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

ORDER \nPER BENCH:-\nThese appeals are filed by the Revenue as against the\nappellate orders arising against rectification and assessment orders\npassed under Section 154 and 143(3) of the Income-tax Act, 1961\n(hereinafter “the Act”) for Assessment Years 2010–11 to 2013–14.\nSince the common issue of applicability of the provisions of Section\nA.Ys.2010-11 and Ors.\nI.T.A Nos.733, 734/Ahd/2023 and Ors.\nACIT Vs. National Dairy Development Baord\nPage No\n3\n115JB (MAT) to the assessee as Statutory Corporation and whether\nrectification order u/s 154 was legally permissible are involved in\nall these appeals. For the sake convenience the same are disposed\nof by this common order.\n2. The assessee, the National Dairy Development Board (hereinafter\nreferred as NDDB), is a statutory body established under the\nNational Dairy Development Board Act, 1987, with the object of\npromoting, financing, supporting dairy and related rural industries.\nFor the Asst. Year 2010-11 assessee e-filed its return of income on\n01.10.2010 declaring loss of Rs.39,92,593/. The AO passed regular\nassessment order u/s.143(3) of the Act on 30.10.2012 determining\ntotal income at Rs.44,29,53,080/-. The assessee filed an appeal\nbefore Ld.CIT(A), Baroda which was partly allowed on 24.03.2014.\nAn order giving effect [herein after referred as OGE] to the appellate\norder was passed by the A.O. on 09.12.2014. Further appeal was\npreferred against the said OGE order, which was decided by Ld.\nCIT(A) on 16.12.2016. Second giving effect order dated 27-03-2017\npassed by the AO and then the A.O. passed the suo-motto\nrectification order u/s.154 of the Act dated 11.08.2017 determining\nthe total income at Rs.4,49,59,741/- with charging MAT liability on\nBook profit at Rs.46,27,94,914/-, on the ground of mistake\napparent from record. [which is the subject matter of appeal in ITA\nNo.733/Ahd/2023 for A.Y. 2010-11].\n2.

1. As against the above appellate order the Revenue is in appeal\nbefore us raising the following Grounds of Appeal in ITA\nNo.733/Ahd/ 2023:\nI.T.A Nos.733, 734/Ahd/2023 and Ors. A.Ys.2010-11 and Ors.\nACIT Vs. National Dairy Development Baord\nPage No\n5\n1.\" On the facts and in the circumstances of the case and in law the learned\nCIT(A) erred by not adjudicating the issue of disallowance made u/s 14A\nof the Income Tax Act, 1961, added to the Book Profit u/s 115JB of the Act,\nby holding that the issue stands deleted by Order of CIT(A) read with\nCIT(A) No. Vadodara- 4/10242/2019-20 without appreciating the fact that\ndisallowance made u/s 14A of the Income Tax Act, 1961 on account of\nadministrative expenses incurred of Rs.2,29,89,221/- in earning exempt\nincome is was required to be added to the book profit as per clause(f) to\nExplanation 1 of Section 115JB of the Income Tax Act, 1961.\n4. As against the second rectification order, Ld CIT[A] allowed the\nassessee appeal by observing as follows:\n

2. GROUND No.2:- The AO erred in increasing the profit by disallowance u/s\n14A of the Act Rs.2,30,15,007/- without appreciating that provisions of section\n14A apply only to the computation of income under chapter IV of the Act and not\nto the computation of book profit under Chapter XII-B since provisions of chapter\nXII-B of the Act are special provisions and complete code in itself. It is submitted\nit be so held now.\nDecision of Ground No.2: This ground is not being decided in view of decision in\nAppeal No 10242 of AY 2010-1 1, as it has become academic.\"\n4.

