TaxTMI 
TaxTMI 
2023 (1) TMI 623
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....sessee. 2. The appellant craves its rights to add, amend or later any of the grounds on or before the hearing." 2.1 The Revenue has also raised prayer for admitting the additional ground on 29.09.2022 the additional ground raised are as under:- "1. Whether on the facts and circumstances of the case and in law, the CIT(A) was justified in holding that the assessee cannot be termed as a company and provisions of section 115JB are not applicable on the assessee, though as per section 2(17) r.w.s. 2(26) (ia) of the Act, the assessee is a 'Company' and the MAT provisions are applicable to all companies. 2. Whether on the facts and circumstances of the case and in law, the CIT(A) was justified in holding that the assessee is not liable to MAT even after amendment in the Act and section 115JB(2) has been amended by Finance Act, 2012 w.e.f 01.04.2013 though, after amendment of section 115JB(2), by Finance Act, 2012 w.e.f. 01.04.2013, not only the companies registered under the Companies Act are subject to the MAT provisions, but companies in whose case second proviso to section 129(1) of the Companies Act, 2013 are applicable (if such companies prepare....
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...., taken up for disposal on merits. 4.3 It is observed that while processing the return of income, the AO has levied minimum alternate tax (MAT) u/s 115JB of the Act amounting to Rs.2,47,61,511/- Aggrieved by this order, the appellant has preferred this appeal. The appellant has contended that the Hon'ble Rajasthan High Court has, in relation to an earlier AY, held that the MAT provisions would not be applicable in the case of the appellant. Thus, the appellant has contended that the action of the AO is contrary to the decision of the Hon'ble jurisdictional High Court of Rajasthan. Accordingly, the appellant has sought for appropriate relief against the AO's order. 4.4 It is observed that the issue is also covered by the decision of the Hon'ble ITAT, Jaipur Bench in the appellant's own case for AY 2016-17 in DCIT vs. M/s Rajasthan Financial Corporation, ITA No. 1244/JP/2019 dated 24.03.2021 wherein it has been held as under: "7. We have considered the rival contentions and carefully perused the material placed on record. From perusal of the record, we observe that the Id.CIT(A) has dealt with the issue in 2.3 to 2.3.2 of her order and t....
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.... respondent assessee will be governed under Section 115 JA read with Section 2(18)(a). On a plain reading as reproduced above and in view of forgoing conclusion and even as per statement of Mr. Mathur, it will not be covered. However, he has tried to take support of Section 43 which is misconceived. While interpreting the taxing statute, the Court has to rely upon the taxing statute and not any other provisions. 11. In that view of the matter, the issue is answered in favour of the assessee against the department." Accordingly, in view of the decision of the Hon'ble Jurisdictional High Court in assessee's own case, we find no error or illegality in the order of Id. CIT (A) qua this issue." 2.3.2 Respectfully following decision, it is held that this issue is covered in favour of appellant. Therefore, provisions of section 115JB are not applicable in assessee's case and it is not to be subjected to MAT. This ground of appeal is allowed." 4.5 Respectfully following the decisions of the Hon'ble jurisdictional High Court of Rajasthan as well as the decision of the Hon'ble ITAT Jaipur Bench as discussed above, the AO is directed not....
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....cable to the assessee. The Hon'ble High Court gave its finding in para-10 and 11 of the judgement as under- "10. Before proceeding with the matter, the question of law which has been framed is very clear whether the respondent assessee will be governed under section 1151A read with section 2(18)(a) of the Act. On a plain reading as reproduced above and in view of the forgoing conclusion and even as per statement of Mr. Mathur, it will not be covered However, he has tried to take support of section 43 which is misconceived. While interpreting the taxing statute, the Court has to rely upon the taxing statute and not any other provisions, 11. in that view of the matter, the issue is answered in favour of the assessee against the department." The reference to section 43 in para-10 is section 43 of State Financial Corporation Act ( SFC Act hereinafter)." 5. It is clear from the judgement of the Hon'ble High Court that the High Court held that section 2(18)(a) of the IT Act is not applicable in the case of the assessee and consequently section 115JA will also not be applicable, as the assessee is not a "company" and provisions of section 1153A will only be appli....
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....The assessee is a 'company" or not, can be decided with the help of the provisions of section 2(17) of the Act, and not relying upon section 2(18)(a) of the Act. Section 2(17) reads as under- "company" means- (i) any Indian company or (ii) any body corporate incorporated by or under the laws of a country outside India, or (iii) any institution, association or body which is or was assessable or was assessed as a company for any assessment year under the Indian Income-tax Act, 1922 (11 of 1922) or which is or was assessable or was assessed under this Act as a company for any assessment year commencing on or before the 1st day of April. 1970, or (iv) any institution, association or body, whether incorporated or not and whether Indian or non-Indian, which is declared by general or special order of the Board to be a company: Provided that such institution, association or body shall be deemed to be a company only for such assessment year or assessment years (whether commencing before the 1st day of April, 1971 or on or after that date) as may be specified in the declaration: Further, section 2(26) defines Indian company&#....
