TATA AIG GENERAL INSURANCE COMPANY LTD, MUMBAI V. CIT 6, MUMBAI

ITA 968/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0393 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2005-2006
• Appeal Filed On: 12-02-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Recovery proceedings; Depreciation; Double taxation relief; Opportunity of being heard; Period of limitation; Difference of opinion; Revised return; Unabsorbed depreciation; Change of opinion; Reassessment proceedings
• Section: 143(3); 14A; 115JB; 139(5); 147; 148; 12; 10; 11; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'E' BENCH, MUMBAI BEFORE SHRI P K BANSAL, VICE PRESIDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.968 /MUM/2015 (ASSESSMENT YEAR: 2005-06) TATA AIG GENERAL INSURANCE VS. D C I T - 2(3) COMPANY LTD. 15TH FLOOR, TOWER A PENINSULA CORPORATE PARK G.K. MARG, LOWER PAREL MUMBAI 400013 AAYAKAR BHAVAN M.K. ROAD MUMBAI 400020 PAN AABCT3518Q APPELLANT RESPONDENT APPELLANT BY: SHRI NISHANT THAKKAR RESPONDENT BY: SHRI ANAND MOHAN DATE OF HEARING: 14.06.2017 DATE OF PRONOUNCEMENT: 16.06.2017 O R D E R PER P.K. BANSAL, VICE PRESIDENT THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) -6, MUMBAI DATED 14.10.2014 FOR A.Y. 2005-06 BY TAKING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL: - 1. THE LEARNED CIT(A) ERRED IN PERMITTING THE REAS SESSMENT PROCEEDINGS UNDER SECTION 147 OF ACT. THE REASSESSM ENT PROCEEDINGS HAVE BEEN DONE PURSUANT TO ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT AFTER THE EXPIRY OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR RESULTING IN TH E PROCEEDINGS BECOMING TIME BARRED. 2. THE LEARNED CIT(A) ERRED IN CONCLUDING THAT THE REASSESSMENT PROCEEDINGS WERE NOT ON THE BASIS OF MERE CHANGE IN OPINION ON THE RECORDS AVAILABLE AT THE TIME OF ORIGINAL SCRUT INY ASSESSMENT AND THEREFORE THE REASSESSMENT PROCEEDINGS ARE VOID AB-INITIO AND BAD IN LAW. 3. THE LEARNED CIT(A) ERRED IN CONCLUDING THAT MERE ISSUANCE OF INTIMATION UNDER SECTION 143(1) AMOUNTS TO COMPLETI ON OF ASSESSMENT PROCEEDINGS AND THEREFORE THE REVISED RE TURN OF ITA NO. 968/MUM/2015 TATA AIG GENERAL INSURANCE COMPANY LTD. 2 INCOME FILED FOR AY 2004-05 SUBSEQUENT TO THE INTIM ATION IS INVALID. FURTHER THE LEARNED CIT(A) HAS MISINTERPRE TED THE JUDICIAL PRECEDENT OF ACIT V RAJESH JHAVERI STOCK BROKERS (P ) LTD [2007 291 ITR 500 (SC)]. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN APPLYING THE PROVISIONS OF SECTION 115JB OF THE ACT TO THE APPELLANT WHICH IS IN THE BUSINES S OF GENERAL INSURANCE. 5. NOTWITHSTANDING TO GROUND NO. 4, THE LEARNED CIT (A) FAILED TO APPRECIATE THE FACT THAT IN THE ABSENCE OF ANY SPEC IFIC GUIDANCE IN THE ACT ON THE MANNER OF SET-OFF OF UNABSORBED LOSS/UNABSORBED DEPRECIATION, THE ASSESSEE MAY ADOP T ANY SUCH METHOD WHICH IS LOGICAL AND DOES NOT VIOLATE A NY PROVISIONS OF THE ACT. 6. NOTWITHSTANDING TO GROUND NO. 4, ON THE FACTS AN D IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C IT(A) ERRED IN MAKING AN ADDITION OF RS 27,12,326 BEING EXPENDITUR E RELATABLE TO ANY INCOME TO WHICH SECTION 10 [OTHER THAN SECTI ON 10(38)] OR SECTION 11 OR SECTION 12 APPLIES, WHILE COMPUTING T HE BOOK PROFITS UNDER THE PROVISIONS OF SECTION 115JB OF THE ACT. