Section 115JB does not cover statutory corporations outside the Companies Act framework, and later amendment applies prospectively.

Section 115JB of the Income-tax Act was treated as inapplicable to a statutory corporation whose accounts are governed by its special statute and not by the Companies Act framework, because the computation machinery under the provision presupposes company-style accounts. The Court also accepted that the Finance Act, 2012 amendment to Section 115JB was a substantive change and therefore operated only prospectively from assessment year 2013-14 onwards. On both issues, the answer was against the revenue, and the appeal failed.

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Issues: (i) Whether Section 115JB of the Income-tax Act, 1961 applied to the assessee corporation for the assessment year in question. (ii) Whether the amendment to Section 115JB brought in by the Finance Act, 2012 operated prospectively from assessment year 2013-14 onwards.

Issue (i): Whether Section 115JB of the Income-tax Act, 1961 applied to the assessee corporation for the assessment year in question.

Analysis: The assessee was a statutory corporation constituted under the Damodar Valley Corporation Act, 1948 and was required to be assessed in the manner applicable to it under its governing statute. The Court treated the relevant statutory scheme as pari materia with the scheme considered in earlier decisions involving electricity and banking corporations, where the accounts were not prepared under the Companies Act framework. It followed the reasoning that the machinery under Section 115JB, which proceeds on preparation of accounts in the manner contemplated for companies under the Companies Act, did not fit such statutory corporations.

Conclusion: Section 115JB was held not to apply to the assessee, and the answer was against the revenue.

Issue (ii): Whether the amendment to Section 115JB brought in by the Finance Act, 2012 operated prospectively from assessment year 2013-14 onwards.

Analysis: The Court accepted the view that the amendment to Section 115JB was a substantive legislative change and not merely declaratory or classificatory. It relied on the legislative context and the earlier judicial view that the amendment aligned the provision with the governing Acts of certain classes of companies but did not retrospectively enlarge the charge for prior assessment years.

Conclusion: The amendment was held to apply only prospectively from assessment year 2013-14 onwards, and the answer was against the revenue.

Final Conclusion: The substantial questions of law were answered against the revenue, and the appeal failed.

Ratio Decidendi: A statutory corporation whose accounts are governed by its special statute and not by the Companies Act framework is outside the ambit of Section 115JB for prior years, and a substantive amendment to that provision operates only prospectively unless the legislature clearly indicates otherwise.

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