Banking companies exempt from Section 115JB Minimum Alternate Tax before April 2013

The ITAT Mumbai held that Section 115JB (Minimum Alternate Tax) provisions were not applicable to banking companies prior to April 1, 2013, following the Bombay HC decision in Union Bank of India case. The assessee banking company was therefore not subject to MAT for assessment year 2005-06. Additionally, the tribunal allowed interest under Section 244A(1A) from January 1, 2017 to September 3, 2021, as the appeal effect order was passed after this provision's introduction, despite the assessment year being 2005-06. The appeal was decided against the Assessing Officer on the interest issue.

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Issues Involved:
The issues involved in this case are:
1. Applicability of Section 115JB of the Income-tax Act, 1961 to a banking company.
2. Eligibility for interest under Section 244A(1A) of the Act.

Applicability of Section 115JB:
The Dy. Commissioner of Income Tax filed an appeal against the appellate order, contending that Section 115JB of the Act should apply to the assessee bank. However, the learned CIT (A) held that this provision does not apply to the assessee bank for the assessment year 2005-06. The CIT (A) relied on previous judgments and the Banking Regulation Act, 1949, stating that prior to the amendment by Finance Act, 2012, Section 115JB did not apply to banking companies. The ITAT upheld this decision, citing the Hon'ble Bombay High Court's ruling and dismissed the appeal on this ground.

Eligibility for Interest under Section 244A(1A):
The assessee raised a ground against the order giving effect, claiming that interest under Section 244A(1A) was not granted within the specified time limit. The assessee argued that interest should be paid from a certain date until the receipt of the order. The ITAT found in favor of the assessee, stating that the order giving effect was passed after the introduction of Section 244A(1A) and thus, the assessee was entitled to interest from the date of receipt of the order. The ITAT dismissed the appeal filed by the Assessing Officer on this ground.

In conclusion, the ITAT upheld the decision of the CIT (A) regarding the non-applicability of Section 115JB to the assessee bank for the assessment year 2005-06. Additionally, the ITAT ruled in favor of the assessee, allowing interest under Section 244A(1A) from the date of receipt of the order. The appeal filed by the Assessing Officer was dismissed accordingly.

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