NATIONAL DAIRY DEVELOPMENT BOARD,ANAND vs. THE DY.CIT., ANAND CIRCLE, , ANAND

ITA 1052/AHD/2023Status: DisposedITAT Ahmedabad02 May 2025AY 2013-1425 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that Section 115JB of the Income Tax Act, 1961, applies only to companies registered under the Companies Act. Statutory corporations, established under their own Acts and not incorporated under the Companies Act, are not covered by Section 115JB. The Tribunal relied on Special Bench decisions concerning banks and the Delhi High Court decision in Oriental Insurance Co. Ltd. v. ACIT, which held that insurance companies preparing accounts as per IRDA Regulations are not subject to Section 115JB. Therefore, the Tribunal concluded that MAT is not leviable on a statutory corporation like NDDB, even after the amendment by the Finance Act, 2012. Consequently, the additions made under Section 115JB through rectification orders were quashed. The issue of Section 14A disallowance in the context of book profit computation under Section 115JB was rendered academic by the non-applicability of Section 115JB itself. The appeals filed by the Revenue were dismissed, and the appeal filed by the assessee for AY 2013-14 was allowed.

What were the facts?

The appeals by the Revenue challenge orders concerning rectification and assessment for Assessment Years 2010-11 to 2013-14. The assessee, National Dairy Development Board (NDDB), is a statutory body. For AY 2010-11, the Assessing Officer (AO) passed a regular assessment order, followed by orders giving effect to appellate decisions. Subsequently, the AO passed a suo-motto rectification order under Section 154, determining total income and charging Minimum Alternate Tax (MAT) liability on book profit. The assessee also filed a rectification petition regarding exempt income and disallowance under Section 14A, which the AO addressed in another rectification order, adding disallowance to book profit. The CIT(A) allowed the assessee's appeals against these rectification orders, holding that the applicability of MAT was a debatable issue not amenable to rectification under Section 154 and that Section 14A disallowance was not applicable to book profit computation under Section 115JB.

What were the issues?

1. Whether the applicability of Section 115JB (MAT) provisions to the assessee, a Statutory Corporation, is a debatable issue not amenable to rectification under Section 154 of the Income Tax Act, 1961. The Assessee argued that the applicability of MAT is a debatable issue and not amenable to rectification under Section 154, as held by the CIT(A). The Revenue contended that the CIT(A) erred by not adjudicating the issue of disallowance under Section 14A added to book profit under Section 115JB, arguing it was required to be added as per clause (f) of Explanation 1 to Section 115JB. The Revenue also argued that the AO exercised provisions of Section 154 correctly and computed book profit under Section 115JB, and that the assessee files its return in the status of a company. 2. Whether disallowance made under Section 14A of the Act is to be added to the computation made under Section 115JB of the Act. The Assessee argued that Section 14A applies only to the computation of income under Chapter IV, not to the computation of book profit under Chapter XII-B, as Chapter XII-B is a special code. The Revenue contended that the disallowance under Section 14A was required to be added to the book profit as per clause (f) to Explanation 1 of Section 115JB.

Which sections of the Income-tax Act were involved?

Section 154,Section 143(3),Section 115JB,Section 14A,Section 2(17),Section 2(26)(ia),Section 11,Section 129(1),Section 44

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IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH Before: DR. BRR Kumar, Vice President And Shri T. R. Senthil Kumar, Judicial Member ITA Nos: 733, 734 & 755/Ahd/2023 Asst Years: 2010-11 & 2011-12 PAN: AABCN2029C ITA Nos: 756 & 757/Ahd/2023 & C.O. Nos: 2 & 3/Ahd/2024

Assessment Year: 2012-13 PAN: AABCN2029C PAN: AABCN2029C I.T.A Nos.733, 734/Ahd/2023 and Ors. A.Ys.2010-11 and Ors. ITA Nos: 1052 & 1059/Ahd/2023

Assessment Year: 2013-14 PAN: AABCN2029C Post Box No. 40

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