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Issues: Whether section 115JB of the Income-tax Act, 1961 applies to the assessee bank, and whether the consequent book-profit adjustments can survive once that question is answered.
Analysis: The appeal turned on the applicability of the Minimum Alternate Tax provision to a nationalised bank constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980. The Tribunal followed its earlier coordinate-bench and Special Bench view that clause (b) of section 115JB(2) is not attracted where the entity is not a company formed and registered under the Companies Act and is instead governed by its own regulatory statute. The deeming fiction in section 11 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 was treated as limited to the Income-tax Act and insufficient to convert the bank into a company for the purposes of section 115JB. Once the principal MAT issue failed against the Revenue, the associated book-profit adjustment issue did not require separate adjudication.
Conclusion: Section 115JB was held inapplicable to the assessee bank, and the MAT computation made by the Assessing Officer could not be sustained. The related book-profit adjustment issue was rendered infructuous.
Ratio Decidendi: A banking entity constituted under a special statute, and not formed or registered under the Companies Act, is not brought within section 115JB merely because it is deemed to be an Indian company for limited income-tax purposes.
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