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2025 (2) TMI 769 - HC - Income TaxMAT applicability to a company engaged in the business of providing electricity and governed by the Electricity Supply Act - HELD THAT - The issue raised in various appeals insofar as applicability of Section 115JB is covered by the decision of Ajmer Vidyut Vitran Nigam Ltd. 2021 (11) TMI 1103 - RAJASTHAN HIGH COURT and Tata Power Delhi Distribution Ltd. 2025 (1) TMI 879 - DELHI HIGH COURT We may further observe that both the parties have agreed that the ratio laid down in the case of Union Bank of India 2019 (5) TMI 355 - BOMBAY HIGH COURT M/s. Dresdner Bank AG 2025 (2) TMI 707 - BOMBAY HIGH COURT and Dena Bank 2019 (8) TMI 1924 - BOMBAY HIGH COURT squarely applies to the facts of the present case since even the banking companies are not required to make their financials according to the Companies Act but since they are required to make their financials as per the Banking Regulation Act the provision of Section 115JB would not be applicable. Decided in favour of the Assessee. Addition of interest charged u/s. 234D - The issue is covered against the Assessee and in favour of the Revenue by the decision of this Court in the case of Indian Oil Corporation Ltd. 2012 (9) TMI 517 - BOMBAY HIGH COURT . Therefore following the decision of the Coordinate Bench Question (ii) is answered in favour of the Revenue against the Assessee.
The High Court of Bombay heard a group of six appeals filed by the Appellant-Revenue concerning the applicability of Section 115JB of the Income Tax Act 1961 to companies engaged in the business of providing electricity and governed by the Electricity Supply Act. The core legal question in all appeals was whether the provisions of Section 115JB applied to such companies. The Respondent-Appellee argued that since financials of electricity companies are not required to be prepared as per Schedule VI of the Companies Act, Section 115JB should not be applicable to them.The Court noted that the issue of applicability of Section 115JB to electricity companies had been addressed in previous decisions of the Court related to banking companies. The Court referred to the decision of the Rajasthan High Court in the case of Principal Commissioner of Income-tax vs. Ajmer Vidyut Vitran Nigam Ltd., which ruled in favor of the Assessee. The Supreme Court had also dismissed the Special Leave Petition filed by the Revenue challenging the Rajasthan High Court decision.Both the Appellant-Revenue and the Respondent-Assessee agreed that the issue raised in the appeals was covered by the decisions of the Rajasthan High Court and the Delhi High Court in similar cases. The parties also acknowledged that the decisions of the Coordinate Benches of the Court in cases involving banking companies were relevant to the present case. These decisions established that companies not required to prepare financials according to the Companies Act, but as per other specific regulations, were not subject to Section 115JB.The Court concluded that the issue of the applicability of Section 115JB to electricity companies was answered against the Revenue and in favor of the Assessee based on the precedent set by previous decisions. For the assessment year 2002-2003, the Court ruled in favor of the Revenue and against the Assessee based on the decision in the case of Commissioner of Income-tax 10 vs. Indian Oil Corporation Ltd.In summary, the Court held that Section 115JB did not apply to electricity companies preparing financials in accordance with specific regulations other than the Companies Act. The appeals were disposed of accordingly, with no costs awarded.
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