Separate accounts not mandatory for deductions under sections 80HH and 80-I; Commissioner's revision lacked jurisdiction.

A company claiming deductions under sections 80HH and 80-I of the Income-tax Act, 1961 is not required to maintain or produce separate audited accounts where the statute does not expressly impose that condition. The Court followed earlier Division Bench authority and held that the proviso to section 80-I(1) was inapplicable in the relevant company-assessee context. On that basis, the Commissioner's interference under section 263 lacked a valid foundation and could not be sustained. Both referred questions were answered in favour of the assessee, and the Revenue's objection to the deduction claim failed.

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Issues: (i) Whether the Commissioner's order under section 263 of the Income-tax Act, 1961 was within jurisdiction. (ii) Whether the assessee was required to maintain or produce separate audited accounts in support of deductions under sections 80HH and 80-I of the Income-tax Act, 1961.

Issue (i): Whether the Commissioner's order under section 263 of the Income-tax Act, 1961 was within jurisdiction.

Analysis: The answer to the second referred question controlled the first. Since the law did not require separate accounts for claiming deductions under sections 80HH and 80-I, the basis for the Commissioner's interference did not survive.

Conclusion: The issue was answered in favour of the assessee.

Issue (ii): Whether the assessee was required to maintain or produce separate audited accounts in support of deductions under sections 80HH and 80-I of the Income-tax Act, 1961.

Analysis: The Court followed the earlier Division Bench view that separate accounts are not mandatory for claiming deductions under sections 80HH and 80-I. The proviso to section 80-I(1) was held inapplicable to a company-assessee in the present context.

Conclusion: The issue was answered in favour of the assessee.

Final Conclusion: Both referred questions were answered for the assessee, and the Revenue's objection to the deduction claim failed.

Ratio Decidendi: A company claiming deduction under sections 80HH and 80-I of the Income-tax Act, 1961 is not required to maintain separate accounts where the statute does not expressly impose such a requirement.

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