1. As against the second appellate order the Revenue is in appeal\nbefore us raising the following Grounds of Appeal in ITA No.734/\nAhd/2023:\n1. On the facts and in the circumstances of the case and in law the learned\nCIT(A) erred in holding\n(a) that assessee itself has admitted that it is a company under the Income\ntax Act, 1961 as per the definition of company in Section 2(17) read with\ndefinition of Indian Company in Section 2(26)(ia) of the Income Tax Act\n1961 in the ground raised in respect of applicability of provisions of\nSection 115JB of the Act for A.Y. 2014-15, and that, therein it is held by the\nLd. CIT(A) that provisions of Section 115JB of the Act would apply to the\nassessed.\n(b) that the AO has exercised the provisions of Section 154 of the Act in\ntrue perspective and has correctly computed book profit u/s 115JB of the\nIncome Tax Act, 1961 at Rs.46,27,94,414/-, therefore, erred in holding that\nI.T.A Nos.733, 734/Ahd/2023 and Ors. A.Ys.2010-11 and Ors.\nACIT Vs. National Dairy Development Baord\nPage No\n6\nthe applicability of MAT is a debatable issue and is not amenable to\nrectification u/s 154 of the Income Tax Act, and also ignoring the fact that\nassessee files its Return of Income in the status of Company.\"\n5. Heard rival submissions and perused materials available on\nrecord including the National Dairy Development Board Act, 1987,\nPaper Books and case laws filed by the assessee. It is undisputed\nfact that the assessee NDDB, is a Statutory Body established under\nthe National Dairy Development Board Act, 1987 by the Central\nGovernment with the object of promoting, financing, supporting\ndairy and related rural industries. As per clause [17][i] of section 2\nof the IT Act, a Company is defined as “any body corporate\nincorporated by or under the laws of a country outside India”. As per\nclause 26 of Section 2 of the IT Act, defines an “Indian Company”\nas “a company formed and registered under the Companies Act,\n1956 and as per clause [ia] also includes a Corporation established\nby or under a Central, State or Provincial Act”. Thus NDDB is a Body\nCorporate established under the Central Act is deemed as an\n“Indian Company” for the purpose of the Income Tax Act.\n5.

1. Further NDDB Act, 1987 itself is a self contained code and the\nProvisions of sections 27 and 28 of the NDDB Act which reads as\nfollows:\n“27 (1) The balance sheet and accounts of the National Dairy Development\nBoard shall be prepared in such form and in such manner as may be\nprescribed.\n(2) The Board shall cause the books and accounts of the National Dairy\nDevelopment Board to be closed and balanced as on the 31st day of March\neach year or such other date as the Board may, with the con-currence of\nthe Central Government, decide.\nI.T.A Nos.733, 734/Ahd/2023 and Ors. A.Ys.2010-11 and Ors.\nACIT Vs. National Dairy Development Baord\nPage No\n7\n28. (1) The accounts of the National Dairy Development Board shall be\naudited by auditors duly qualified to act as auditors of companies under\nthe Companies Act, and the appointment of auditors and remuneration\npayable to them shall be subject in the approval of the Central\nGovernment.\n(2) Every auditor in the performance of his duties shall have at all\nreasonable times access to books, accounts and other documents of the\nNational Dairy Development Board.\n(3) The auditors shall submit their report to the Board which shall forward\na copy of their report to the Central Government.\"\n5.

