Case Law Details
CIT Vs Royal Bank of Scotland N.V. (Calcutta High Court)
The Calcutta High Court considered the substantial question of law: whether a nationalised banking company would be subject to the requirements of Section 115JB of the Income-tax Act, 1961.
At the outset, the respondent-assessee submitted that Section 115JB was not applicable to the assessment year 2011-12 because the provision, introduced by the Finance Act, 2012, became applicable only from Assessment Year 2013-14. It was also submitted that the Royal Bank of Scotland was not a nationalised bank. Further, for the relevant assessment year, the tax computed on normal income under Section 143(3) exceeded the tax calculated under Section 115JB, and therefore tax was computed under the normal provisions. The appellant also supported the position that Section 115JB became applicable only from Assessment Year 2013-14.
After hearing both parties, the High Court observed that the assessee was not a national banking company and that Section 115JB came into effect only from Assessment Year 2013-14 by virtue of the Finance Act, 2012. Since the assessment related to Assessment Year 2011-12, the assessee’s income had rightly been computed under Section 143(3), and Section 115JB had no application to the relevant assessment year.
Accordingly, the Court answered the substantial question of law in the negative and in favour of the assessee. The appeal was dismissed.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
The Court: Learned counsel appearing for the appellant raises the question of law framed on 17th June, 2019 by their Lordships Hon’ble Justice P. Mukerji and Hon’ble Justice Md. Nizamuddin. The substantial question of law framed in the above appeal is as under:
“Whether a nationalised banking company would be subject to the requirements of section 115JB of the Income Tax Act, 1961?”
At the outset, the learned counsel appearing for the respondent/assessee submits that Section 115JB is not applicable in the assessment year in question, namely assessment year 2011-12, as this provision was introduced by the Finance Act, 2012 and became applicable from the assessment year 2013-14. The Royal Bank of Scotland is not a nationalised bank, and for the relevant assessment year, tax on normal income calculated under section 143(3) exceeded the tax calculated under section 115JB; accordingly, the tax payable was computed at the normal rate.
Learned counsel for the appellant supports the respondent/assessee’s position, contending that Section 115JB of the Income Tax Act was applicable from the assessment year 2013-14.
We have heard the counsel for the parties. Since the assessee, Royal Bank of Scotland, is not a national banking company and the provisions of section 115JB came into effect from the assessment year 2013-14 by virtue of the Finance Act, 2012, the respondent/assessee company computed its normal income under section 143(3), and the assessment was made by the Assessing Officer under that same provision. There is no applicability of section 115JB in the relevant assessment year. Consequently, the question framed on 17th June, 2019 is answered in the negative and in favour of the assessee. The appeal is accordingly dismissed.
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