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN UPLOADING THE DISALLOWANCE UNDER SECTION 14A DONE BY THE LEARNED AO. 2. AT THE OUTSET, THE LEARNED A.R. CONTENDED THAT GROU ND NOS. 3 TO 7 MAY BE HEARD AND IN CASE THESE GROUNDS ARE ALLOWED GROUND NOS. 1 & 2 SHALL BECOME INFRUCTUOUS. 3. THE LEARNED D.R. WAS ALSO FAIR ENOUGH TO CONCEDE TH E POSITION. 4. WE, THEREFORE, DECIDED TO DISPOSE OFF GROUND NOS. 3 TO 7 FIRST. GROUND NO. 3 RELATES TO THE ISSUE WHETHER REVISED RETURN F ILED BY THE ASSESSEE IN THE IMPUGNED A.Y. SUBSEQUENT TO THE ISSUE OF THE IN TIMATION UNDER SECTION 143(1) IS VALID OR NOT. THE FACTS RELATING TO THIS GROUND ARE THAT THE ASSESSEE FILED THE ORIGINAL RETURN OF INCOME ON 28. 10.2005 DECLARING NIL INCOME UNDER THE NORMAL PROVISIONS OF THE INCOME TA X ACT WHILE COMPUTING THE BOOK PROFIT UNDER SECTION 115JB AT RS .13,80,48,000/-. THE ORIGINAL RETURN WAS PROCESSED UNDER SECTION 143(1) ON 06.10.2005. THE ASSESSEE SUBSEQUENTLY FILED A REVISED RETURN UNDER SECTION 139(5) ON 31.03.2006. IN THE REVISED RETURN THE ASSESSEE HAS INCREASED THE LOSS ITA NO. 968/MUM/2015 TATA AIG GENERAL INSURANCE COMPANY LTD. 3 AVAILABLE FOR SET OFF WHICH WAS CLAIMED AT RS.24,74 ,10,047/- IN THE ORIGINAL RETURN. IN THE REVISED RETURN THE ASSESSEE HAS SET OFF BROUGHT FORWARD LOSSES AT RS.2,57,03,358/- AND CLAIMED CARRY FORWAR D OF LOSS AT RS.32.76 CRORES. THE ASSESSMENT UNDER SECTION 143(3) WAS COM PLETED ON 28.12.2007 WHEREIN THE ORIGINAL LOSS OF RS.32,76 CRORES WAS AL LOWED TO BE SET OFF AS PER THE REVISED RETURN OF INCOME OF A.Y. 2004-05. SUBSE QUENTLY THE ASSESSMENT SO COMPLETED WAS REOPENED BY ISSUE OF NO TICE UNDER SECTION 148 DATED 24.06.2011 AS IT WAS FOUND THAT BROUGHT F ORWARD LOSSES HAVE BEEN ALLOWED IN EXCESS. THE ASSESSEE, IN RESPONSE T HERETO, SUBMITTED THAT THE ORIGINAL RETURN FILED BY THE ASSESSEE SHOULD BE TREATED AS THE RETURN IN RESPONSE TO THE NOTICE UNDER SECTION 148. THE AO, W HILE COMPLETING THE ASSESSMENT, WAS OF THE VIEW THAT THE ASSESSEES REV ISED RETURN OF INCOME FILED ON 31.03.2006 FOR A.Y. 2004-05 WAS NOT TO BE CONSIDERED AS THE SAME WAS FILED AFTER THE COMPLETION OF THE ASSESSMENT AN D THEREFORE HE ALLOWED THE LOSS TO THE ASSESSEE IN ACCORDANCE WITH THE ORI GINAL RETURN FILED BY THE ASSESSEE. THE ASSESSEE CONTENDED THAT HE HAS FILED THE REVISED RETURN WITHIN THE TIME ALLOWED UNDER SECTION 139 AS PER TH E PROVISIONS OF SECTION 139(5). THE AO DID NOT AGREE WITH THE CONTENTION OF THE ASSESSEE AS IN HIS VIEW THE ASSESSEE HAS FILEDE ITS REVISED RETURN AFT ER THE ASSESSMENT HAS BEEN COMPLETED UNDER SECTION 143(1). WHEN THE MATTE R WENT BEFORE THE CIT(A), THE CIT(A) CONFIRMED THE ORDER OF THE AO. 5. NOW THE QUESTION BEFORE US IS WHETHER THE RETURN FI LED BY THE ASSESSEE UNDER SECTION 139(5) AFTER PROCESSING OF T HE RETURN UNDER SECTION 143(1) IS A VALID RETURN OR NOT SO THAT THE ASSESSE E CAN BE ENTITLED FOR THE BENEFIT OF EXCESS SET OFF OF LOSSES AND CARRY FORWA RD OF THE SAME AS PER THE REVISED RETURN FILED BY THE ASSESSEE. 6. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE NOTED THAT SIMILAR ISSU E HAS COME BEFORE THE HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE O F TARSEM KUMAR VS. INCOME TAX OFFICER 256 CTR 116 IN WHICH THE HON'BLE HIGH COURT WHILE DEALING WITH THE SAID POSITION HELD AS UNDER: - ITA NO. 968/MUM/2015 TATA AIG GENERAL INSURANCE COMPANY LTD. 4 7. IN THE PRESENT CASE, THE ASSESSEE HAD BEEN FORW ARDED WITH THE INTIMATION REGARDING PROCESSING OF RETURN UNDER SEC TION 143(1)(A) OF THE ACT ON 8.12.2005. THE QUESTION FOR CONSIDERATION WOULD BE WHETHER AN INTIMATION UNDER SECTION 143(1)(A) OF THE ACT WOULD CONSTITUTE ASSESSMENT SO AS TO DISENTITLE THE ASSESSEE TO FILE THE REVISE D RETURN. THE SAID QUESTION STANDS ANSWERED BY THE HON'BLE APEX COURT IN ASSISTANT COMMISSIONER OF INCOME TAX V. RAJESH JHAVERI STOCK BROTHERS P. LTD. (2007) 291 ITR 500 (SC) IN THE FOLLOWING TERMS:- 'IT IS TO BE NOTED THAT THE EXPRESSIONS 'INTIMATION ' AND 'ASSESSMENT ORDER' HAVE BEEN USED AT DIFFERENT PLACES. THE CONTEXTUAL DIFFERENCE BETWEEN THE TWO EXPRESSIONS HAS TO BE UNDERSTOOD IN THE CONTEXT THE EXPRESSIONS ARE USED. ASSESSMENT IS USED AS MEANING SOMETIMES 'THE COMPUTATION OF INCOME', SOMETIMES 'THE DETERMINATION OF THE AMOUNT OF TAX PAYABLE' AND SOMETIMES 'THE WHOLE PROCEDURE LAID DOWN IN THE ACT FOR IMPOSING LIABILITY UPON THE TAX PAYER'. IN THE SCHEME OF THINGS, AS NO TED ABOVE, THE INTIMATION UNDER SECTION 143(1)(A) CANNOT BE TREATED TO BE AN ORDER OF ASSESSMENT. THE DISTINCTION IS ALSO WELL BROUGHT OUT BY THE STATUTO RY PROVISIONS AS THEY STOOD AT DIFFERENT POINTS OF TIME. UNDER SECTION 14 3(L) (A) AS IT STOOD PRIOR TO APRIL 1, 1989, THE ASSESSING OFFICER HAD TO PASS AN ASSESSMENT ORDER IF HE DECIDED TO ACCEPT THE RETURN, BUT UNDER THE AMENDED PROVISION, THE REQUIREMENT OF PASSING OF AN ASSESSMENT ORDER HAS B EEN DISPENSED WITH AND INSTEAD AN INTIMATION IS REQUIRED TO BE SENT. V ARIOUS CIRCULARS SENT BY THE CENTRAL BOARD OF DIRECT TAXES SPELL OUT THE INT ENT OF THE LEGISLATURE, I.E., TO MINIMIZE THE DEPARTMENTAL WORK TO SCRUTINIZE EAC H AND EVERY RETURN AND TO CONCENTRATE ON SELECTIVE SCRUTINY OF RETURNS. TH ESE ASPECTS WERE HIGHLIGHTED BY ONE OF US (D. K. JAIN J) IN APOGEE I NTERNATIONAL LIMITED V. UNION OF INDIA [1996] 220 ITR 248 (DELHI). IT MAY B E NOTED ABOVE THAT UNDER THE FIRST PROVISO TO THE NEWLY SUBSTITUTED SECTION 143(1), WITH EFFECT FROM JUNE 1, 1999, EXCEPT AS PROVIDED IN THE PROVISION I TSELF, THE ACKNOWLEDGMENT OF THE RETURN SHALL BE DEEMED TO BE AN INTIMATION UNDER SECTION 143(1) WHERE (A) EITHER NO SUM IS PAYABLE B Y THE ASSESSEE, OR (B) NO REFUND IS DUE TO HIM. IT IS SIGNIFICANT THAT THE AC KNOWLEDGMENT IS NOT DONE BY ANY ASSESSING OFFICER, BUT MOSTLY BY MINISTERIAL STAFF. CAN IT BE SAID THAT ANY 'ASSESSMENT' IS DONE BY THEM? THE REPLY IS AN EMPHATIC 'NO'. THE INTIMATION UNDER SECTION 143 (1)(A) WAS DEEMED TO B E A NOTICE OF DEMAND UNDER SECTION 156, FOR THE APPARENT PURPOSE OF MAKI NG MACHINERY PROVISIONS RELATING TO RECOVERY OF TAX APPLICABLE. BY SUCH APPLICATION ONLY RECOVERY INDICATED TO BE PAYABLE IN THE INTIMATION BECAMEPERMISSIBLE. AND NOTHING MORE CAN BE INFERRED FROM THE DEEMING PROVI SION. THEREFORE, THERE BEING NO ASSESSMENT UNDER SECTION 143(1)(A), THE QU ESTION OF CHANGE OF OPINION, AS CONTENDED, DOES NOT ARISE. 