1. On appeal before CIT[A] following Supreme Court judgement in\nthe case of Kerala State Electricity Board Ld. CIT(A) deleted the\naddition made u/s.115JB of the Act. Aggrieved against the\nappellate order, the Revenue is in appeal with the following\nGrounds of Appeal:\n1. On the facts and in the circumstances of the case and in law the learned\nCIT(A) erred in holding:\n(a) that assessee itself has admitted that it is a company under the Income\ntax Act, 1961 as per the definition of company in Section 2(17) read with\ndefinition of Indian Company' in Section 2(26)(ia) of the Income Tax Act\n1961 in the ground raised in respect of applicability of provisions of\nSection 115JB of the Act for A.Y. 2014-15, and that, therein it is held by the\nLd.CIT(A) that provisions of Section 115JB of the Act would apply to the\nassessee.\nI.T.A Nos.733, 734/Ahd/2023 and Ors. A.Ys.2010-11 and Ors.\nACIT Vs. National Dairy Development Baord\nPage No\n13\n(b) that the AO has exercised the provisions of Section 154 of the Act in\ntrue perspective and has correctly computed book profit u/s 115JB of the\nIncome Tax Act, 1961 at Rs.116,01,87,138/-therefore, erred in holding that\nthe applicability of MAT is a debatable issue and is not amenable to\nrectification u/s 154 of the Income Tax Act, and also ignoring the fact that\nassessee files its Return of Income in the status of Company.\n(c) that in view of decision on ground No.3 & 4, the ground regarding not\nreducing reversal of provision of non-performing assets\nRs.1,45,80,10,247/- while computing book profit as per Section 115JB, as\nper clause (i) of Explanation 1, becomes academic, without deciding the\nissue on merit?\n(d) that in view of decision on ground No.3 & 4, the ground regarding\nincreasing the book profit u/s 115JB of the Act by disallowance u/s 14A of\nthe Act Rs.2,39,18,818/- becomes academic without deciding the issue on\nmerit?\n9. The core issue is whether the omission to apply MAT under\nsection 115JB or the alleged errors in computing book profit\nconstitutes a mistake apparent from record, as contemplated under\nsection 154 of the Act. The Ld AO originally accepted the returns\nwithout invoking MAT. Any subsequent action to impose MAT or\nrecalculate it by changing the position amounts to change of\nopinion, which cannot be cloaked as rectification u/s 154 of the\nAct. Further, when CIT(A) did not direct to levy of MAT, the AO had\nno jurisdiction to travel beyond the scope of directions while giving\neffect to the appellate order.\n9.

1. That apart the assessee is a Statutory Board, not a company\nregistered under the Companies Act, and its accounts are not\nprepared in accordance with Schedule VI, which is a pre-condition\nunder section 115JB of the Act. This position has been subject to\njudicial scrutiny in several cases and cannot be said to be free from\nI.T.A Nos.733, 734/Ahd/2023 and Ors. A.Ys.2010-11 and Ors.\nACIT Vs. National Dairy Development Baord\nPage No\n14\ndebate. Therefore, any attempt to apply MAT through a rectification\norder involves a long-drawn reasoning process and not a patent\nmistake and permissible as held by the Apex Court in T.S. Balaram\nv. Volkart Bros. (1971) 82 ITR 50 (SC).\n10. In light of the above, the issue of applicability of Section\n115JB to NDDB is clearly debatable and not a mistake apparent\nfrom record. The rectification order passed is beyond the scope of\nsection 154 of the Act and therefore liable to be quashed as without\njurisdiction. In the result the Revenue's appeal against the\nrectification order passed for the Asst. Year 2011-12 in ITA\nNo.755/Ahd/2023 is liable to be dismissed.\nITA No. 756 & 757/Ahd/2023 for A.Y. 2012-13\n11. The assessee e-filed its return of income for AY 2012-13 on\n27.09.2012 declaring total loss of Rs.(84,09,26,490/-). The AO\npassed order u/s.143(3) of the Act on 30.03.2015 reducing the\ntotal loss to Rs.(36,11,90,670/-) without calculating MAT liability\non Book profit. That mistake was apparent from record, therefore\nthe AO passed the rectification order u/s 154 of the Act on\n03.11.2017, raising tax demand of Rs.10,10,34,710/-.\nSubsequently, the assessee submitted application for rectification\non 01.12.2017. The AO was passed rectification order u/s 154 of\nthe Act on 31.01.2018.\n12. On appeal before CIT[A] following Supreme Court judgement in\nthe case of Kerala State Electricity Board Ld. CIT(A) deleted the\naddition made u/s.115JB of the Act and the other additions made\nwere consequently academic in nature not adjudicated upon.\nI.T.A Nos.733, 734/Ahd/2023 and Ors. A.Ys.2010-11 and Ors.\nACIT Vs. National Dairy Development Baord\nPage No\n15\n13. Aggrieved against the appellate order, the Ground of Appeal\nraised by the Revenue in are as follows:\n1. On the facts and in the circumstances of the case and in law the learned\nCIT(A) erred in holding that in view of decision in Appeal No.10319 filed\non 30-11-2017, the ground regarding not reducing reversal of provision of\nnon-performing assets and Inventory of Rs.89,56,26,283/-while computing\nbook profit as per Section 115JB, as per clause (i) of Explanation 1,\nbecomes academic, without deciding the issue on merit ?\n13.

