Section 115JB amendments by Finance Act 2012 apply prospectively to government companies from AY 2013-14 onwards

ITAT Kolkata held that Section 115JB amendments by Finance Act 2012 effective from 01.04.2013 brought government companies like the assessee under its ambit. Prior to amendment, companies not required to prepare financial statements under Schedule VI of Companies Act 1956 were excluded. Post-amendment, all companies including those governed by regulatory Acts must prepare profit and loss accounts per Schedule VI for Section 115JB computation. Following jurisdictional HC precedent, ITAT ruled amendments were substantive, not declaratory, applying prospectively. Revenue's appeal for AY 2012-13 failed but succeeded for AY 2016-17, 2017-18, and 2018-19.

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Issues Involved:
1. Condonation of delay in filing appeals.
2. Applicability of Section 115JB of the Income Tax Act, 1961 to the assessee.
3. Whether the amendment to Section 115JB by Finance Act, 2012 is applicable retrospectively or prospectively.

Condonation of Delay:

The Registry informed that there was a delay of 109 days in filing the appeals. The Department argued that the delay was due to the time taken in receiving the appellate orders and obtaining necessary permissions. The Tribunal found merit in the Department's contentions and condoned the delay, emphasizing that the National Faceless Appeal Centre system should be streamlined to avoid such delays in the future.

Applicability of Section 115JB:

The main issue was whether Section 115JB, which provides for the payment of tax by certain companies based on book profit, was applicable to the assessee, a government undertaking engaged in electricity generation and distribution. The assessee argued that it was exempt from Section 115JB as it maintained accounts in conformity with the Damodar Valley Corporation Act, 1948. However, the Assessing Officer (AO) applied Section 115JB, leading to the assessee's appeal before the Commissioner of Income-tax (Appeals) [CIT(A)], who ruled in favor of the assessee based on past Tribunal decisions.

Amendment to Section 115JB:

The Tribunal considered whether the amendment to Section 115JB by the Finance Act, 2012, effective from 01.04.2013, was applicable retrospectively or prospectively. The Tribunal noted that the Hon'ble Jurisdictional High Court had ruled that the amendment was substantive and applied prospectively. Therefore, for the assessment year (AY) 2012-13, the amendment did not apply, and the Revenue's appeal was dismissed. However, for AYs 2016-17, 2017-18, and 2018-19, the amendment was applicable, and the Tribunal ruled in favor of the Revenue, setting aside the CIT(A)'s findings.

Conclusion:

In summary, the Tribunal condoned the delay in filing the appeals, ruled that Section 115JB did not apply to the assessee for AY 2012-13, but applied for AYs 2016-17, 2017-18, and 2018-19, following the prospective application of the amendment by the Finance Act, 2012.

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