Section 115JB (MAT) applies to companies regardless of whether they pay dividends. However, MAT credit under Section 115JAA is allowable in 'abated' assessments under Section 153A, as the assessment is framed afresh based on both incriminating and regular books of account.

ORDER

Per Satbeer Singh Godara, Judicial Member:

These assessee’s twin appeals for Assessment Years 2019-20 and 2020-21 arise against the CIT(A)-26, New Delhi’s DIN & order Nos. ITBA/APL/M/250/2025-26/1075774503(1) and ITBA/APL/M/250/2024-25/1071697016(1) dated 15.04.2025 and 30.12.2024, in proceedings u/s 153A r.w.s. 143(3) of the Income Tax Act, 1961 (in short “the Act”), respectively.

2. Heard both the parties at length. Case files perused.

3. The assessee’s “lead” appeal ITA No. 3068/Del/2025 for assessment year 2019-20 raises the following substantive grounds:

“1. Asstt. framed U/s. 153A is unsustainable in law as well as on merits.

2. That no proper and reasonable opportunity of hearing has been allowed.

3. That under the facts and circumstances of the case, there is no justification in law in computing book profit U/s. 115JB at Rs. 9,30,57,375/-.

4. (A) That the Ld. AO has erred in law as well as on facts in restricting MAT credit to be set off U/s. 115JAA at Rs. 2,11,85,180/- against at Rs. 3,93,30,475/-.

(8) That without prejudice, the MAT credit to be allowed U/s. 115JAA is to be allowed before charging of surcharge and Health and Education Cess.

5. That under the facts and circumstances, no interest U/s. 234A, 234B & 234C should have been charged, In any case, the calculations are erroneous and excessive.”

4. We next note that the CIT(A)’s impugned lower appellate discussion has rejected the assessee’s corresponding substantive grounds seeking exemption from section 115JB “MAT” computation; reads as under:

10. Ground no. 8 and 9: These grounds of appeal have been raised against the action of AO in considering the book profit of INR 9,30,57,375/- as the taxable income and levying the applicable tax rate as per section 115JB. The appellant stated that in the return filed in response to notice U/s. 153A has claimed set off of MAT credit of Rs. 3,93,30,475/- U/s. 115JAA. The income has been assessed U/s. 115JB in the assessment order without specifying any reason and only for the reason that the same has been in the intimation U/s. 143(1) issued. Apparently, it shows book profit of INR 9,30,57,375 as per the books of accounts maintained by it for the relevant assessment year. Therefore, the tax liability u/s 115JB of the Act (MAT) would be 15% of such book profit Further, as the tax liability under MAT provisions are higher than that under the normal computation under the income-tax Act, such book profit would be the taxable base as per section 115JB of the Act and the appellant is liable to pay tax at the rate specified under section 115JB of the Act. However, the appellant’s contention is that the appellant company does not pay dividend and therefore, MAT provisions would not be applicable to it. It has relied upon the decisions of Best Trading and Agencies Ltd. Vs. DCIT IN ITA NO. 191 OF 2011 DTD. 26.08.2020 BY HON’BLE KARNATAKA HIGH COURT, Kolkata ITAT in case of Sasamusa Sugar Works Pvt. Ltd. Vs. DCIT IN CO. NO. 15/KOL/2017 DTD. 04.07.2022.

10.1 Before going to decide the issue, it is essential to understand, in brief, the evolution of such provision. Income-tax Act generally provides a number of tax relief such as exemptions or deductions including super deduction or accelerated depreciation, etc. as a matter of tax policy to promote certain activities, etc. Accordingly, certain taxpayer, being a company, may not be liable for payment of tax under the provisions of income-tax Act because of tax relief even when it has substantial book profit as per financial statement prepared under the companies Ac