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.
