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TMI Blog2023 (12) TMI 968X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeal for adjudication on merits. We find merit in the contentions of ld. D/R and find it to be reasonable cause and condone the delay. However, considerable time has passed since the new system of National Faceless Appeal Centre has been adopted by the Revenue authorities, therefore, proper procedure should be made and system to be streamlined so that there is no delay in filing the appeal on account of the said reason. 3. Since all these appeals pertain to the same assessee and involves common issue, these are taken together and are being disposed off by this common order for the sake of convenience. As the Revenue has raised similar grounds for all the four years, we reproduce below the grounds raised for AY 2012-13 and the same reads as follows: "1. Whether the Ld. CIT(A) is justified in facts and circumstances of the case in not considering the explanation 3 of Section 115JB inserted in statue by Finance Act, 2012, w.e.f. 01.04.2013 which starts with the words "for the removable of doubts, it is hereby clarified that for the purpose of this section, the assessee being a company to which the proviso to sub-section (2) of section 211 of the Companies Act, 1956 (1 of 1956) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee by the judgment of Hon'ble Jurisdictional High Court in IA No. GA/1/2021, ITAT 12/2021 dated 03.12.2021 in assessee's own case wherein Hon'ble Court dealing with the similar issue for AY 2010-11 decided the question of law against the Revenue. 7. Ld. Counsel for the assessee further, submitted that considering the fact that in the past also Hon'ble Tribunal has decided this issue against the Revenue and further, Hon'ble Jurisdictional High Court has also affirmed the view, therefore, the assessee deserves to succeed in all these appeals. 8. On the other hand, ld. D/R vehemently argued supporting the order of ld. AO and stated that amendment has been brought in Section 115JB of the Act by way of insertion of Explanation effective from 01.04.2013 and the assessee company also falls under the provisions of Section 115JB of the Act. 9. We have heard rival contentions and perused the records placed before us. The issue for our consideration is whether Section 115JB of the Act is applicable on the assessee company. We observe that the assessee company is a Government undertaking owned by Central Government and the State of Bihar & West Bengal and the activities a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the above amendments and the provisions existing prior to 01.04.2013, we notice that prior to 01.04.2013 the type of companies other than those which are required to prepare their financial statements in accordance with provisions of Part '2' & '3' of Schedule VI of Companies Act were not brought into the ambit and there was no clarification in the said provision. However, subsequent to the amendment by 01.04.2013 onwards, the remaining companies have also been brought into the ambit of Section 115JB of the Act. 13. We observe that Hon'ble Jurisdictional High Court while dealing similar question of law in the case of the assessee namely Damodar Valley Corporation for AY 2010-11 has discussed this issue in detail. First, we would like to take note of the substantial question of law which was for consideration before the Hon'ble Court which reads as follows: "(a) Whether in the facts and circumstances of the case, the learned Income Tax Appellate Tribunal has erred in law in directing the Assessing Officer not to apply the provisions of Section 115JB of the Income Tax Act, 1961? (b) Whether in the facts and circumstances of the case, the learned Income Tax Appellate T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o far as the issue on hand by following the decision of the assessee's own case for the assessment years 2008-09 and 2009-10. Aggrieved by the same, the revenue preferred appeal before the Tribunal. The Tribunal by impugned order dismissed the appeal following the decision rendered by the co-ordinate bench of the Tribunal in the assessee's own case Damodar Valley Corpn. v. Addl. CIT [2016] 66 taxmann.com 25/157 ITD 415 (Kol. - Trib.). Aggrieved by the same the revenue is before us by way of this appeal. 