Court rules against lack of jurisdiction in directing approval withdrawal without hearing, emphasizes rights protection.

The court held that respondent No. 1 lacked jurisdiction to direct respondent No. 2 to withdraw the approval granted under the Industrial Park Scheme, 2002, without providing the petitioner with a hearing. It was found that the action was arbitrary and lacked jurisdiction. The court emphasized that the delay in issuing the occupancy certificate should not affect the petitioner's rights. The court rejected the Revenue's argument regarding the "date of commencement" under the Scheme 2002 and directed respondent No. 1 to notify the petitioner's industrial park in compliance with the Scheme within three months.

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Issues Involved:
1. Jurisdiction and authority of respondent No. 1 to withdraw approval granted by respondent No. 2.
2. Compliance with the conditions of the Industrial Park Scheme, 2002.
3. Interpretation of "date of commencement" under the Industrial Park Scheme, 2002.

Issue-wise Detailed Analysis:

1. Jurisdiction and Authority of Respondent No. 1:
The petitioner contended that respondent No. 1 lacked jurisdiction to direct respondent No. 2 to withdraw the approval granted under the Industrial Park Scheme, 2002, without providing an opportunity of hearing to the petitioner, which violates the principles of natural justice. The court found that the action of respondent No. 1 instructing respondent No. 2 to withdraw the approval was arbitrary and lacked jurisdiction. The court held that respondent No. 1 is empowered to issue the notification under rule 18C of the Income-tax Rules, 1962, in compliance with the approval order of respondent No. 2, not to adjudicate upon it. The language in the official memorandum did not indicate that the instructions were merely recommendatory, and even if they were, no such recommendation was accepted by respondent No. 2.

2. Compliance with the Conditions of the Industrial Park Scheme, 2002:
The petitioner argued that the industrial park commenced operations within the stipulated period, as evidenced by the provisional completion certificate issued by the architect on December 26, 2006, and the application for the occupancy certificate filed on December 29, 2006. The court noted that the quarterly returns submitted before respondent No. 2 disclosed the date of commencement as March 15, 2007, which was within one year from the expected date of commencement mentioned in the approval order. The court emphasized that the delay caused by the authority in issuing the occupancy certificate on June 23, 2007, should not obliterate the petitioner's rights to avail of the benefits under section 80-IA(4) of the Income-tax Act, 1961.

3. Interpretation of "Date of Commencement" under the Industrial Park Scheme, 2002:
The court rejected the Revenue's argument that the "date of commencement" should be linked to the issuance of the occupancy certificate by the competent authority, as there was no such reference in the Scheme 2002. The court held that the definition clause of Scheme 2008 could not be borrowed to deny the benefit of Scheme 2002. The court cited various judgments, including CIT v. Tarnetar Corporation, CIT v. Ceebros Hotels (P.) Ltd., and Pr. CIT v. Ambey Developer P. Ltd., to support the view that substantial compliance with the conditions should be considered, and minor deviations should not vitiate the purpose of the approval.

Conclusion:
The court directed respondent No. 1 to notify the petitioner's industrial park under rule 18C of the Income-tax Rules, 1962, in terms of the Industrial Park Scheme, 2002, within three months from the date of receipt of the certified copy of the order. The writ petition was disposed of accordingly.

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