8. THE AFORESAID JUDGMENT WAS WAS FOLLOWED BY THE D IVISION BENCH OF THIS COURT IN CWP NO. 17854 OF 2007 (BALJIT SINGH V. COM MISSIONER OF INCOME TAX-II AND ANOTHER) DECIDED ON 3.12.2007 (ANNEXURE P-21). 9. ONCE THAT IS SO, THERE WAS NO REGULAR ASSESSMENT FRAMED IN THE PRESENT CASE. THEREFORE, THE ASSESSEE FOR ASSESSMENT YEAR 2 005-06 COULD FILE THE ITA NO. 968/MUM/2015 TATA AIG GENERAL INSURANCE COMPANY LTD. 5 REVISED RETURN AFTER COMPLYING WITH THE PROVISIONS OF SECTION 139(5) OF THE ACT UP TO 31.3.2007. THE REVISED RETURN FILED ON 26 .09.2006 WAS THUS VALIDLY FILED WITHIN LIMITATION. CONSEQUENTLY, THE CLAIM OF THE PETITIONER- ASSESSEE FOR THE REFUND OF THE ADDITIONAL TAX DEPOS ITED AMOUNTING TO RS. 3,61,188/- IS VALID AND JUSTIFIED. 10. LEARNED COUNSEL FOR THE PETITIONER HAS FURTHER RELIED UPON A DIVISION BENCH JUDGMENT OF THIS COURT IN ROADMASTER INDUSTRIES OF INDIA PVT. LTD. V. COMMISSIONER OF INCOME TAX AND ANOTHER, (20 09) 329 ITR 69 TO CANVASS THAT THE PETITIONER WAS ALSO ENTITLED TO INTEREST FROM THE DATE THE AMOUNT WAS DEPOSITED TILL THE DATE OF GRANTING OF THE REFUND TO THE PETITIONER. RELIANCE WAS PLACED ON THE FOLLOWING OB SERVATIONS:- 'AS A SEQUEL TO THE AFORESAID DISCUSSION, THESE WRI T PETITIONS ARE ALLOWED AND THE ORDER DATED APRIL 30, 2007 (P-12) PASSED BY THE COMMISSIONER OF INCOME- TAX IS HEREBY QUASHED. CONSEQUENTLY, THE RE SPONDENTS ARE DIRECTED TO CALCULATE THE AMOUNT OF INTEREST PAYABLE TO THE ASSESSEE-PETITIONER FROM THE DATE THE AMOUNT WAS DEPOSITED BY IT TILL THE DA TE THE REFUND IS GRANTED. THE ASSESSEE-PETITIONER SHALL ALSO BE ENTITLED TO T HE AMOUNT OF INTEREST ON INTEREST. THE AFORESAID DIRECTIONS SHALL BE SUBJECT TO ADJUSTMENT OF THE AMOUNT WHICH MIGHT HAVE ALREADY BEEN PAID TO THE AS SESSEE-PETITIONER. THE NEEDFUL SHALL BE DONE WITHIN A PERIOD OF THREE MONTHS FROM THE DATE OF RECEIPT OF A CERTIFIED COPY OF THIS ORDER.' 11. IN VIEW OF THE ABOVE, WE ALLOW THE WRIT PETITIO N AND DIRECT THAT THE REFUND BE RELEASED TO THE PETITIONER WITHIN THREE M ONTHS FROM THE DATE OF RECEIPT OF CERTIFIED COPY OF ORDER ALONG WITH INTER EST AT THE RATE OF 12% PER ANNUM TILL THE DATE OF MAKING THE PAYMENT TO HIM. SIMILAR ISSUE HAS ARISEN BEFORE THE HON'BLE GUJAR AT HIGH COURT IN THE CASE OF S.R. KOSHTI VS. CIT 276 ITR 165 IN WHICH AL SO THE HON'BLE HIGH COURT TOOK THE VIEW THAT THE INTIMATION ISSUED UNDE R SECTION 143(1) CANNOT BE TREATED AS ORDER OF ASSESSMENT AND ON THE BASIS OF SUCH ORDER THE ASSESSEE DENIED HIS STATUTORY RIGHTS TO FILE A REVI SED RETURN WITHIN THE PERIOD OF LIMITATION. NO CONTRARY DECISION WAS BROU GHT TO OUR NOTICE. IN VIEW OF THE AFORESAID DECISIONS OF BOTH THE HIGH CO URTS, WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE AO TO ACCEPT THE REVISED RETURN FILED BY THE ASSESSEE AS A VALID RETURN AND COMPLETE THE ASS ESSMENT AFTER CONSIDERING THE REVISED RETURN BE A VALID RETURN. T HUS GROUND NO. 3 TAKEN BY THE ASSESSEE IS ALLOWED. 