1. Aggrieved against the appellate order, The Ground of Appeal\nraised by the Revenue in are as follows:\n1. On the facts and in the circumstances of the case and in law the learned\nCIT(A) erred in holding\n(a) that assessee itself has admitted that it is a company under the Income\ntax Act, 1961 as per the definition of company in Section 2(17) read with\ndefinition of Indian Company' in Section 2(26)(ia) of the Income Tax Act\n1961 in the ground raised in respect of applicability of provisions of\nSection 115JB of the Act for A.Y. 2014-15, and that, therein it is held by the\nLd. CIT(A) that provisions of Section 115JB of the Act would apply to the\nassessee.\n(b) that the AO has exercised the provisions of Section 154 of the Act in\ntrue perspective and has correctly computed book profit u/s 115JB of the\nIncome Tax Act, 1961 at Rs.34,98,90,865/-therefore, erred in holding that\nthe applicability of MAT is a debatable issue and is not amenable to\nrectification u/s 154 of the Income Tax Act, and also ignoring the fact that\nassessee files its Return of Income in the status of Company.\n(c) that in view of decision on ground No.3 & 4, the ground regarding not\nreducing reversal of provision of non-performing assets and inventory of\nRs.89,56,26,283/- & reversal of excess provision of inventory of Rs.316/-\nwhile computing book profit as per Section 115JB, as per clause (i) of\nExplanation 1, becomes academic, without deciding the issue on merit?\n(d) that in view of decision on ground No.3 & 4, the ground regarding\nincreasing the book profit u/s 115JB of the Act by disallowance u/s 14A of\nI.T.A Nos.733, 734/Ahd/2023 and Ors. A.Ys.2010-11 and Ors.\nACIT Vs. National Dairy Development Baord\nPage No\n16\nthe Act Rs.2,97,33,479/- becomes academic without deciding the issue on\nmerit?\n13.

2. The Ground of Appeal raised by Assessee in C.O.\nNo.2/Ahd/2024 are as follows:\nThe Ld. Assessing Officer ('Appellant') being aggrieved by the order dated\n4 August 2023 passed by the National Faceless Appeal Centre ('NFAC')\npreferred an appeal before Ahmedabad Bench of Hon'ble ITAT vide ITA\nNo. 756 of 2023. Against the same, respondent wishes to cross object on\nthe following ground:\n1. The NFAC has erred on facts and in law in upholding the calculation of\ninterest u/s 2348 of the Act amounting to Rs.1,07,29,545 till the date of\nrectification order under consideration instead of the date of regular\nassessment.\n2. The NFAC has erred on facts and in law in upholding the calculation of\ninterest u/s 234D of the Act amounting to Rs 32,24,401/-without\nappreciating the fact that respondent is not liable to pay interest as per\nprovisions of the said section.\nThe Cross objector prays for leave to add, alter and/or amend all or any of\nthe grounds before final hearing of the Cross objection.\n13.

