed after setting of the Tax Credit available under section 115JAA. Thus, interest under section 234B can only be computed after the tax credit under section 115JAA is set off against the tax payable on the current income.