TaxTMI 
TaxTMI 
2025 (2) TMI 834
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....BBB (4) are fulfilled and that the information sought against serial No. 13 in Form 10CCB is provided? (ii) Whether the Tribunal misdirected itself on facts and in law in adverting to the provisions of sub-sections (8) and (10) of Section 80IA of the Act, which was not the subject matter of the appeal filed by the respondents/revenue?" 2. The principal issue of contestation appears to be with respect to a purported failure on the part of the appellant to have complied with the stipulations prescribed by Rule 18BBB of the Income Tax Rules, 1961 [Rules]. More particularly, the respondents appear to have asserted that there was an evident failure on the part of the appellant to place on the record an agreement or approval that may have been granted to it by either a local or state authority. That prescription appears in Form 10CCB of the Income Tax Act, 1961 [Act]. In order to appreciate the stand which was taken by the respondents, we deem it apposite to extract Rule 18BBB and which reads as follows:- "18BBB. Form of Audit Report for Claiming Deduction under Section 80-I or Section 80IA or Section 80I-B or Section 80-IC (1) The report of the audit of the....
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.... Section and sub-section of the Income-tax Act, 1961, under which deduction is being claimed : ---------------------------- 8. Date of commencement of operation/activity by the undertaking or enterprise : ---------------------------- 9. Initial assessment year from when deduction is being claimed : ---------------------------- 10. Address (with District and State) of the enterprise/ undertaking claiming deduction : ---------------------------- 11. Excise/service tax registration number and office where registered : ---------------------------- 12. Sales-tax registration number and office where registered : ---------------------------- 13. Local/State authorities from whom approval is taken (attach copy of approval) : ---------------------------- ELIGIBLE BUSINESS UNDER SECTION 80-IA 14. Development, operation, maintenance of an infrastructure facility: (a) With respect to the infrastructure facility, does the enterprise (please tick): □Develop □ Operate and maintain, □ Develop, operate and maintain, the infrastructure facility. (b) Please specify the nature of th....
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....p; (ii) book value of plant and machinery as on 1-4-2004 : ---------------------------- (iii) value of increase in the plant and machinery in the year of substantial renovation and modernization : ---------------------------- ELIGIBLE BUSINESS UNDER SECTION 80-IB 18. Industrial undertakings engaged in manufacture or production of article or thing or operation of cold storage plant: (a) Does the industrial undertaking manufacture or produce any article or thing specified in the Eleventh Schedule □ Yes □ No (Please specify the article or thing......) : ---------------------------- (b) If yes, does the manufacturing process use Power □ Yes □ No (c) Number of workers employed in the manufacturing process : ---------------------------- (d) Does the industrial undertaking operate any cold storage plant □ Yes □ No (e) Please specify if the company is a small scale industrial undertaking □ Yes □ No (f) If the industry is located in the North Eastern Region, is the industry a notified industry as per secon....
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....ential unit of the project : ---------------------------- (f) Built-up area of the shops and other commercial establishments situated in the project : ---------------------------- (g) Whether the project is carried out in accordance with a scheme framed by Central/State Government for re-construction/re-development of existing buildings in areas declared to be slum areas under any law in force and notified by the Board. (Please attach a copy of CBDT's notification) □ Yes □ No (h) Please specify the method of accounting adopted : ---------------------------- 24. Other business activities (a) Is the undertaking in the business of setting up and operating a cold chain facility for agricultural produce □ Yes □ No (b) Is the undertaking in the integrated business of handling, storage and transportation of foodgrains □ Yes □ No (c) Is the undertaking in the business of processing, preservation and packaging of fruits or vegetables □ Yes □ No Eligible business under section 80-IC 25. (i) Whether the undertaking or enterprise is l....
