Minimum Alternate Tax applicability to banks: appeal by revenue not maintainable where book-profit tax falls below administrative threshold.

Question whether the Minimum Alternate Tax regime applied to a foreign bank and whether Revenue's appeal was maintainable: the article explains that the assessment used book profit computation under the MAT regime and, because the tax computed on book profits was below the administrative monetary threshold, the Revenue's appeal was treated as not maintainable; the analysis further notes that the broader question of MAT applicability to banking institutions is concluded by existing precedent, so the assessment under the MAT computation remains operative in favour of the assessee.

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Issues: Whether the provisions of Section 115JA of the Income-tax Act, 1961 are applicable to the respondent bank (foreign bank) for assessment year 1999-2000 and whether the Revenue's appeal is maintainable.

Analysis: Section 115JA was the provision applied in the assessment order for computation of book profit and tax. The assessment computed book profit and resultant tax under Section 115JA; the tax amount on that computation is below the Rs. 2 crore threshold referenced in the Central Board of Direct Taxes Circular dated 17 September 2024. The issue of applicability of MAT provisions to banking companies, including foreign banks, is addressed by prior precedent of this Court in Commissioner of Income Tax-LTU v. Union Bank of India which covers the question raised.

Conclusion: The appeal is not maintainable because the tax computed under Section 115JA is below the Rs. 2 crore threshold and the issue is covered by existing precedent; accordingly the appeal filed by the Revenue is dismissed and the decision under Section 115JA stands in favour of the respondent bank (assessee).

Ratio Decidendi: An appeal by Revenue challenging application of Section 115JA is liable to be dismissed where the tax on book profit computed under Section 115JA is below the statutory/administrative threshold and the question of applicability to banking institutions is already covered by binding precedential decision of the Court.

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