7. GROUND NO. 4 RELATES TO THE APPLICABILITY OF PROVIS IONS OF SECTION 115JB. ITA NO. 968/MUM/2015 TATA AIG GENERAL INSURANCE COMPANY LTD. 6 8. THE LEARNED A.R. BEFORE US VEHEMENTLY CONTENDED THA T PROVISIONS TO SECTION 115JB IS NOT APPLICABLE TO THE ASSESSEE AS THE ASSESSEE IS A GENERAL INSURANCE COMPANY DURING THE IMPUGNED ASSESSMENT YE AR. IN THIS REGARD RELIANCE WAS PLACED ON PAGES 13 TO 14 (PARAS 36 TO 42) OF ASSESSEES OWN CASE ORDER IN ITA 7748/MUM/2013 IN WHICH THE E BE NCH OF THIS TRIBUNAL VIDE ORDER DATED 04.12.2015 TOOK THE VIEW THAT PROV ISIONS OF SECTION 115JB DO NOT APPLY IN THE CASE OF THE ASSESSEE. RELIANCE WAS ALSO PLACED ON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CAS E OF CIT VS. THE BANK OF TOKYO MISUBISHI UFJ LTD. IN ITA 604/2015 IN WHICH C ASE ALSO THE HON'BLE DELHI HIGH COURT VIDE ORDER DATED 08.04.2016 IN PAR A 20 TAKEN THE SAME VIEW. 9. THE LEARNED D.R., ON THE OTHER HAND, RELIED ON THE ORDER OF THE AO AS WELL AS EXPLANATION 3 OF SECTION 115JB WHICH WAS IN SERTED UNDER SECTION 115JB BY THE FINANCE ACT, 2012. 10. THE LEARNED A.R. IN COUNTER DRAWN OUR ATTENTION TOW ARDS THE DECISION OF THE DELHI BENCH OF THIS TRIBUNAL IN THE CASE OF THE BANK OF TOKYO MITSUBISHI UFJ LTD. VS. ADIT 152 ITD 796 IN W HICH THIS TRIBUNAL HAS DISCUSSED EXPLANATION 3 AS INSERTED BY THE FINA NCE ACT, 2012 W.E.F. 01.04.2013 AND ON THAT BASIS IT WAS CONTENDED THAT THE TRIBUNAL HAD TAKEN A VIEW THAT THE AMENDMENT WHICH BRINGS SUBSTA NTIAL CHANGE IN THE COMPUTATION PROVISION CANNOT BE HELD TO BE RETROSPE CTIVE. IT WAS FURTHER POINTED OUT THAT THIS DECISION OF THE TRIBUNAL HAS BEEN CONFIRMED IN PARA 12 BY THE HON'BLE DELHI HIGH COURT IN ITA 604/2015 VIDE ORDER DATED 08.04.2016. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND GONE THROUG H THE ORDERS OF THE TAX AUTHORITIES BELOW. THE QUESTION BEFORE US I S WHETHER THE PROVISIONS OF SECTION 155JB ARE APPLICABLE IN THE CASE OF THE ASSESSEE OR NOT. IT IS NOT DENIED THAT THE ASSESSEE IS AN INSURANCE COMPANY IN CORPORATED UNDER THE INSURANCE ACT. IN THE CASE OF ASSESSEE IN ITA NO. 7 748/MUM/2013 WE NOTED THAT THIS TRIBUNAL VIDE ORDER DATED 04.12.201 5 TOOK THE VIEW THAT ITA NO. 968/MUM/2015 TATA AIG GENERAL INSURANCE COMPANY LTD. 7 PROVISIONS OF SECTION 115JB ARE NOT APPLICABLE IN T HE CASE OF THE ASSESSEE BY HOLDING AS UNDER: - 36. THE ASSESSEE HAS ALSO RAISED AN ADDITIONAL GRO UND WHICH PERTAINS TO PROVISIONS OF SECTION 115JB. COUNSEL FO R THE ASSESSEE HAS SUBMITTED THAT BY VIRTUE OF POWERS CONFERRED VIDE S ECTION 254 OF THE ACT READ WITH RULE 11 OF THE INCOME TAX APPELLATE R ULES, THE TRIBUNAL HAS JURISDICTION TO PASS ANY ORDER WHICH IS DEEMED FIT AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE PARTIES, THEREFOR E, THE ADDITIONAL GROUND OF APPEAL MAY BE ALLOWED AND THE ADDITIONAL GROUND MAY BE DECIDED ON MERIT. ON THE OTHER HAND THE LD. DR OPPO SED THE APPLICATION ON THE GROUND THAT SINCE THIS GROUND WA S NOT RAISED BY THE ASSESSEE BEFORE THE LD. CIT(A) THE ASSESSEE IS ESTOPPED FROM TAKING ADDITIONAL GROUND AT THIS STAGE. 