CBDT vide Notification No. 92/2021 in G.S.R. 551(E) dated 10th August 2021 notifies the Income-tax (23rd Amendment), Rules, 2021, to prescribe the procedure and methodology for re-computation of book profit under section 115JB of the Income-tax Act, 1961, (‘Act’) in order to provide relief in MAT payable under section 115JB in certain cases.
Accordingly, a new Rule 10RB ‘Relief in tax payable u/s 115JB(1) due to the operation of section 115JB(2D)’ is inserted in the Income-tax Rules, 1962 along with a new Form No. 3CEEA for claiming the relief.
Section 115JB of the Act provides for MAT at the rate of 15 per cent of its book profit, in case tax on the total income of a company computed under the provisions of the Act is less than the 15 per cent of book profit. Book profit for this purpose is computed by making certain adjustments to the profit disclosed in the profit and loss account prepared by the company in accordance with the provisions of the Companies Act, 2013.
Finance Act, 2021 has amended the provisions of section 115JB to provide for any adjustment on account of additional income of past year(s) included in books of account of the current year on account of secondary adjustment under section 92CE or on account of an Advance Pricing Agreement (APA) entered with the taxpayer under section 92CC.
Accordingly, a new section 115JB(2D) is inserted in the Act to provide that in cases where past year income is included in books of account during the previous year on account of an APA or a secondary adjustment, the Assessing Officer shall, on an application made to him in this behalf by the assessee, recompute the book profit of the past year(s) and tax payable, if any, during the previous year, in the prescribed manner. Further, the provision of section 154 of the Act shall apply so far as possible and the period of four years specified in sub-section (7) of section 154 shall be reckoned from the end of the financial year in which the said application is received by the Assessing Officer.
Now the CBDT has notified the manner in which the book profit of the past year(s) and tax payable, if any, during the previous year shall be required to be recomputed.
For this purpose, the assessee company is required to make an application, in the prescribed format Form No. 3CEEA, to the Assessing Officer to recompute the book profit of the past year(s) and tax payable thereon. The Assessing Officer shall make re-computation or rectification within a period of 4 years from the end of the financial year in which the application is made.
The Form No. 3CEEA is required to file online electronically by uploading a signed printout of said Form in the manner specified by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) and shall be required to be verified by the person who is authorised to verify the return of income of the assessee company under section 140.
Read the full text of Notification No. 92/2021 dated 10th August 2021 on Computation Mechanism for Relief in MAT u/s 115JB
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 10th August, 2021
G.S.R. 551(E).—In exercise of the powers conferred by sub-section (2D) of section 115JB read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:─
1. Short title.-These rules may be called the Income tax (23rd Amendment), Rules, 2021.
2. In the Income-tax Rules, 1962, (hereinafter referred to as principal rules) after rule 10RA, the following rule shall be inserted, namely:—
“10RB. Relief in tax payable under sub-section (1) of section 115JB due to operation of subsection (2D) of section 115JB.- (1) For the purposes of sub-section (2D) of section 115JB, the tax payable by the assessee company under sub-section (1) of section 115JB, for the previous year referred to in that section, shall be reduced by the following amount, namely:-
(A-B) – (D-C), where,
A = tax payable by the assessee company under sub-section (1) of section 115JB on the book profit of the previous year including the past income;
B = tax payable by the assessee company under sub-section (1) of section 115JB on the book profit of the previous year after reducing the book profit with the past income;
C = Aggregate of tax payable by the assessee company under sub-section (1) of section 115JB on the book profit of those past year or years to which the past income belongs;
D = Aggregate of tax payable by the assessee company under sub-section (1) of section 115JB on the book profit of past year or years, referred to in item C, after increasing the book profit with the relevant past income of such year or years:
Provided that if the value of (A-B)-(D-C) in the formula is negative, its value shall be deemed to be zero.
(2) For the purposes of sub-rule (1) past income shall be the amount of income of past year or years included in the book profit or the previous year on account of an advance pricing agreement entered into by the assessee under section 92CC or on account of secondary adjustment required to be made under section 92CE.
(3) On application of provision of sub-rule (1), the tax credit allowed to the assessee under section 115JAA shall be reduced by the amount which is equal to the amount of reduction that has been allowed under sub-rule (1).
(4) The assessee company shall make a claim for relief under sub-section (2D) of section 115JB in Form No. 3CEEA electronically by uploading signed printout of said Form in the manner specified by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be.
(5) Form No.3CEEA shall be verified by the person who is authorised to verify the return of income of the assessee company under section 140.
(6) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall specify the procedure for filing of the Form No. 3CEEA and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the statements so furnished under this rule.
Explanation 1.- The value of amount “A” in the formula shall be deemed to be zero, if there is no tax payable under sub-section (1) of section 115JB on the book profit of that previous year including the past income.
Explanation 2.- The value of amount “B” in the formula shall be deemed to be zero, if there is no tax payable under sub-section (1) of section 115JB on the book profit of that previous year after reducing the book profit with the past income.
Explanation 3.- For the purposes of calculation of amount “C” in the formula, if in any past year or years there is no tax payable under sub-section (1) of section 115JB on the book profit of that year or years, the tax payable for that year or years shall be deemed to be zero.
Explanation 4.-For the purposes of calculation of amount “D” in the formula, if in any past year or years there is no tax payable under sub-section (1) of section 115JB on the book profit of that year or years after increasing the book profit with the relevant past income of such year or years, the tax payable for that year or years shall be deemed to be zero.
3. In the principal rules, in Appendix II, after Form No.3CEE, the following form shall be inserted, namely:–
“FORM No 3CEEA
[See sub-rule (4) of rule 10RB]
Form for furnishing particulars for the year ending 31st March,………for recomputation for any adjustment on account of income of past year(s) included in books of account of previous year by a Company on account of secondary adjustment under section 92CE or on account of an Advance Pricing Agreement entered under section 92CC
Verification
I ____, do hereby declare that what is stated above is true to the best of my knowledge and belief. Verified today, the day of _____
Place:
Date:
…………………………….
Signature of the Authorised Signatory.”.
[Notification No. 92/2021/F. No.370142/21/2021-TPL (Part)]
RAJESH KUMAR BHOOT, Jt. Secy. (Tax Policy and Legislation)
Note : The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section-3, Subsection (ii) vide number S.O. 969 (E), dated the 26th March, 1962 and last amended vide notification number G.S.R.545 (E), dated, 9th August,2021.
Download Copy of CBDT Notification No. 92/2021 dated 10th August 2021 on Computation Mechanism for Relief in MAT u/s 115JB in pdf format
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