3. The Ground of Appeal raised by Assessee in C.O.\nNo.3/Ahd/2024 are as follows:\nThe Ld. Assessing Officer ('Appellant') being aggrieved by the order dated\n4 August 2023 passed by the National Faceless Appeal Centre ('NFAC')\npreferred an appeal before Ahmedabad Bench of Hon'ble ITAT vide ITA\nNo. 757 of 2023. Against the same, respondent wishes to cross object on\nthe following ground:\n1. The NFAC has erred on facts and in law in upholding the calculation of\ninterest u/s.234B of the Act amounting to Rs.1,07,29,545/- till the date of\nrectification order under consideration instead of the date of regular\nassessment.\n2. The NFAC has erred on facts and in law in upholding the calculation of\ninterest u/s.234D of the Act amounting to Rs 32,24,401/-without\nI.T.A Nos.733, 734/Ahd/2023 and Ors. A.Ys.2010-11 and Ors.\nACIT Vs. National Dairy Development Baord\nPage No\n17\nappreciating the fact that respondent is not liable to pay interest as per\nprovisions of the said section.\nThe Cross objector prays for leave to add, alter and/or amend all or any of\nthe grounds before final hearing of the Cross objection.\n14. The Ld CIT[A] considered his earlier order and dismissed the\nappeal without deciding the issue on merit since the issue becomes\nacademic. Therefore for the detailed reasons recorded by this\nTribunal in Paragraphs 5, 6, 9 & 10 above, the present rectification\norders dated 03-11-2017 and 31-01-2018 has no jurisdiction in the\neye of law and are hereby quashed. Consequently, both the\nRevenue appeals for the Asst. Year 2012-13 in &\n756/Ahd/2023 are liable to be dismissed. Since the\nRectification orders are itself quashed consequently C.O.No. 2\n& 3/Ahd/2024 are also dismissed.\n A.Y. 2013-14 [Assessee Appeal]\n15. The assessee e-filed its return of income for AY 2013-14 on\n26.11.2013 declaring total loss of Rs.(28,90,24,794/-). The AO\npassed order u/s.143(3) of the Act on 19.01.2016 reducing the\ntotal loss to Rs.(14,24,39,000/-) without calculating MAT liability\non Book Profit. That mistake was apparent from record, therefore\nthe AO passed the rectification order u/s 154 of the Act on\n03.11.2017 determining the total Book profit for the purpose of\nMAT at Rs.27,10,93,612/-\n16. On appeal, Ld CIT[A] held that the amendment made in Sec\n115JB by Finance Act 2012 effective from 01.04.2013 which is\nI.T.A Nos.733, 734/Ahd/2023 and Ors. A.Ys.2010-11 and Ors.\nACIT Vs. National Dairy Development Baord\nPage No\n18\napplicable to the assessee company for the Asst. year 2013-14 by\nobserving as follows:\n'... The question to be decided is whether section 115JB is applicable to\nstatutory corporations enacted by an act of the legislature or 115JB applies\nexclusively to those incorporated under the Companies Act. The matter\nwas discussed in great detail by the Kerala High Court vide judgment\ndated 12.11.2010 in I TA No. 1710 of 2009 in the case of Kerala State\nElectricity Board. Hon'ble Supreme court has confirmed the view taken by\nHon'ble Kerala High Court and the case was dismissed vide judgment\ndated 16/08/20222. The appellant in its submission dated 25.04.2023 has\nrelied heavily on the above mentioned decision of Hon'ble Kerala High\nCourt. The matter pertained to AY 2002-03 to 2009-10. However the\njudgment of Kerala High Court in the case of 'Deputy Commissioner of\nIncome Tax Vs. Kerala State Electricity Board' and confirmed by the\nHon'ble Supreme court is no longer applicable in view of amendment\nmade in Sec 115JB by Finance Act 2012 effective from 01/04/2013.\nIn view of the fact that appellant's reliance on Judgment of Kerala High\nCourt in the case of DCIT v Kerala State Electricity Board confirmed by\nthe Hon'ble apex court is no longer teneable, a letter was issued on\n28/06/2023 asking NDDB to explain its position . The appellant vide letter\ndated 05/07/2023 submitted that Hon'ble Jaipur Bench of ITAT in the\ncase of DCIT v Rajasthan Financial Corporation for AY 2019-20, which is\npost amendment in section 115JB by Finance Act 2012, has categorically\ndealt with the amendment and clearly held that even after the amendment\nto apply the provision of section 115JB the assessee is required to be a\ncompany under the Companies Act.