ITAT Kolkata: Section 115JB not applicable to banks for 2004-05 and 2006-07. Rectification order on interest upheld.

The ITAT Kolkata affirmed the non-applicability of section 115JB to banking companies for the Assessment Years 2004-05 and 2006-07. The tribunal upheld the correctness of the rectification order regarding interest calculation under section 244A of the Income Tax Act. Consequently, the tribunal dismissed the appeals of the revenue for the mentioned assessment years and also dismissed the appeal of the assessee for the Assessment Year 2004-05.

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Issues:
1. Applicability of section 115JB of the Income Tax Act to a banking company for the Assessment Year 2004-05.
2. Correctness of the rectification order passed by the Deputy Commissioner of Income Tax regarding the calculation of interest under section 244A of the Act.

Issue 1: Applicability of section 115JB to a banking company for AY 2004-05:
The ITAT Kolkata considered the appeal of the assessee regarding the applicability of section 115JB of the Act to a banking company for the Assessment Year 2004-05. The tribunal noted that the issue was previously decided in favor of the assessee by a co-ordinate bench decision for the Assessment Year 2009-10. The tribunal relied on the decision in the case of UCO Bank vs DCIT for the Assessment Year 2002-03, which held that section 115JB was not applicable to banking companies until the Assessment Year 2012-13. The tribunal found that the ld CITA correctly relied on these decisions and granted relief to the assessee. Consequently, the tribunal dismissed the grounds raised by the revenue for both the Assessment Years 2004-05 and 2006-07.

Issue 2: Correctness of the rectification order regarding interest calculation:
Regarding the rectification order passed by the Deputy Commissioner of Income Tax concerning the incorrect calculation of interest under section 244A of the Act, the tribunal observed that the rectification proceedings were specific to the interest calculation issue and not related to the applicability of Minimum Alternate Tax (MAT) provisions under section 115JB. The ld CITA correctly noted that the MAT provisions issue did not arise from the rectification order and therefore could not be a ground of appeal against it. Consequently, the tribunal upheld the ld CITA's decision and dismissed the appeal of the assessee for the Assessment Year 2004-05.

In conclusion, the ITAT Kolkata dismissed the appeals of the revenue for the Assessment Years 2004-05 and 2006-07, along with the appeal of the assessee for the Assessment Year 2004-05. The tribunal affirmed the non-applicability of section 115JB to banking companies for the relevant years and upheld the correctness of the rectification order concerning the interest calculation issue.

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