4. Learned counsel appearing for the respondent/assessee submitted that in so far as the assessment years which were the subject-matter of the order passed by the Tribunal dated 13th January, 2016 pursuant to the direction issued by the Government of India, the respondent/assessee had availed the benefit of Vivad se Vishwas scheme. Though the revenue had filed appeals before this Court, those appeals were dismissed on the same ground. Therefore, we are required to design the legal issue raised in this appeal before us by the revenue. The undisputed facts are that the assessee is incorporated under the Act of Parliament known as Damodar Valley Corporation Act, 1948. In term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was inserted in the Income-tax Act, with effect from 1st April, 2001. Identical stand was taken by the revenue by contending that the assessee being a company, provisions of section 115JB would stand attracted. While considering the said question, it was pointed that the appellant, though is by definition a company under the Income-tax Act and deemed to be a company for the purpose of income tax by virtue of the declaration of section 80 of the Electricity Supply Act (therein) and section 43 of the DVC Act, 1948 (herein), it is not a company for the purpose of Companies Act. The assessee is not obliged either to convene an annual general meeting or place its profit and loss account in such general meeting. Further, the Court pointed out that the legislature took note of the fact that a number of companies paying marginal tax and also "zero-tax" has grown and such companies earn substantial book profit and pays handsome dividend to the share-holders without paying any tax to the exchequer. Further, it was pointed out that CBDT understood that companies engaged in the business of generation and distribution of electricity and enterprises engaged in developing, maintaining and oper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 166 of the Companies Act, 1956 is not possible in the case of the assessee as there are no shareholders of the assessee. It is also worth mentioning that under section 166 of the Companies Act, 1956 every company is required to hold a general meeting in each year and section 201 mandates that every year the Board of Directors of the company in general meeting shall lay before the company a Balance sheet as at the end of the relevant period and also profit and loss account for the period. Part II and Part III of Schedule VI to the Companies Act specify the method and manner of maintaining profit and loss account. It is also pertinent to note that the assessee under section 210 of the Companies Act, 1956 is also required to lay its account before the annual general meeting. However such accounts have to be prepared in accordance with the Banking Regulation Act, 1949 which is not possible for the reasons assigned supra. 9. The submission that proviso to sub-section (2) of section 115JB creates a legal fiction cannot be accepted as under the aforesaid proviso, the company has to prepare the profit and loss account and to place it before the annual general meeting in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e agree with the view taken by Bombay High Court in THE COMMISSIONER OF INCOME TAX-LTU referred to supra on the common substantial question of law involved in these appeals. For the foregoing reasons, it is held that the provisions of section 115JB(2) of the Act do not apply to the Banking companies." 5. The decision in ING Vysya Bank Ltd. (supra) was followed by the High Court of Karnataka in Pr. CIT v. Karnataka Power Corpn. Ltd. [2021] 129 taxmann.com 179/281 Taxman 600/436 ITR 292 and the appeal filed by the revenue was dismissed. The revenue had raised before us the effect of the amendment brought about to section 115JB by Finance Act, 2012 with effect from 1st April, 2013 and sought to impress upon us the effect of such amendment to sustain their contention. This very issue was considered by the High Court of Bombay in the case of CIT, LTU v. Union Bank of India [2019] 105 taxmann.com 253/263 Taxman 685. The Court held that the amendments to section 115JB are neither declaratory nor classificatory but are substantive and significant legislative changes and can be applied only prospectively. The operative portion of the decision is as follows: "17. This proviso thus refers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, the High Court of Kerala in Pr. CIT v. State Bank of India [IT Appeal No. 143 (Ker.) of 2019, dated 26-9-2019] in 2019-TIOL-2558-HC-Kerala-IT had considered the identical issue in respect of a banking company and following the decision in the Kerala State Housing Board case (supra) and Union Bank of India case (supra) had dismissed the appeal filed by the revenue. 7. In the light of the above legal position, we are of the clear view that the grounds canvassed by the revenue before us and the substantial questions of law raised by them have to be necessarily answered against the revenue. 8. In the result, the appeal (ITAT/12/2021) stands dismissed and the substantial questions of law are answered against the revenue. 9. Consequently, the connected application for stay (GA/2/2021) is also dismissed." 15. From perusal of the ratio laid down by the Hon'ble Jurisdictional High Court, we find that Hon'ble Court has held that prior to the amendment brought in Section 115JB of the Act by Finance Act, 2012 effective from 01.04.2013 Section 115JB of the Act was not applicable on the categories of companies like that of the assessee but post-amendment it is applicable by vir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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