\nThe question before Hon'ble ITAT Jaipur was “Whether on the facts and\ncircumstances of the case and in law, the CIT(A) was justified in holding\nthat the assessee is not liable to MAT even after amendment in the Act\nand section 115JB(2) has been amended by Finance Act, 2012 w.e.f 1-4-\n2013 though, after amendment of section 115JB(2), by Finance Act, 2012\nw.e.f. 1-4-2013, not only the companies registered under the Companies\nAct are subject to the MAT provisions, but companies in whose case\nsecond proviso to section 129(1) of the Companies Act, 2013 are applicable\n(if such companies prepare profit and loss account as per the provisions of\nthe Act governing such companies) are also subject to the provisions of\nMAT.\"\nI.T.A Nos.733, 734/Ahd/2023 and Ors. A.Ys.2010-11 and Ors.\nACIT Vs. National Dairy Development Baord\nPage No\n19\nITAT Jaipur relies heavily on a decision of jurisdictional High Court in the\ncase of the appellant i.e. Rajasthan Financial corporation, where the High\nCourt had not considered the provision of Section 2(17), 2(18) or 2(26) (ia)\nof the IT Act and decided against application of 115JB. The AR of the\nappellant had argued before the Hon'ble ITAT Jaipur that 2nd proviso to\nsection 129(1) of the Companies Act, 2013 applies to Companies such as\nElectricity Companies, Banking Companies and Insurance Companies\nwhich are registered under the Companies Act but prepare their statement\nof Profit & Loss as per provision of the governing Act.\nIt is pertinent to mention that Electricity, Banking and Insurance are\nspecifically mentioned in 2nd proviso to Section 129(1) of the Companies\nAct and it also includes “any other class of Company". Use of the\nexpression \"any other class of company\" frees it from the purview of\nCompanies Act 2013. National Dairy Development Board admittedly is a\ncompany under the IT Act 1961 and falls squarely within \"any other class\nof company\" as mentioned in second proviso of Sec 129 (1) of Companies\nAct, 2013. “Any other class of Company" is not discussed in the ITAT\norder and how it precludes Companies identified under the Income- Tax\nAct. Reducing it to just Banking, Electricity and Insurance as argued by\nAR of Rajasthan Finance Corporation is against the letter of 2 nd proviso\nto Section 129(1) of the Companies Act. Grounds of appeal did not include\nwhat constitutes “any other class of Company". Use of expression \"any\nother class of Company” was not the subject matter before Hon'ble ITAT\nJaipur. One class of Company are the ones incorporated under Companies\nAct. The expression “any other class of Company" includes the word\n'other'. What Constitutes this 'other' has not been discussed as it was not\nthe ground before ITAT. Therefore, this judgement of ITAT Jaipur is\napplicable to the facts of Rajasthan Financial Corporation. Therefore the\nprovisions of section 115JB will apply to the appellant. These grounds are\ndecided against the appellant.\"\n17. Aggrieved against the appellate order, the Grounds of Appeal\nraised by the Assessee in ITA No.1052/Ahd/2023 are as follows:\nThe appellant being dissatisfied with the order passed by the National\nFaceless Appeal Centre ('NFAC) Income Tax Department, prefers an\nappeal against the same on the following amongst other grounds, which\nare without prejudice to each other.\nI.T.A Nos.733, 734/Ahd/2023 and Ors. A.Ys.2010-11 and Ors.\nACIT Vs. National Dairy Development Baord\nPage No\n20\n1. The order passed by the NFAC is erroneous and contrary to the\nprovisions of law and facts and therefore requires to be suitably modified.\nIt is submitted that it be so done now.\n2 The NFAC has erred on facts and in law by upholding the order passed\nu/s 154 of the Act applying provisions of Section 115JB of the Income Tax\nAct, 1961 (the Act') to the appellant considering the applicability of section\n115JB of the Act as mistake apparent on records. It is submitted it be so\nheld now.\n3. The NFAC has erred on facts and in law in holding that the provisions\nof Section 115JB of the Act are applicable to the appellant on the ground\nthat appellant is \"other Company as per Section 129 of the Companies Act\nsince it is Company under Income tax. It is submitted it be so held now.\n3.