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....uestion regarding applicability of rule 72 of the Rules having not been even referred to, much less considered by this Court in the earlier appeals, it cannot be said that the point is concluded by the same and no longer res integra and accordingly this court is called upon to decide the same." The Hon'ble Supreme Court in the case of State of U.P. And Anr v M/s Synthetics and Chemicals Ltd and Anr reported in 1991 SCC (4) 139 has held that- 'Incurio literally means 'carelessness'. In practice per incurium appears to mean per ignoratium." English Courts have developed this principle in relaxation of the rule of stare decisis. The quotable in law' is avoided and ignored if it is rendered, 'in ignoratium of a statute or other binding authority". (1944 IKB 718 Young v. Bristol Aeroplane Ltd. Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution which embodies the doctrine of precedents as a matter of law. In Jaisri Sohu v Rajdewan Dubey, [1962] 2 SCR 558 this Court while pointing out the procedure to be followed when conflicting decisions are placed before a Bench extracted a passage from....
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....this issue. In this regard, attention of the Hon'ble Bench is invited to the discussion made in para-6 above, wherein it has been clarified that as per the provisions in force in the year under consideration, in case of companies to which the second proviso to section 129(1) of Companies Act is applicable, book profits will be profit as per statement of profit and loss in accordance with the provisions of the Act governing such companies with certain adjustments as mentioned in Explanation-I to section 115JB. Therefore, in cases where the company is not registered in the Companies Act, but in whose case second proviso to section 129 is applicable, the MAT will be levied. Section 129 of the Companies Act reads as under- #129. Financial statement. (1) The financial statements shall give a true and fair view of the state of affairs of the company or companies, comply with the accounting standards notified under section 133 and shall be in the form or forms as may be provided for different class or classes of companies in Schedule III: Provided that the items contained in such financial statements shall be in accordance with the accounting standards: Prov....
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....in view of the judgement of the Hon'ble Supreme Court in the case of National Thermal Power Corporation v CIT reported in 229 ITR 383. and setaside the order of CIT(A) and order of the A.O. may kindly be restored." 8. In addition to the above written submission the ld. DR vehemently argued that if the contention of the assessee is accepted then the purpose of the amendment made vide Finance Act 2012 will be defeated and the very purpose of this amendment was to tax the those companies under the special provision and this applies to the assessee company too. The ld. DR relying on the judgment of NTPC's case submitted the additional grounds and differentiated the judgment of the Jurisdictional High Court. He has submitted that before the court the provision of section 2(17) were never brought to the notice of the court. Therefore, he on conjoint reading of the provision of section 2(17) r.w.s. 115JB supported that even though the assessee is not registered under the companies act, they are covered under the MAT provisions as per section 115JB of the Act. Considering the amendment made in the law and definition of company the assessee is liable to MAT provisions. The ld. DR arg....
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.... or before the 1st day of April, 1970, or (iv) any institution, association or body, whether incorporated or not and whether Indian or non-Indian, which is declared by general or special order of the Board to be a company : Provided that such institution, association or body shall be deemed to be a company only for such assessment year or assessment years (whether commencing before the 1st day of April, 1971 or on or after that date) as may be specified in the declaration ; Provision of section 2(18) (18) "company in which the public are substantially interested"-a company is said to be a company in which the public are substantially interested- (a) if it is a company owned by the Government or the Reserve Bank of India or in which not less than forty per cent of the shares are held (whether singly or taken together) by the Government or the Reserve Bank of India or a corporation owned by that bank ; or (aa) if it is a company which is registered under section 25 of the Companies Act, 1956 (1 of 1956)9 ; or (ab) if it is a company having no share capital and if, having regard to its objects, the nature and composition o....
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....een held by the parent company or by its nominees throughout the previous year. Explanation.-In its application to an Indian company whose business consists mainly in the construction of ships or in the manufacture or processing of goods or in mining or in the generation or distribution of electricity or any other form of power, item (B) shall have effect as if for the words "not less than fifty per cent", the words "not less than forty per cent" had been substituted; Provision of section 2(26) (26) "Indian company" means a company formed and registered under the Companies Act, 195616 (1 of 1956), and includes- (i) a company formed and registered under any law relating to companies formerly in force in any part of India (other than the State of Jammu and Kashmir and the Union territories specified in sub-clause (iii) of this clause) ; (ia) a corporation established by or under a Central, State or Provincial Act ; (ib) any institution, association or body which is declared by the Board to be a company under clause (17) ; (ii) in the case of the State of Jammu and Kashmir, a company formed and registered under any law for....
