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TMI Blog2023 (1) TMI 623X X X X Extracts X X X X X X X X Extracts X X X X ..... n (2) very well defines it coverage. Thus, we consider the arguments of the ld. DR but considering the provision of section 11JB(2) and the decision of the jurisdictional high court in the case of the assessee we do not find any force whether the Honourable Jurisdictional High Court has considered the provision of section 2(17), 2(18) or 2(26) dealt with or not Here the charging section deals and considered only those companies which are registered under the Companies Act and not deemed company as per provision of section 2(17) or 2 (26). Therefore, we are of the considered view that even though revenue has revised its ground to substantiate its case in accordance with the definition of the company we do not agree with the contention of the ld. DR that the since that definition includes the corporation but provision of section 115JB deals only charge of tax of a company and it refers the section 129 of the Companies Act only. The charge of tax being a separate code and the section clearly cover the type of company under the tax net the same cannot be widened based on the definition given in the Act for the other purposes. To substantiate this view, we have also gone through t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 129(1) of the Companies Act, 2013 are applicable (if such companies prepare profit and loss account as per the provisions of the Act governing such companies) are also subject to the provisions of MAT. 3. The appellate craves, its right to add, amend or alter any of the grounds on or before the hearing. 3. For this additional ground the ld. DR submitted that even though there is a judgement in favour of the assessee by the jurisdictional high court but before the Hon ble High Court, the applicable provision of the act was not placed before the high court. Therefore, to bring the correct fact on record this additional ground is required to be placed for service in this appeal and considering the issue being technical and legal and it does not require any finding on facts from the lower authority the additional ground raised by the revenue be admitted for deciding it on its merits. Considering this aspect being technical grounds the same are admitted to be decided on merits. 4. The brief fact related to this case is that the assessee is a State Financial Corporation incorporated under the State Financial Corporation Act, 1951 and is engaged in financing of indust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue in 2.3 to 2.3.2 of her order and the same is reproduced below: 2.3 I have perused the facts of the case, the asso assessment order and the submissions of the appellant. In this case, it is seen that assesee's own case for A.Y. 2006-07, 2010-11, 2011- 12 and 2012-13 in which similar issues were decided by Hon'ble ITAT, Jaipur. The same issues are also pertaining to this year i.e. 2016-17 wherein Assessing Officer made disallowance under section 36(1)(vii)(a)(c) of Rs. 34,62,000/- on account of bad debts written off and applied provision of section 115JB of the Act. 2.3.1 In appellate proceedings, the Authorized Representative relied various decisions which support to assessee's own case. It is found that appellant did not appeal against disallowance made by the Assessing Officer on account of bad debts but appellant challenged the action of Assessing Officer for application of provision of section 115JB in appeal. In appeal no. 610/14-15 dated 30.09.2016, CIT(A) has decided this issue in favour of assessee. Against this, department prefer appeal before Hon'ble ITAT, Jaipur. The Hon'ble ITAT in ITA No. 1063/JP/2016 for A. Y. 2012-13, has decided t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the provisions of section 115JB of the Act. With this, the Ground No. 1 raised by the appellant is allowed. The Ground No. 2 being vague and general in nature, requires no separate adjudication. 4.6 In the result, the appeal of the appellant is allowed. 6. Revenue not satisfied with the findings of the ld. CIT(A) has marched this appeal on the grounds as raised which was subsequently during the pendency of this appeal revenue raised additional grounds also. Revenue filed a paper book containing following documents to support contentions: S. No. Description of the case Page No. 1 Judgment of Hon ble Rajasthan High Court CIT, Jaipur-II, Jaipur vs. Rajasthan Financial Corporation, Jaipur 1-14 2 Definition of Company 15-16 3 Company Law 129 17-19 4 The State Financial Corporations Act, 1951 20-24 5 The Rajasthan Financial Corporation General Regulations, 2002 25-53 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;ble High Court that the High Court held that section 2(18)(a) of the IT Act is not applicable in the case of the assessee and consequently section 115JA will also not be applicable, as the assessee is not a company and provisions of section 1153A will only be applicable in the case of the company. So, the moot point is whether the assessee is a company or not and whether section 2(18)(a) is relevant or not for deciding this issue. Before proceeding further, it is important to bring into the notice of the Hon'ble Bench that the Deaprtment has filed an SLP on 25.04.2018 in case no. SLP(C) No. 013776/2018. The same has been admitted and pending for adjudication. 