1. The NFAC erred in not following the decision of the Jaipur Tribunal in\ncase of Rajasthan Financial Corporation which held even after amendment\nto Section 115JB of the Act, it is not applicable to entities like the appellant\nwhich are not incorporated under the Companies Act and are deemed as\nCompany under provisions of Section 2(17) or 2(26) of the Income Tax\nAct. It is submitted it be so held now.\n4 The NFAC has erred on fact and in law in directing the AO to verify if\nreserve or provision from which withdrawal has been made was added\nback to book profit or not without appreciating the fact that proviso to\nclause (1) of Explanation 1 to Section 115JB of the Act is not applicable to\nits case as the section was not applicable to it in the earlier years. It is\nsubmitted it be so held now.\n5. The NFAC has erred in holding that interest u/s 234B is chargeable on\nassessed tax as increased in order u/s 154 while adjudicating appellant's\nground that the interest u/s 234B needs to be computed upto the date of\norder u/s 143(3) and not upto the order u/s 154 as done by AO. It is\nsubmitted it be so held now.\nThe question of applicability section 115JB to Statutory\nCorporations pursuant to the amendment made in Sec 115JB by\nFinance Act 2012 effective from 01.04.2013 is no more res-integra\nas the same considered by the Special Bench of Mumbai Tribunal\nin the case of Union Bank of India -Vs- DCIT reported in [2024] 166\nI.T.A Nos.733, 734/Ahd/2023 and Ors. A.Ys.2010-11 and Ors.\nACIT Vs. National Dairy Development Baord\nPage No\n21\ntaxmann.com 207 vide recent decision dated 06-09-2024 held as\nfollows:\n“Section 115JB, read with section 2(26), of the Income-tax Act, 1961-\nMinimum alternate tax. Payment of Tax (Banks) Assessment years\n2013-14 to 2015-16 Assessee-bank claimed that section 115JB would\nnot be applicable in its case Assessing Officer denied said claim on\nground that amended provision of section 115JB brought by Finance\nAct, 2012 with effect from 1-4-2013 by insertion of clause (b) to\nsection 115JB(2) had brought within its ambit companies governed\nby Companies Act and also governed by other regulating act\nincluding Banking Regulation Act, 1949 It was noted that assessee\ncame into existence as 'corresponding new bank as per section 3(1)\nof Banking Companies (Acquisition and Transfer of Undertakings)\nAct, 1970 Also new acquiring banks like assessee-bank was neither\nregistered under Companies Act, 2013 nor under any other previous\ncompany law Whether expression 'company' used in section\n115JB(2)(b) was to be inferred to be company under Companies\nAct Held, yes - Whether thus, deeming fiction by way of section 11\nof Acquisition Act had to be read purely in context for purpose of\nIncome Tax Act where corresponding new bank had been deemed to\nbe an Indian Company and a company in which public were\nsubstantially interested and this deeming section could not be\nextended to a company registered under Companies Act to which\nalone section 115JB is applicable -Held, yes Whether thus, clause\n(b) to sub section (2) of section 115JB inserted by Finance Act, 2012\nwith effect from 1-4-2013, i.e, from assessment year 2013-14\nonwards, would not be applicable to banks constituted as\n'corresponding new bank' in terms of Banking Companies\n(Acquisition and Transfer of Undertakings) Act, 1970 and not\nregistered under Companies Act, 2013 or any other previous\ncompany law Held, yes Whether thus assessee-bank would not fall\nunder provisions of section 115JB and tax on book profits (MAT)\nwould not be applicable - Held, yes [Paras 55, 56 and 60] [In favour\nof assessee]\"\nI.T.A Nos.733, 734/Ahd/2023 and Ors. A.Ys.2010-11 and Ors.\nACIT Vs. National Dairy Development Baord\nPage No\n22\n60. Accordingly, the question referred to Special Bench is decided in\nfavour of the assessee banks that clause (b) to sub section (2) of\nsection 115JB of the Income-tax Act inserted by Finance Act, 2012\nw.e.f. 1-4-2013, that is, from assessment year 2013-14 onwards, are\nnot applicable to the banks constituted as \"corresponding new bank\nin terms of the Banking Companies (Acquisition and Transfer of\nUndertakings) Act, 1970 and therefore, the provision of Section\n115JB cannot be applied and consequently, the tax on book profits\n(MAT) are not applicable to such banks.\n18.

