July 2019

Section 115JB of ITA, 1961 MAT (Banking Companies Provisions of section 115JB as it stood prior to its amendment by virtue of Finance Act, 2012 would not be applicable to a banking company governed by provisions of Banking Regulation Act, 1949

K.B.Bhujle
Advocate

28  CIT vs. Union Bank of India; [2019] 105 taxmann.com 253 (Bom) Date of order: 16th April, 2019 A.Y.: 2005-06

 

Section 115JB of ITA, 1961 MAT (Banking Companies Provisions of section 115JB as it stood prior to its amendment by virtue of Finance Act, 2012 would not be applicable to a banking company governed by provisions of Banking Regulation Act, 1949

 

The assessee bank filed its return for the A.Y. 2005-06 declaring certain taxable income. The AO completed assessment u/s. 143(3) of the Income-tax Act, 1961. He also computed the book profits u/s. 115JB for determining the assessee's tax liability.

 

The Tribunal held that the provisions of section 115JB were not applicable to the assessee bank.

 

On appeal by the Revenue, the Bombay High Court upheld the decision of the Tribunal and held as under:

 

i)   The question that calls for consideration is whether the machinery provision provided under sub-section (2) of section 115JB is workable when it comes to the banking companies and such other special companies governed by the respective Acts. In this context, the question would also be of the legislative intent to cover such companies within the sweep of section 115JB of the Act. These questions arise bec

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