37. IN ICICI LOMBARD GENERAL INSURANCE CO LTD. VS A CIT, (2012) 27 TAXMAN.COM.326 (MUM), THE COORDINATE BENCH OF THE M UMBAI ITAT HAS ALLOWED THE SIMILAR APPLICATION HOLDING AS UNDER: - WE HAVE HEARD THE ID. AR OF THE ASSESSEE AS WELL A S THE ID. DR ON THE POINT OF ADMISSIBILITY OF THE ADDITIONAL GROUND AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. SINCE T HE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ON THE ISSUE OF AP PLICABILITY OF THE PROVISIONS OF SECTION 115JB WITH RESPECT TO INS URANCE COMPANIES, WHICH IS PURELY A LEGAL ISSUE AND THEREF ORE, NO NEW FACTS ARE REQUIRED TO BE EXAMINED OR INVESTIGATED F OR ADJUDICATION OF THE ADDITIONAL GROUND RAISED BY THE ASSESSEE. ACCORDINGLY, IN VIEW OF THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD V.CIT(1998) 299 ITR 383, WE ADMIT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE FOR ADJUDICATION ON MERIT'. 38. IN VIEW OF THE DECISION OF COORDINATE BENCH OF ITAT MUMBAI PASSED IN ICICI LOMBARD GENERAL INSURANCE CO LTD. V S ACIT (SUPRA), WE ALLOW THE APPLICATION FOR ADDITIONAL GROUND OF A PPEAL. 39. ON MERIT THE ASSESSEE HAS SUBMITTED THAT THE PR OVISIONS OF SECTION 115JB OF THE ACT ARE NOT APPLICABLE TO INSU RANCE COMPANIES BECAUSE THE PROFIT AND LOSS ACCOUNTS OF THE INSURAN CE COMPANIES ARE NOT REQUIRED TO PREPARE AS PER PART II AND III OF SCHEDULE VI TO COMPANIES ACT, 21956) TO PREPARE SUCH ACCOUNTS AS P ER SCHEDULE VI TO COMPANIES ACT, 1956 WHICH IS THE BASIC REQUIREME NT FOR COMPUTATION OF BOOK PROFIT UNDER SECTION 1153B. ON THE OTHER HAND THE LD. DR HAS SUBMITTED THAT AS PER THE PRE-AMENDM ENT PROVISIONS, THE ACCOUNTS PREPARED IN ACCORDANCE WITH THE INSURA NCE ACT CAN BE TAKEN FOR THE PURPOSE OF SECTION 115JB. 40. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. IN ICICI LOMBARD GENERAL INSURANCE CO LTD. VS ACIT, (2012) 2 7 TAXMAN.COM. ITA NO. 968/MUM/2015 TATA AIG GENERAL INSURANCE COMPANY LTD. 8 326(MUM) THE COORDINATE BENCH, FOLLOWING THE ORDER OF HYDERABAD BENCH OF ITAT PASSED IN STATE BANK OF HYDERABAD VS DCIT, ITA NO 578/HYD/2010 AND ORDER OF MUMBAI TRIBUNAL IN KUNG T HAI BANK VS 3CIT (133 TT3 435) HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE HOLDING AS UNDER FOLLOWING THE DECISIONS OF THE COORDINATE BENCH OF THIS TRIBUNAL WE HOLD THAT WHEN THE INSURANCE COMPANIES, BANKING COMPANIES AND ELECTRICITY GENERATION AND DISTRIBUTI ON COMPANIES ARE TREATED IN THE SAME CLASS AS PER THE PROVISIONS OF SEC. 211 OF THE COMPANIES ACT IN PREPARING THEIR FINAL ACCOUNTS, THEN THESE COMPANIES CANNOT BE TREATED DI FFERENTLY FOR THE PURPOSES OF SEC. 115JB AND ACCORDINGLY, THE PROVISIONS OF SEC. 115JB ARE NOT APPLICABLE IN THE CASE OF THE ASSESSEE.' 