MAT liability for electricity companies was not retrospective before the 2012 amendment to section 115JB.

Section 115JB did not apply to a power company for assessment years before 01.04.2013 because, before the Finance Act, 2012 amendment, MAT computation under the statute required a profit and loss account prepared under Parts II and III of Schedule VI to the Companies Act, 1956. Companies engaged in generation and sale of electricity were governed by the special electricity regulatory framework, and the later insertion of Explanation 3 and the revised sub-section (2) was a substantive expansion of MAT liability. The amendment could not operate retrospectively, so the Revenue's challenge to pre-2013 assessments failed.

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Issues: Whether section 115JB of the Income-tax Act, 1961 applied to a company engaged in generation and sale of power for the assessment years prior to 2013-14, where its accounts were prepared under the governing electricity law and not under Parts II and III of Schedule VI to the Companies Act, 1956.

Analysis: The amended section 115JB(2), brought in by the Finance Act, 2012, expressly extended MAT computation to companies governed by special enactments and took effect from 01.04.2013. Prior to that amendment, the statutory scheme required preparation of profit and loss account under Parts II and III of Schedule VI to the Companies Act, 1956, while companies engaged in generation or supply of electricity were governed by their own regulatory law. The Electricity Act, 2003 operates as a special law, and the Companies Act itself recognises that electricity companies are governed by the special regulatory framework to the extent of inconsistency. The amendment introducing Explanation 3 and the revised sub-section (2) was substantive and could not be applied retrospectively to earlier assessment years.

Conclusion: Section 115JB was not applicable to the assessee for the years in question, and the Revenue's challenge failed.

Final Conclusion: The Revenue's appeals, as well as the connected cross objection on the same issue, could not be sustained because the MAT provisions were held inapplicable to the power company for the relevant pre-2013 assessment years.

Ratio Decidendi: A substantive amendment enlarging the class of companies liable to MAT cannot be applied retrospectively, and a company governed by a special electricity statute is outside section 115JB for assessment years prior to the amendment's effective date.

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