6. A perusal of section 2(18) reveals that it deals with the definition of 'company in which the public are substantially interested. Clause (a) specifies that, inter-alia, such companies will be the companies which are owned by the Government or whose 40% shareholding is with the Government. Section 115JA as well as 115JB talk about taxes to be paid by a company in certain specific cases. These are deeming provisions beginning with the non-obstinate phrases. Hence, if the total income of a company as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or such assessment year or assessment years (whether commencing before the 1st day of April, 1971 or on or after that date) as may be specified in the declaration: Further, section 2(26) defines Indian company' as under- Indian company means a company formed and registered under the Companies Act, 1956 (1 of 1956), and includes- (i) a company formed and registered under any law relating to companies formerly in force in any part of India (other than the State of Jammu and Kashmir and the Union territories specified in sub-clause fill of this clause]); (ia) a corporation established by or under a Central, State or Provincial Act: (ib) any institution, association or body which is declared by the Board to be a company under clause (17):] (ii) in the case of the State of Jammu and Kashmir, a company formed and registered under any law for the time being in force in that State: (iii) in the case of any of the Union territories of Dadra and Nagar Haveli, Goa Daman and Diu and Pondicherry a company formed and registered under any law for the time being in force in that Union territory:] Provided that the fregistered or, as the case may be, pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Dubey, [1962] 2 SCR 558 this Court while pointing out the procedure to be followed when conflicting decisions are placed before a Bench extracted a passage from Halsbury Laws of England incorporating one of the exceptions when the decision of an Appellate Court is not binding Does this principle extend and apply to a conclusion of law, which was neither raised nor preceded by any consideration. In other words can such conclusions be considered as declaration of low? Here again the English Courts and jurists have carved out an exception to the rule of precedents. It has been explained as rule of sub-silentio. A decision passed sub-silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the Court or present to its mind' (Salmond 12th Edition). In Lancaster Motor Company (London) Ltd. v. Bremith Ltd., [1941] IKB 675 the Court did not feel bound by earlier decision as it was rendered without any argument, without reference to the crucial words of the rule and without any citation of the authority'. It was approved by this Court in Municipal Corporation of Delhi v. Gumam Ka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule III: Provided that the items contained in such financial statements shall be in accordance with the accounting standards: Provided further that nothing contained in this sub-section shall apply to any insurance or banking company or any company engaged in the generation or supply of electricity, or to any other class of company for which a form of financial statement has been specified in or under the Act governing such class of company: Provided also that the financial statements shall not be treated as not disclosing a true and fair view of the state of affairs of the company, merely by reason of the fact that they do not disclose- (a) in the case of an insurance company, any matters which are not required to be disclosed by the Insurance Act, 1938 (4 of 1938), or the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999). (b) in the case of a banking company, any matters which are not required to be disclosed by the Banking Regulation Act, 1949 (10 of 1949): (c) in the case of a company engaged in the generation or supply of electricity, any matters which are not required to be disclosed by the Electricity Act, 2003 (36 of 2003): ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment made in the law and definition of company the assessee is liable to MAT provisions. The ld. DR argued that there are two types of company one is registered under the companies and another not registered under the company act and the assessee is falling in another category even though not registered under the companies Act assessee is liable to MAT provisions. 9. To drive home the various contentions so raised the ld. DR has also relied upon the following judgements; Submission dated 19/10/2022 S. No. Description of the case Page No. 1 Kunhayammed Ors Vs State of Kerala Anr. On 19 July, 2000 (Supreme Court of India) 1-17 Submission dated 12/10/2022 S. No. Description of the case Page No. 1 M/s A-One Granites vs. State of U.P. Ors on 16 February, 2001 (Supreme Court of India) 1-9 2 State Bank of U. P. and Anr. Vs. M/s Synthetics and Chemicals Ltd. and Anr. 18.07.1991 (SC) 10-32 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny in which the public are substantially interested- (a) if it is a company owned by the Government or the Reserve Bank of India or in which not less than forty per cent of the shares are held (whether singly or taken together) by the Government or the Reserve Bank of India or a corporation owned by that bank ; or (aa) if it is a company which is registered under section 25 of the Companies Act, 1956 (1 of 1956)9 ; or (ab) if it is a company having no share capital and if, having regard to its objects, the nature and composition of its membership and other relevant considerations, it is declared by order of the Board to be a company in which the public are substantially interested : Provided that such company shall be deemed to be a company in which the public are substantially interested only for such assessment year or assessment years (whether commencing before the 1st day of April, 1971, or on or after that date) as may be specified in the declaration ; or (ac) if it is a mutual benefit finance company, that is to say, a company which carries on, as its principal business, the business of acceptance of deposits from its members and which is declared by the Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmerly in force in any part of India (other than the State of Jammu and Kashmir and the Union territories specified in sub-clause (iii) of this clause) ; (ia) a corporation established by or under a Central, State or Provincial Act ; (ib) any institution, association or body which is declared by the Board to be a company under clause (17) ; (ii) in the case of the State of Jammu and Kashmir, a company formed and registered under any law for the time being in force in that State ; (iii) in the case of any of the Union territories of Dadra and Nagar Haveli, Goa , Daman and Diu, and Pondicherry, a company formed and registered under any law for the time being in force in that Union territory : Provided that the registered or, as the case may be, principal office of the company, corporation, institution, association or body in all cases is in India ; 10. Per contra, the ld. AR appearing on behalf of the assessee submitted a detailed written submission which is reiterated here in below:- Rajasthan Financial Corporation is a Corporation registered under State financial Corporation Act, 1951. The Corporation filed its Income tax return u/s 139(1) of the Income tax ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable to the Corporation. Clause (b) of Sec 115JB(2) is also not applicable to the Corporation as the second proviso to sub section (1) of sec 129 of the Companies act, 2013 is applicable only to the Companies as defined under the Companies act,2013. Any reference to the word Company in second proviso to sub section (1) of section 129 means the Company as defined in the Companies act,2013 as that is a Companies Act,2013 section and where Company means only the Company as defined under the Companies act, 2013 and not in any other act. ( Company has been defined in sec 2(20) of the Companies act, 2013) We submit that second proviso to sub section (1) of section 129 of the Companies act, 2013 is applicable to the Companies which fall in the definition of company as defined under the Companies act but are also governed by other acts and prepare their [statement of profit and loss] for the relevant previous year in accordance with the provisions of the Act governing such company:] such as Electricity Companies though they are registered under the Companies act but are governed by the Electricity act, 2003 and prepare their Statement of profit loss as per the provisions unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit and loss account as per the provisions of the Act governing such companies) are also subject to the provisions of MAT. Our submission We submit that even after the amendment of sec 115JB(2), by Finance Act,2012 w.e.f 01.04.2013 the MAT provisions are not applicable to the Rajasthan Financial Corporation. As per amendment, clause (b) has been inserted by the Finance act,2012and clause (b) of Sec 115JB(2) is also not applicable to the Corporation as the second proviso to sub section (1) of Sc. 129 of the applicable only to the companies as defined under the companies act. Any reference to the word Company in second proviso to sub section (1) of section 129 means the Company as defined in the Companies act, 2013 as it is Company law section and where Company means only the Company as defined under the Company law and not in any other act. ( Company has been defined in sec 2(20) of the Companies act, 2013) We submit that second proviso to sub section (1) of section 129 of the Companies act, 2013 is applicable to the Companies as defined under the Companies act, 2013 but are governed by other acts and prepare its [statement of profit and loss] for the relevant previous y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... status of the assessee is not company, as per provision of the either of the section and therefore, he supported the order of the lower authority and also heavily relied upon the order of the Jurisdictional High Court in assessee s own case. 12. We have considered the rival contentions and submission placed on record by both the parties, the orders of the lower authorities and also gone through the judicial decision cited before us to drive home to the contentions so raised. The bench noted that the issue before us about the applicability of provision of section 115JB to the assessee Rajasthan Financial Corporation which is a Corporation registered under State financial Corporation Act, 1951. For these we have gone through the definition of company as given in Section 2(17) which defines company and it includes Indian Company. We have also gone through the provision of section 2(26) which defines Indian company and thereby Section 2(26)(ia) includes a corporation established by or under a Central, State or Provisional Act as argued by the ld. DR. We have also considered the plea of the ld. DR that section 115 JB section it self is a code for charging tax for a company and cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the jurisdictional high court in the case of the assessee we do not find any force whether the Honourable Jurisdictional High Court has considered the provision of section 2(17), 2(18) or 2(26) dealt with or not. Here the charging section deals and considered only those companies which are registered under the Companies Act and not deemed company as per provision of section 2(17) or 2 (26). Therefore, we are of the considered view that even though revenue has revised its ground to substantiate its case in accordance with the definition of the company we do not agree with the contention of the ld. DR that the since that definition includes the corporation but provision of section 115JB deals only charge of tax of a company and it refers the section 129 of the Companies Act only. The charge of tax being a separate code and the section clearly cover the type of company under the tax net the same cannot be widened based on the definition given in the Act for the other purposes. To substantiate this view, we have also gone through the memorandum explaining the definitions of company as amended in 1971. The purpose of including the corporation under this definition as it is evident f ..... 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