41. RESPECTFULLY FOLLOWING THE DECISION OF THE COOR DINATE BENCH OF THE MUMBAI TRIBUNAL AFORESAID, WE ALLOW THE ADDITIO NAL GROUND OF APPEAL OF THE ASSESSEE AND HOLD THAT THE PROVISIONS OF SECTION 115JB OF THE ACT DO NOT APPLY IN THE CASE OF THE ASSESSEE . 12. WE HAVE ALSO CONSIDERED THE CONTENTION RAISED BY TH E LEARNED D.R. THAT IN VIEW OF EXPLANATION 3 THE PROVISIONS OF SEC TION 115JB COULD APPLY TO THE ASSESSEE. WE HAVE GONE THROUGH EXPLANATION 3 TO SECTION 115JB. WE NOTED THAT THE SAID EXPLANATION HAS BEEN INSERTED B Y FINANCE ACT, 2012 W.E.F. 01.04.2013. THE QUESTION BEFORE US IS WHETHE R THIS AMENDMENT IS RETROSPECTIVE AND IS APPLICABLE IN THE IMPUGNED ASS ESSMENT YEAR OR NOT. WE NOTED THAT SIMILAR ISSUE HAS ARISEN BEFORE THE D ELHI BENCH OF THIS TRIBUNAL IN THE CASE OF THE BANK OF TOKYO MITSUBISH I UFJ LTD. VS. ADIT 152 ITD 796 IN WHICH THIS TRIBUNAL DULY CONSIDERED THE PLEA WHETHER EXPLANATION 3 INSERTED IN SECTION 115JB IS RETROSPE CTIVE OR NOT. THE TRIBUNAL IN PARA 74 OF THE ORDER HELD AS UNDER: - 74. LD. CIT(DR) HOWEVER, POINTED OUT THAT TRIBUNAL HAS NOT CONSIDERED IN DETAIL THE IMPORT OF THIS AMENDMENT A ND HAS SIMPLY ON THE BASIS OF DATE OF INSERTION HAS OBSERVED THAT IT IS PROSPECTIVE. HE HAS POINTED OUT THAT IN THE CASE OF STATE BANK OF H YDERABAD PRIMARILY THE DECISION IN THE CASE OF MAHARASHTRA S TATE ELECTRICITY BOARD HAS BEEN FOLLOWED AND EXPLANATION 3 HAS NOT B EEN CONSIDERED. IN OUR OPINION THIS EXPLANATION CANNOT BE HELD TO BE RETROSPECTIVE IN OPERATION BECAUSE IT HAS BROUGHT I N A SUBSTANTIAL CHANGE IN THE COMPUTATION PROVISION. TILL THE INSER TION OF THIS AMENDMENT, VARIOUS DECISIONS CLEARLY HELD THAT IN C ASE OF BANKING COMPANIES, ELECTRICITY COMPANIES AND INSURANCE COMP ANIES, SINCE THEY WERE GOVERNED BY SPECIAL ACTS AND THE PROFIT A ND LOSS ACCOUNT ITA NO. 968/MUM/2015 TATA AIG GENERAL INSURANCE COMPANY LTD. 9 WAS NOT PREPARED AS PER PART II OF SCHEDULE VI TO T HE COMPANIES ACT, THEREFORE, THE COMPUTATION PROVISIONS FAILED. ACCOR DINGLY, IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE O F B.C. SRINIVASA SETTY (SUPRA), 128 ITR 294, THE LAW TILL THE INSERT ION OF THIS EXPLANATION WAS THAT THE PROVISIONS OF SECTION 115J B WERE NOT APPLICABLE ON ACCOUNT OF IMPOSSIBILITY OF COMPUTATI ON AS THE ACCOUNTS WERE NOT PREPARED IN ACCORDANCE WITH PART II, SCHED ULE VI TO THE COMPANIES ACT. NOW BY INCORPORATING EXPLANATION 3, THE COMPANIES GOVERNED BY SPECIAL ACTS WHICH COME WITHIN THE AMBI T OF COMPANY U/S 2(17) ARE COVERED BY THE PROVISIONS OF SECTION 115JB. THEREFORE, THIS AMENDMENT BRINGS SUBSTANTIAL CHANGE IN THE TAX ABILITY OF COMPANIES GOVERNED BY THE SPECIAL ACTS AND, THEREFO RE, CANNOT BE HELD TO BE RETROSPECTIVE. IN THIS REGARD WE ALSO FI ND STRENGTH FROM THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN ITS DECISION DATED 16.9.2014 IN THE CASE OF CIT VS. VATIKA TOWNSHIP PV T. LTD. IN CIVIL APPEALS ARISING OUT OF SLP (C) NO. 1362 OF 2009 AND OTHERS. THE FIVE JUDGES BENCH OF THE HON'BLE SUPREME COURT STRIKES D OWN DIVISION BENCH RULING ON RETROSPECTIVE APPLICABILITY OF PROV ISO TO SECTION 113 OF THE INCOME TAX ACT HOLDING THE PROVISO TO OPERATE P ROSPECTIVELY. LAYING DOWN PERUSAL PRINCIPLES GOVERNING RETROSPECT IVELY, THE HONBLE SUPREME COURT HAS BEEN PLEASED TO RULE THAT UNLESS CONTRARY INTENTION APPEARS, A LEGISLATION IS PRESUMED NOT TO BE INTENDED TO HAVE RETROSPECTIVE OPERATION, CURRENT LAW OUGHT TO GOVERN CURRENT ACTIVITIES, LAW PASSED TODAY CANNOT APPLY TO PAST E VENTS. 