TaxTMI 
TaxTMI 
2026 (7) TMI 1103
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....ommon judgment and order for different Assessment years is under challenge and since the issues are common in all the tax appeals, substantial questions of law are recorded from Tax Appeal No.656 of 2025: "A] "Whether on the facts and in the circumstances of the case and in law, the Appellate Tribunal is justified in quashing the rectification order holding that MAT u/s 115JB of the Act is not leviable even under the post amendment by Finance Act, 2012 effective from 01/04/2013, without appreciating the fact that in view of the insertion of clause (b) to Section 115JB(2) of the Income-tax Act, the assessee viz. the National Dairy Development Board (NDDB), being a statutory corporation established under a Central Act and falls within 'any other class of company' as per the second proviso to Section 129(1) of the Companies Act, 2013, clearly falls within the ambit of the provisions of Section 115JB of the Income-tax Act, 1961? [B] "Whether on the facts and in the circumstances of the case and in law, the Appellate Tribunal is justified in quashing the rectification order holding that MAT u/s 115JB of the Act is not leviable in the case of National Dairy Development ....
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....) 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; 7. As per the provisions of section 2(20) of the Companies Act, 2013, "company" is defined as under: "(20) Company means a company incorporated under this Act or under any previous company law." 8. Section 115JB of the Act reads as under: SECTION 115JB : Special provision for payment of tax by certain companies. (1) Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee, being a company, the income-tax, payable on the total income as computed under this Act in res....
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....on, shall correspond to the accounting policies, accounting standards and the method and rates for calculating the depreciation which have been adopted for preparing such accounts including [statement of profit and loss] for such financial year or part of such financial year falling within the relevant previous year." 9. The aforesaid provision of sub-section (2) has been amended with effect from 01.04.2013 by the Finance Act of 2012. Prior to amendment sub-section (2) reads as under: "(2) Every assessee, being a company, shall, for the purposes of this Section, prepare its profit and loss account for the relevant previous year in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act, 1956 (1 of 1956)." 10. The Assessing Officer raised the liability under Minimum Alternate Tax (MAT) by computing Book Profit of the respondent assessee. 11. The Assessing Officer also passed the order under section 154 of the Act to rectify the assessment order and order giving effect of CIT(Appeals) in the first round. 12. CIT(Appeals) allowed the appeal filed by the assessee and deleted MAT liability fastened by the Assessing Officer on the groun....
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....of India and also the State Governments. Such accounts of the appellant are required to be audited by the Comptroller and Auditor-General of India or such other person duly authorised by the Comptroller and Auditor-General of India. The accounts so prepared along with the audit report is required to be laid annually before the State Legislature and also to be published in the prescribed manner and copies of such publication shall be made available for sale at a reasonable price, obviously for the benefit of the general public who wish to scrutinise the accounts. 16. Thus, it can be seen that coming to the maintenance of the accounts, the appellant though is deemed to be a "Company" - both by virtue of operation of Section 80 of the Income Tax Act for the purpose of Income Tax Act and by virtue of the definition of the expression "Company" under the Income Tax Act (which is already examined earlier) - the appellant is required to keep and maintain its accounts in a manner specified by the Central Government, but not in the manner specified in the Companies Act. Therefore, the question is whether the legal fiction contemplated under Section 115JB can be pressed into service ....
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....96 (97) ELT 19 (SC)] excluding the bodies like the appellant from the operation of the said Section. Though under the normal rules of interpretation of statutes the omission of a clause which existed in the statute at some point of time by a subsequent amendment would indicate that the legislature intended not to give the benefit of such clause any more to those who were getting the benefit of such exclusion clause, in our opinion, it is not an absolute rule. The other attendant circumstances, the context, the history and the mischief sought to be remedied by the amendment are all required to be examined before reaching at definite conclusion. 19. The Circular No. 762 not only is binding on the respondents, but also explains the purpose in introducing Section 115JA. The relevant portion reads as follows:- "46.1 In recent times, the number of zero-tax companies and companies paying marginal tax has grown. Studies have shown that in spite of the fact that companies have earned substantial book profits and have paid handsome dividends, no tax has been paid by them to the exchequer. 46.2 The Finance Act has inserted a new section 115JA of the Income-tax Act, ....
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....or the purpose of payment of dividends. Therefore, the amendment was made to plug the loophole in the law. However, the CBDT understood that Companies engaged in the business of generation and distribution of electricity and Enterprises engaged in developing, maintaining and operating infrastructure facilities, as a matter of policy, are not brought within the purview of the amendment (Section 115JA) for the reason that such a policy would promote the infrastructural development of the country. Such an understanding of the CBDT is binding on the department. 20. If that is the background in which Section 115JA is introduced into the Income Tax Act, Section 115JB, which is substantially similar to Section 115JA, in our opinion, cannot have a different purpose and need not be interpreted in a manner different from the understanding of the CBDT of Section 115JA. 21. Another submission made by the learned counsel for the appellant is that in view of the judgment of the Supreme Court in C.I.T. v. B.C. Srinivasa Setty [(1981) 128 ITR 294 (SC)] and CIT v. Eli Lilly and Co. (India) P. Ltd. [(2009) 312 ITR 225 (SC)], where the computation provision could not be applied in a....
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....hat in the case of CIT v. B.C. Srinivasa Setty reported in [1981] 128 ITR 294 this court has held that the charging section and the computation provisions together constitute an integrated code. When there is a case to which the computation provisions cannot apply at all, it is evident that such a case was not intended to fall within the charging section". 22. Another reason is that the appellant or bodies similar to the appellant, which are totally owned by the Government - either State or Central - have no share holders. Profit, if at all, made by the appellant would be for the benefit of entire body politic of the State of Kerala. In the final analysis, all taxation is meant for the welfare of the people in a Constitutional Republic. Therefore the enquiry as to the mischief sought to be remedied by the amendment becomes irrelevant. Therefore, we are of the opinion that the fiction fixed under Section 115JB cannot be pressed into service against the appellant while making the assessment of the tax payable under the Income Tax Act." 15. Learned Senior Standing counsel Mr. Rutvij R. Patel for the appellant Revenue submitted that so far as Assessment Year 2013-2014 is co....