Tribunal grants deduction under Section 80IA(4)(iii) while dismissing challenge to assessment reopening.

The Tribunal allowed the appeal in part, granting the deduction under Section 80IA(4)(iii) to the assessee and dismissing the grounds related to the legality of the re-opening of the assessment as they were not pressed by the assessee.

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Issues Involved:
1. Legality of re-opening the assessment under Section 147.
2. Denial of the claim of deduction under Section 80IA(4)(iii) of the Income Tax Act, 1961.

Detailed Analysis:

1. Legality of Re-opening the Assessment under Section 147:

The assessee challenged the legality of the re-opening of the assessment under Section 147 of the Income Tax Act, 1961. The assessee argued that there was no failure on its part to disclose any material facts necessary for the assessment. During the original assessment proceedings under Section 143(3), the assessee had provided a detailed explanation regarding the allowability of the deduction claimed under Section 80IA(4)(iii) along with all necessary documents. Therefore, the assessee contended that the re-opening of the assessment was unjustified and void ab initio. The assessee also argued that the Assessing Officer (AO) initiated the re-opening based solely on the observations of the Central Board of Direct Taxes (CBDT) without any independent application of mind, which is not permissible. The assessee further contended that the AO failed to dispose of the objection petition filed by the assessee, rendering the entire order under Section 147/143(3) void.

2. Denial of the Claim of Deduction under Section 80IA(4)(iii):

The primary issue in this appeal was the denial of the assessee’s claim for deduction under Section 80IA(4)(iii) of the Income Tax Act. The assessee relied on the judgment of the Kolkata Tribunal in its own case for the assessment years 2008-09 and 2009-10, where the issue was decided in favor of the assessee. The assessee argued that the Industrial Park, "Salarpuria Softzone," was duly approved by the Empowered Committee, and the necessary conditions for the deduction were met. The assessee provided evidence, including lease agreements and completion certificates, to support its claim that the Industrial Park was operational before the stipulated date. The assessee also cited various judicial precedents, including decisions from the Karnataka High Court and the Bombay High Court, which supported the view that once an Industrial Park is approved by the Ministry of Commerce and Industry, the CBDT must issue the notification, and any delay in issuing the notification should not result in the denial of the deduction.

Tribunal's Findings:

The Tribunal found that the assessee had met all the necessary conditions for claiming the deduction under Section 80IA(4)(iii). The Tribunal referred to its earlier decision in the assessee's own case and various judicial precedents which supported the assessee's claim. The Tribunal noted that the approval from the Ministry of Commerce and Industry was valid and had not been withdrawn. The Tribunal also referred to the CBDT Notification [S.O. 3035(E)] dated 8th September 2020, which justified the assessee’s claim.

The Tribunal concluded that the grounds on which the disallowance of the claim was made were not legally and factually sustainable. Therefore, the Tribunal allowed the assessee's appeal on the issue of the deduction under Section 80IA(4)(iii).

Conclusion:

The Tribunal allowed the appeal in part, granting the deduction under Section 80IA(4)(iii) to the assessee and dismissing the grounds related to the legality of the re-opening of the assessment as they were not pressed by the assessee. The order was pronounced in the open court on 5th March 2021.

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