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....pplicable, shall, for the purposes of this section, prepare its "[statement of profit and loss] for the relevant previous year in accordance with the provisions of the Act governing such company:] We are reproducing the second proviso to sub section (1) of section 129 of the Companies act,2013 as under Provided further that nothing contained in this sub-section shall apply to any insurance or banking company or any company engaged in the generation or supply of electricity, or to any other class of company for which a form of financial statement has been specified in or under the Act governing such class of company: We submit that since the corporation does not prepare its statement of profit and loss as per schedule III of the Companies act,2013, therefore clause (a)of sec 115J8(2) is not applicable to the Corporation. Clause (b) of Sec 115JB(2) is also not applicable to the Corporation as the second proviso to sub section (1) of sec 129 of the Companies act, 2013 is applicable only to the Companies as defined under the Companies act,2013. Any reference to the word Company in second proviso to sub section (1) of section 129 means the Co....
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.... We submit that section 115JB is applicable to the assesses covered u/s 115JB(2) of the act. As the Rajasthan Financial Corporationis not covered under any of clause (a) and (b) of sec115JB(2) of the act as explained above, therefore MAT provisions u/s 115 JB are not applicable to the Corporation. (ii) Additional Ground No 2-Whether on the facts and circumstances of the case and in law, the CIT(A) was justified in holding that the assessee is not liable to MAT even after amendment in the Act and section 115JB(2) has been amended by Finance Act, 2012 w.e.f. 01.04.2013 though, after amendment of section 115JB(2), by Finance Act, 2012 w.e.f. 01.04.2013not only the companies registered under the Companies Act are subject to the MAT provisions, but companies in whose case second proviso to section 129(1) of the Companies Act, 2013 are applicable (if such companies prepare profit and loss account as per the provisions of the Act governing such companies) are also subject to the provisions of MAT. Our submission We submit that even after the amendment of sec 115JB(2), by Finance Act,2012 w.e.f 01.04.2013 the MAT provisions are not applicable to the Rajas....
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....submit that Rajasthan Financial Corporation had no option on or before 1" day of April 2012, to prepare its statement of Profit & Loss as per schedule III to the Companies act,2013 as the Corporation is not a Company as defined in the Companies act.2013. The explanation 3 of sec 115JB of the Income tax act, 1961 made it very clear that second proviso to sub section (1) of sec 129 of the Companies act,2013 is not applicable to the Rajasthan Financial Corporation. Keeping in view of the above submission, we request the honorable bench to kindly dismiss the appeal filed by the Department." 11. In addition to the above written submission the ld. AR of the assessee submitted that the assessee is not registered as company and therefore, even though the same is not argued before the court in accordance with the provision of section 2(17) instead it was as per provision of section 2(18) will not make any difference as the status of the assessee is not company, as per provision of the either of the section and therefore, he supported the order of the lower authority and also heavily relied upon the order of the Jurisdictional High Court in assessee's own case. 12. We have con....
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....oses of this section, prepare its statement of profit and loss for the relevant previous year in accordance with the provisions of Schedule III to the Companies Act, 2013 (18 of 2013); or (b) being a company, to which the second proviso to sub-section (1) of section 129 of the Companies Act, 2013 (18 of 2013) is applicable, shall, for the purposes of this section, prepare its statement of profit and loss for the relevant previous year in accordance with the provisions of the Act governing such company: As it is evident that section 115JB being a special provision and it a code itself defines the coverage of the assessee covered in sub-section 2 of section 115JB. This section neither deal with the company or Indian company it deals with the assessee being company and provision of the sub-section (2) very well defines it coverage. Thus, we consider the arguments of the ld. DR but considering the provision of section 11JB(2) and the decision of the jurisdictional high court in the case of the assessee we do not find any force whether the Honourable Jurisdictional High Court has considered the provision of section 2(17), 2(18) or 2(26) dealt with or not. Here the charging s....
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....es registered in foreign countries to be "companies " for purposes of taxation in India, statutory corporations established by a Central, Provincial or State enactment, such as road transport corporations, air trans- port corporations etc., have been declared to be companies. Foreign corporations in which the capital is held wholly or partly by a foreign Government have also been declared as "companies" for the purposes of income-tax, where such corporations are legal entities separate from the Government and are capable of holding property independently and of suing and being sued according to the laws of that country. The provision has also been used on a few occa- sions to confer the status of company on bodies such as Chambers of Commerce, Clubs, etc. even though these bodies do not possess the ordinary characteristics of a company limited by shares. The declaration under this provision has been given in some cases with retrospective effect to cover past years as well. Such a retrospective declaration was given for special reasons such as that the application for the declaration was delayed for some reason or the other....