13. THE AFORESAID FINDING OF THIS TRIBUNAL HAS BEEN CON FIRMED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF PR. CIT VS. THE BANK OF TOKYO MISUBISHI UFJ LTD. IN ITA 604/2015 IN WHICH VIDE OR DER DATED 08.04.2016 THE HON'BLE HIGH COURT HELD AS UNDER: - 20. THE ITAT HAS AFTER AN ELABORATE DISCUSSION HAD COME TO THE CONCLUSION THAT THE ASSESSEES CLAIM FOR LOWER TAX WILL HAVE TO BE ACCEPTED BECAUSE SECTION 115JB IS SUBJECT TO SECTIO N 90(2) OF THE ACT AND THE TAXABLE INCOME OF THE ASSESSEE WOULD HAVE T O BE COMPUTED IN TERMS OF ARTICLE 7(3) OF THE DTAA. WHAT IS SIGNIFIC ANT IS THAT THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE HAS NOT BEEN PREPA RED IN TERMS OF PART II OF SCHEDULE VI OF THE COMPANIES ACT, 1956 A ND IN FACT COULD NOT HAVE BEEN PREPARED IN TERMS THEREOF. CONSEQUENT LY, THE QUESTION OF APPLICABILITY OF SECTION 1I5JB DID NOT ARISE. AS RIGHTLY POINTED OUT TILL THE INSERTION OF SECTION 115JB, BANKING COMPAN IES WERE REQUIRED TO PREPARE THEIR ACCOUNTS IN TERMS OF SPECIAL ACTS THAT THEY WERE GOVERNED BY, AND THEREFORE THERE WERE NO COMPUTATIO N PROVISIONS AS REGARDS SUCH BANKING COMPANIES. THE CHANGE BROUGHT OUT BY SECTION 115JB WAS THEREFORE NOT RETROSPECTIVE. 14. NO CONTRARY DECISION WAS BROUGHT TO OUR NOTICE. EVE N WE NOTED THAT THE REVENUE HAS GONE BEFORE THE HON'BLE BOMBAY HIGH COURT AGAINST THE ITA NO. 968/MUM/2015 TATA AIG GENERAL INSURANCE COMPANY LTD. 10 ORDER OF THIS TRIBUNAL IN THE CASE OF THE ASSESSEE IN ITA NO. 7748/MUM/2013 BUT HAS NOT RAISED THE ISSUE REGARDIN G APPLICABILITY OF PROVISIONS OF SECTION 115JB. IN VIEW OF THIS FACT W E SET ASIDE THE ORDER OF THE CIT(A) AND HOLD THAT PROVISIONS OF SECTION 115J B ARE NOT APPLICABLE IN THE CASE OF THE ASSESSEE AS THE ASSESSEE IS ENGAGED IN THE BUSINESS OF GENERAL INSURANCE. THIS GROUND OF THE ASSESSEE STAN DS ALLOWED. 15. GROUND NOS. 5, 6 AND 7 ARE CONSEQUENTIAL TO GROUND NO. 4. SINCE WE HAVE ALLOWED GROUND NO. 4, THEREFORE GROUND NO. 5, 6 AND 7, AS CONTENDED BY THE LEARNED A.R., WOULD BECOME INFRUCTUOUS AND D ISMISSED AS SUCH. 16. NOW COMING TO GROUND NOS. 1 AND 2, SINCE WE HAVE ON MERIT DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE THAT THE REVISE D RETURN FILED BY THE ASSESSEE IS A VALID RETURN WHILE DISPOSING GROUND N O. 3, GROUND NOS. 1 AND 2 BECAME INFRUCTUOUS AND STAND DISMISSED AS SUCH. 17. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH JUNE, 2017. SD/ - SD/ - (PAWAN SINGH) (P.K. BANSAL) JUDICIAL MEMBER VICE PRESIDENT MUMBAI, DATED: 16 TH JUNE, 2017 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -6, MUMBAI 4. THE CIT - II, MUMBAI 5. THE DR, E BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.