AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (1) TMI 623
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.... 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 profit and loss account as per the provisions of the Act governing such co....
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....s 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 the same is reproduced below: "2.3 I have perused the facts of the case, the asso assessment order and the submissions of the app....
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.... 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 to levy tax under the provisions of section 115JB of the Act. With this, the Ground No. 1 raised by the appellant is allowed. The Ground No. 2 being vague and general in nature, requires no separate ....
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....151A 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 applicable in the case of the company. So, the moot point is whether the assessee is a company or not and whether section 2(18)(a) is relevant or not for deciding this issue. Before proceeding further, it is important to bring into the notice of the Hon'ble Bench that the Deaprtment has....
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....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' as under- "Indian company" means a company formed and registered under the Companies Act, 1956 (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 fill of this clause]); (ia) a....
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....9 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 Halsbury Laws of England incorporating one of the exceptions when the decision of an Appellate Court is not binding Does this principle extend and apply to a conclusion of law, which was neither raised nor preceded by any consideration. In other words can such conclusions be considered as declaration of low? Here again the English Courts and jurists have carved out an exception to the rule of precedents. It has been explained as rule of sub-s....
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....stments 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: 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: Provided also that the financial statements shall not be treated as not disclosing a true and fair view of the state of affairs of the company, merely by reason of th....
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....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 argued that there are two types of company one is registered under the companies and another not registered under the company act and the assessee is falling in another category even though not registered under the companies Act assessee is liable to MAT provisions. 9. To drive home the various contentions so raised the ld. DR has also relied upon the following judgements; Submission dated 19/10/2022 S. No. Description of the case Page No. 1 Kunhayammed & Ors Vs State of Kerala & Anr. On 19 July, 2000 (Supreme Court of India) 1-17....
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.... (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 of its membership and other relevant considerations, it is declared by order of the Board to be a company in which the public are substantially interested : Provided that such company shall be deemed to be a company in which the public are substantially interested 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 ; or (ac) if it is a mutual benefit finance company, that is to say, a company which carries on, as its principal business, the business of acceptance of deposits from its members and which is declared by the Central Government under section 620A10 of the Companies Act, 1....
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....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 the time being in force in that State ; (iii) in the case of any of the Union territories of Dadra and Nagar Haveli, Goa†, Daman and Diu, and Pondicherry, a company formed and registered under any law for the time being in force in that Union territory : Provided that the registered or, as the case may be, principal office of the company, corporation, institution, association or body in all cases is in India ; 10. Per contra, the ld. AR appearing on behalf of the assessee submitted a detailed written submission which is reiterated here in below:- "Rajasthan Financial Corporation is a Corporation registered under State financial Corporation Act, 1951. The Corporation filed its Income tax return u/s 139(1) of the Income tax act, 1961 for the AY 2019-20 and computed the tax liability as per the norm....
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....he 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 Company as defined in the Companies act,2013 as that is a Companies Act,2013 section and where Company means only the Company as defined under the Companies act, 2013 and not in any other act. ( Company has been defined in sec 2(20) of the Companies act, 2013) We submit that second proviso to sub section (1) of section 129 of the Companies act, 2013 is applicable to the Companies which fall in the definition of company as defined under the Companies act but are also governed by other acts and prepare their "[statement of profit and loss] for the relevant previous year in accordance with the provisions of the Act governing such company:] such as Electricity Companies though they are registered under the Companies act but are governed by the Electricity act, 2003 and prepare their Statement of profit & loss as per the provisions under the Electricity act, 2003 Banking Companies though registered under the Companies ac....
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....ject 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 Rajasthan Financial Corporation. As per amendment, clause (b) has been inserted by the Finance act,2012and clause (b) of Sec 115JB(2) is also not applicable to the Corporation as the second proviso to sub section (1) of Sc. 129 of the applicable only to the companies as defined under the companies act. Any reference to the word Company in second proviso to sub section (1) of section 129 means the Company as defined in the Companies act, 2013 as it is Company law section and where Company means only the Company as defined under the Company law and not in any other act. ( Company has been defined in sec 2(20) of the Companies act, 2013) We submit that second proviso to sub section (1) of section 129 of the Companies act, 2013 is applicable to the Companies as defined under the Companies act, 2013 but are governed by other acts and prepare its "[statement of profit and loss] for the relevant previous year in accordance with the provisions of the Act governing such company:] such as Electricity Com....
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....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 considered the rival contentions and submission placed on record by both the parties, the orders of the lower authorities and also gone through the judicial decision cited before us to drive home to the contentions so raised. The bench noted that the issue before us about the applicability of provision of section 115JB to the assessee "Rajasthan Financial Corporation" which is a Corporation registered under State financial Corporation Act, 1951. For these we have gone through the definition of company as given in Section 2(17) which defines company and it includes Indian Company. We have also gone through the provision of section 2(26) which defines Indian company and thereby Section 2(26)(ia) includes a corporation established by or under a Central, State or Provisional Act as argued by the ld. DR. We have also considered the plea of the ld. DR that section 115 JB section it self is a code for charging tax for a company and considering the definition of company as given in section 2(17) and 2(26) assessee is subjected to this speci....