2018 (11) TMI 1253 - HC - Income Tax

High Court sets aside Tribunal order, remands issue for comprehensive review under Section 80IA

The High Court allowed the appeals, emphasizing the need for a more thorough examination of the facts. The Court set aside the Tribunal's order and ... Disallowance u/s 80IA to the unit established in Andhra Pradesh - which category the appellant's industry would fall? - Held that:- Section 80IA as was available in the Income Tax Act at that point of time. Various types of industries were referred to therein, under the various clauses, the commencement of which were specified between different periods. There is no consideration by the First Appellate Authority or the Tribunal as to under which category the appellant's industry would fall. If, as the First Appellate Authority found, the claim is only on the basis of an industrial undertaking existing in a industrially backward State, then on the finding of the First Appellate Authority, there is no question of a remand. We notice that the issue has not been considered with reference to the facts and the law as seen from Section 80IA of the Act, as it existed during the relevant assessment years. We set aside the order of the Tribunal and remand the issue to the Tribunal to consider the claim under Section 80IA of the Act with reference to the categorisation of the appellant's industry; as is discernible from the various clauses. Issues:1. Disallowance under Section 80IA of the Income Tax Act for an industrial unit established in Andhra Pradesh.2. Discrepancies in audit requirements and accounting practices.3. Tribunal's decision based on a different case.4. Lack of consideration for the industry category under Section 80IA.Issue 1: Disallowance under Section 80IA of the Income Tax Act for an industrial unit established in Andhra Pradesh:The First Appellate Authority disallowed the deduction under Section 80IA for an industrial unit in Andhra Pradesh as it commenced manufacturing after 01.04.1993, which was outside the specified period for industrially backward States. Additionally, the industrial undertaking's accounts were not audited as required by Section 80IA(2) of the Act. The appellant was directed to approach the Assessing Officer for further consideration.Issue 2: Discrepancies in audit requirements and accounting practices:The audit of the assessee's accounts did not include separate accounts for the industrial undertaking claiming the deduction under Section 80IA. This discrepancy led to the disallowance of the deduction, highlighting the importance of maintaining distinct accounts for such claims.Issue 3: Tribunal's decision based on a different case:The Tribunal set aside the First Appellate Authority's order based on a different case, which the Revenue argued was not applicable to the current scenario. The High Court agreed with the Revenue's submission, leading to the setting aside of the Tribunal's order.Issue 4: Lack of consideration for the industry category under Section 80IA:The judgment highlighted that the First Appellate Authority and the Tribunal did not consider the categorization of the appellant's industry under Section 80IA, which was crucial for determining the eligibility for the deduction. The Court remanded the issue back to the Tribunal for a detailed consideration based on the industry categorization specified in the Act.In conclusion, the High Court allowed the appeals without delving into the merits of the issues, emphasizing the need for a more thorough examination of the facts. The Court set aside the Tribunal's order and remanded the issue for a comprehensive determination based on the categorization of the appellant's industry under Section 80IA of the Income Tax Act. No costs were awarded in this judgment.