Income Tax Appellate Tribunal rules Section 115JB not applicable to financial corporation providing long-term finance.

The ITAT upheld the ld. CIT(A)'s decision that Section 115JB of the Income Tax Act, 1961 was not applicable to the assessee, a financial corporation providing long-term finance to industrial units in Rajasthan. The ITAT considered previous favorable decisions in the assessee's case and dismissed the revenue's appeal, citing non-applicability of MAT provisions to financial corporations. Despite SLPs filed by the Revenue before the Supreme Court, the ITAT found no reason to interfere with the ld. CIT(A)'s findings and upheld the decision.

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Issues:
Applicability of Section 115JB of the Income Tax Act, 1961 in the case of the assessee.

Analysis:
The appeal filed by the revenue against the order of the ld. CIT(A) dated 23/08/2019 for the A.Y. 2016-17 was heard through video conference due to the Covid-19 Pandemic situation. The revenue contested the denial by the ld. CIT(A) regarding the applicability of Section 115JB of the Income Tax Act, 1961 to the assessee, arguing that it should be subjected to Minimum Alternate Tax (MAT). The assessee, engaged in providing long-term finance to industrial units in Rajasthan, had filed its return of income declaring total income of Rs. 1,49,32,440. The Assessing Officer (A.O.) passed an assessment order determining total income of Rs. 1,83,94,440 by making an addition of Rs. 34,62,000. The ld. CIT(A) had ruled in favor of the assessee, holding that Section 115JB was not applicable. The Revenue, aggrieved by this decision, appealed before the ITAT.

The ld. CIT-DR supported the A.O.'s order, emphasizing that bad debts should be debited to the provision for bad debt as per the Income Tax Act. The ld. AR for the assessee reiterated arguments made before the ld. CIT(A) and pointed out favorable decisions in the assessee's own case in previous assessment years. The ITAT reviewed the contentions and the material on record, noting that the ld. CIT(A) had addressed the issue in her order. The ITAT observed that the Hon'ble ITAT, Jaipur, had previously decided in favor of the assessee on similar issues. The ITAT also referenced the decision of the Hon'ble Jurisdictional High Court in the assessee's case for earlier assessment years, where it was held that MAT provisions were not applicable to financial corporations due to non-maintenance of accounts as per Schedule-VI of the Companies Act.

Further, the ITAT noted that the Revenue's appeals against the Tribunal's orders were dismissed by the Hon'ble Jurisdictional High Court. The ITAT upheld the ld. CIT(A)'s decision, considering the decisions of the Coordinate Bench of the Tribunal and the Hon'ble Rajasthan High Court in the assessee's favor. Despite SLPs filed by the Revenue before the Supreme Court, no judgment had been passed. The ITAT, based on the totality of facts and following previous decisions, found no reason to interfere with the ld. CIT(A)'s findings and dismissed the revenue's appeal. The order was pronounced on 24th March, 2021.

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