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TaxTMI 
TaxTMI 
TaxTMI 
2021 (12) TMI 1475
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....pellate Tribunal has correctly interpreted the Explanation-3 to the section 115JB of the Income Tax Act, 1961 as amended by Finance Act, 2012 w.e.f. 1st April, 2013? (c) Whether the amendment brought in Section 115JB of the Income Tax Act, 1961 read with Explanation-3 thereto by the Finance Act, 2012 is applicable in the case of the assessee with effect from the Assessment Year 2013-14 onwards or such provision covers the assessment in the case of the assessee for the Assessment Year 2010-11? We have heard Mr. Smarajit Roychowdhury, learned counsel for the appellant/revenue and Mr. Rahul Tangri, learned counsel for the respondent/assessee. The assessee is engaged in the generation of power and has been established under the provisions of Damodar Valley Corporation Act, 1948. The assessee filed their return of income on 29th September, 2010 declaring total income as per the requirement of Part-B-TI of the return format; whereas the actual return was a loss and the assessee had claimed benefit of carry forward of the same as business loss and refund. The return was processed under Section 143(1) of the Act. Subsequently, the return was selected for scrutiny and notice under Sec....
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....een clearly stipulated and in terms of sub-Section (1) of Section 143 the respondent Corporation is liable to pay any tax on income levied by the Central Government in the same manner and in the same extent as a company. Therefore, the revenue is before us contending that the stand taken by the assessing officer has to be sustained and the contention of the assessee that Section 115JB would not apply and has to be rejected. We need not elaborate much to decide the substantial question of law raised before us as identical issue has been considered by the High Court of Kerala in the case of Kerala State Electricity Board vs. Deputy Commissioner of Income Tax reported in 2010-TIOL-827-HC-Kerala-IT. The first of the two substantial questions of law framed in the said decision was whether Section 115JB is applicable to the appellant/assessee therein namely, Kerala State Electricity Board. To be noted that Kerala State Electricity Board is a statutory corporation constituted by the notification of the State of Kerala pursuant to the power vested in it by virtue of Section 5 of the Electricity Supply Act, 1948. In terms of Section 12 of the said Act, Kerala State Electricity Board was dec....
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....ular issued by the CBDT and observed that the same is binding on the department. Thus, the Court concluded that the provisions namely, sub-Section(2) of Section 115JB would not stand attracted and consequently, the charging provision, namely, subSection (1) of Section 115JB would not stand attracted. To support such finding, reliance is placed on the decision of the Hon'ble Supreme Court in CIT vs. B. C. Srinivasa Setty reported in [1981] 128 ITR 294(SC) and CIT vs. Eli Lilly and Co.(India) P. Ltd. reported in [2009] 312 ITR 225(SC). Thus, in conclusion the court held that all taxation is meant for the welfare of the people in a constitutional republic and, therefore, the enquiry as to the mischief sought to be remedied by the amendment becomes irrelevant and, therefore, the Court held that the fiction fixed under Section 115JB cannot be pressed into service against the appellant therein while making the assessment of the tax payable under the Income Tax Act. On this issue, it would be beneficial to refer to the decision of the Hon'ble High Court of Karnataka in CIT vs. ING Vysya Bank Ltd. reported in [2020]-TIOL-1313-HC-KAR- IT. In the said decision it was held that provision of S....
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....ub-Section(2) but it cannot fulfill both the conditions. 10. From perusal of general arrangement of provisions of the Income Tax Act, 1961 where under each head of income, the charging provision is accompanied by a set of provisions for computing the income subject to that charge. The character of computation provisions in each case bears a relationship to the nature of the charge. Thus, the charging section and computation provisions together constitute an integrated code. When there is a case to which computation provision cannot apply at all, it is evident that such a case was not intended to fall within charging section. [SEE: 'COMMISSIONER OF INCOME TAX,BANGALORE VS. B.C.SHRINIVASA SETTY', 1981 VOL 128 ITR 294] = 2002-TIOL-587-SC-IT-LB. Themachinery provisions provided in Sub- Section (2) of Section 115JB of the Act would be rendered wholly unworkable in case of a Banking company. It is also pertinent to mention here that the Companies Act, 1956 has excluded insurance, banking companies or the companies engaged in the generation or supply of electricity from the purview of Section 211(1) of the Companies Act, 1956 and resultantly from the purview of Section 115JB of....
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....g such class of company. Combined reading of this proviso to sub-section (1) of Section 129 of the Act, 2013 and clause (b) of Subsection (2) of Section 115JB of the Act would show that incase of insurance or banking companies or companies engaged in generation or supply of electricity or class of companies for whom financial statement has been specified under the Act governing such company, the requirement of preparing the statement of accounts in terms of provisions of the Companies Act, is not made. Clause (b) of sub-section (2) provides that in case of such companies for the purpose of Section 115JB the preparation of statement of profit and loss account would be in accordance with the provisions of the Act governing such companies. This legislative change thus aliens class of companies who under the governing Acts were required to prepare profit and loss accounts not in accordance with the Companies Act, but in accordance with the provisions contained in such governing Act. The earlier dichotomy of such companies also, if we accept the revenue's contention, having the obligation of preparing accounts as per the provisions of the Companies Act has been removed. 18. These....