THEIA HEALTHCARE,JUDGE COLONY 1 ST CROSSSTREETTAMBARAM SANATORIUM vs. INCOME TAX OFFICER, CHENNAI

The assessee determined its taxable income at Rs.3.90 Lacs and computed normal tax @30%. The same was arrived at after claiming deduction u/s 80JJAA for Rs.11.40 Lacs. The CPC accepted the returned income but raised a demand of Rs.1.95 Lacs by applying AMT. The AMT was to be applied @18.5% on adjusted book profits which worked out to be Rs.15.31 Lacs after adding back deduction as claimed by the assessee u/s 80JJAA for Rs.11.40 Lacs. The tax on adjusted book profit was worked out by CPC @18.5% which resulted into impugned demand against the assessee. The Ld. CIT(A), finding no error in the computation, dismissed the appeal against which the assessee is in further appeal before us. The Ld. AR has primarily contended that the aforesaid deduction as claimed by the assessee u/s 80JJA should not have been added back and this deduction has wrongly been grouped under the head ‘deduction in respect of certain income’. In other words, the assessee challenges the vires of statutory provisions. The Ld. Sr. DR has opposed any interference in the impugned order and stated that the computations have been made in accordance with law.

We find the provisions of Sec.115JC as contained in Chapter-XIIBA are special provisions applicable to certain persons (including partnership firms) other than a company. These provisions provide that where the regular income-tax payable for a previous year by a person, other than a company, is less than the alternate minimum tax payable for such previous year, the adjusted total income shall be deemed to be the total income of that person for such previous year and he shall be liable to pay income-tax on such total income at the rate of eighteen and one- half per cent. The term ‘Adjusted total income’ referred to in sub-section (1) shall be the total income before giving effect to this Chapter as increased, inter-alia, by deductions claimed, if any, under any section (other than section 80P) included in Chapter VI-A under the heading "C.—Deductions in respect of certain incomes”. This heading indeed include deduction u/s 80JJAA. Quite clearly, the computations as made by CPC is well in line with aforesaid statutory provisions and no fault could be found in the same. The assessee has challenged the vires of the statutory provisions which is beyond the jurisdiction of Tribunal, it being a quasi-judicial authority and a statutory creation. Therefore, the plea of Ld. AR could not be accepted. However, credit of AMT would be available to the assessee in subsequent years in accordance with law as rightly observed by Ld. CIT(A).