2. Similarly Delhi High Court in the case of Oriental Insurance\nCo. Ltd -Vs- ACIT reported in [2017] 84 taxmann.com 312 held that\nfrom the reading of section 44 read with the First Schedule of the\nAct, that insurance companies are required to prepare accounts as\nper the IA and the regulations of the IRDA and not as Parts II and\nIII of Schedule VI of the Companies Act. Insurance companies\nprepares its accounts as per the IRDA Regulations which governs\nthe preparation of the auditor's report, therefore the provisions of\nSection 115JB of the Act does not apply to insurance companies.\n19. Thus we hold that MAT is not leviable even under the post\namendment by Finance Act 2012 effective from 01.04.2013 by\ninsertion of clause (b) to section 115JB(2) of the Act to a Statutory\nCorporation created under the Central Act. Therefore, the additions\nI.T.A Nos.733, 734/Ahd/2023 and Ors. A.Ys.2010-11 and Ors.\nACIT Vs. National Dairy Development Baord\nPage No\n24\nmade thereunder by way of passing rectification order is hereby\nquashed. In the result the appeal filed assessee for the Asst. Year\n2013-14 in is allowed.\nITA No.1059/Ahd/2023 for A.Y. 2013-14 [Revenue Appeal]\n20. The Ground of Appeal raised by the Revenue are as follows:\nWhether on the facts and in the circumstances of the case, the learned\nCITIA) has erred in late and on facts in holding that disallowance made\nu/s.14A is not to be added to computation made u/s.115JB of the Income\nTax A 1961 despite the fact that said amount was disallowed us of and\nwas required to be added to the book profit as per clause (f) to\nExplanation 1 of section 115.JB (2) of the Income Tax Act, 1961?\n21. For the detailed reasons recorded by this Tribunal in\nParagraphs 18 & 19 hereinabove, the impugned rectification order\nis quashed, consequently, the Revenue appeal for the Asst. Year\n2013-14 in is hereby dismissed.\n22. In the combined result, the appeals filed by the Revenue in\nITA No.733, 734, 755 to 757 and 1059/Ahd/2023\nDismissed.\nare\n23. Appeal filed by the assessee in ITA No.1052/Ahd/2023 is\nAllowed and C.O. Nos.2 & 3/Ahd/2024 are dismissed.\nOrder pronounced in the open court on 02-05-2025\nSd/-\n(DR. BRR KUMAR)\nVICE PRESIDENT\nAhmedabad :\nDATED 02/05/2025\nSd/-\n(T.R. SENTHIL KUMAR)\nJUDICIAL MEMBER\nI.T.A Nos.733, 734/Ahd/2023 and Ors. A.Ys.2010-11 and Ors.\nACIT Vs. National Dairy Development Baord\nPage No\n25\nआदेश की प्रतिलिपि अग्रेषित /