High Court Corrects ITAT Error on Tax Relief: Sections 80IB(13) & 80IA(7) Violations

The High Court held that the ITAT erred in granting relief to the assessee by overlooking mandatory provisions of law under sections 80IB(13), 80IA(7), and rule 18BBB. It found discrepancies in the maintenance of separate books of accounts for eligible units and granting deductions on total profit. The judgment also questioned the classification of activities as trading or production, violation of natural justice principles, determination of SSI unit status, granting of additional depreciation, reliance on precedent, and acceptance of statutory reports in revisionary proceedings. The Court intervened due to the perversely appreciated evidence leading to a miscarriage of justice.

---

---

Admitted on the following "substantial questions of law": whether the ITAT erred in granting relief while overlooking and "ignoring the mandatory provisions of law" in section 80IB(13), 80IA(7) and rule 18BBB; whether the Tribunal was justified in ignoring provisions requiring maintenance of separate books and filing of audit report for the "eligible unit" and in granting relief beyond law; whether, where there is trading as well as a claim of certain portion as "production", the Tribunal was justified in granting 80IB deduction on the total profit; whether an assessee engaged in trading of iron ore (and not in "mining activity") can be treated as involved in "production", contrary to the Apex Court in Sesa Goa Ltd.; whether principles of natural justice were violated by not calling for revised audit reports u/s 80IB; whether the unit was correctly held to be an SSI unit contrary to sec. 80IB(3)(ii) read with sec. 80IB 14(g); whether "additional depreciation" under sec. 32(iia)(B) can be allowed without filing "Form 3AA" and absent production; whether reliance on 208 ITR 481 (CIT v. N S Arunachalam) was warranted; whether a statutory report in "Form 3AA" may be accepted in revisionary proceedings under sec. 263; and whether the appellate authorities perversely appreciated evidence warranting interference.

---