The core summary is that banks constituted as 'corresponding new ...

New Banks and section 115JB: Nationalized banks exempted from Minimum Alternate Tax (MAT) due to legal technicality.

Case Laws     Income Tax

September 16, 2024

The core summary is that banks constituted as 'corresponding new banks' under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 are not covered under clause (b) of sub-section (2) of section 115JB of the Income Tax Act, which was inserted by the Finance Act, 2012 with effect from 1-4-2013. Though Section 11 of the Acquisition Act deems these banks as Indian companies for the Income Tax Act, it does not make them companies registered under the Companies Act. Section 115JB(2)(b) applies to companies to which the second proviso to Section 129(1) of the Companies Act is applicable, which is not the case for these nationalized banks. The deeming fiction cannot be extended to treat them as companies under the Companies Act for the purpose of Section 115JB(2)(b). Therefore, the provision of Minimum Alternate Tax (MAT) u/s 115JB is not applicable to these 'corresponding new banks' from assessment year 2013-14 onwards.

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