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....e of machinery or plant received on transfer : ---------------------------- (e) Total value of machinery or plant used in business : ---------------------------- 27. Total sales of the undertaking : ---------------------------- 28. Transactions by the undertaking to a related concern of the assessee, or another undertaking of the assessee, or the co-owner of the undertaking, or another undertaking of the co-owner : [Related concern is a person within the meaning of section 40A(2)(b)] Name of the Related Concern Transaction (Please specify nature and amount) (a) ------------- -------Rs. ------------------- (b) ------------- -------Rs. ------------------- (c) ------------- -------Rs. ------------------- (d) ------------- -------Rs. ------------------- 29. Profits and gains derived by the Undertaking/enterprise from the Eligible business# 30. Deduction under section 80-I/80-IA/80-IB/80-IC (Strike out whichever is not applicable). : ---------------------------- Declaration *I/We have examined the balance sheet of the above industrial undertaking or enterprise styled** _________________ ....
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....pril 2012. It is pertinent to note that Section 80IC (7) further provides that the stipulations contained in sub-section (5) and sub-sections (7) to (12) of Section 80IA shall, as far as applicable to eligible undertakings, also apply to those which claim benefits under Section 80IC. 6. Section 80IA is a provision which is, in a sense, pari materia to the deductions that may be claimed by an assessee by virtue of establishing an undertaking which is engaged in an "eligible business" and thus entitling the assessee to claim deductions from the profits and gains that may be earned therefrom. The distinction which imbues Section 80IA, however, is of the same not being concerned with the establishment of a unit in an industrial area or an industrial park but pertaining to an enterprise which undertakes a business referred to in sub-section (4) thereof. Eligible businesses are set forth in Section 80IA (4) and are envisaged to be the development, operation and maintenance or development, operation and maintenance of any infrastructural facility. The Explanation to sub-section (4) then proceeds to stipulate activities which would fall within the ambit of an "infrastructural facility".....
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.... highway project including housing or other activities being an integral part of the highway project; (c) a water supply project, water treatment system, irrigation project, sanitation and sewerage system or solid waste management system; (d) a port, airport, inland waterway, inland port or navigational channel in the sea; (ii) any undertaking which has started or starts providing telecommunication services, whether basic or cellular, including radio paging, domestic satellite service, network of trunking, broadband network and internet services on or after the 1st day of April, 1995, but on or before the 31st day of March, 2005. Explanation.-For the purposes of this clause, "domestic satellite" means a satellite owned and operated by an Indian company for providing telecommunication service; (iii) any undertaking which develops, develops and operates or maintains and operates an industrial park or special economic zone notified by the Central Government in accordance with the scheme framed and notified by that Government for the period beginning on the 1st day of April, 1997 and ending on the 31st day of March, 2006: Provided t....
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....ompany is formed before the 30th day of November, 2005 with majority equity participation by public sector companies for the purposes of enforcing the security interest of the lenders to the company owning the power generating plant and such Indian company is notified before the 31st day of December, 2005 by the Central Government for the purposes of this clause; (b) such undertaking begins to generate or transmit or distribute power before the 31st day of March, 2011; (vi) [***]" 7. As would be manifest from a reading of sub-section (4) thereof, the provision applies to any enterprise carrying on business of developing, operating and maintaining any infrastructure facility which fulfils the conditions stipulated therein. It is here, that one finds mention of such an enterprise being required to have entered into an agreement with the Central or State Government, local authority or any other statutory body for the purposes of undertaking the activities which are spoken of in the principal parts of Section 80IA. 8. We had an occasion to view Rule 18BBB in the preceding parts of this decision. As is manifest from a reading of its title, the aforenoted rule spe....
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....pproval or permission, as the case may be, to carry on the activity, signed or issued by the Central Government or the State Government or the local authority for carrying on the eligible business. Evidently, this requirement has not been fulfilled by the assessee. The Revenue before us has taken this ground specifically and also submitted that this issue has not been considered by the Tribunal in assessment year 2009-10. The filing of agreement / approval /permission being one of requirement of the statute and not complied by the assessee cannot be rejected as non-issue. In the facts and circumstances of the case and in the interest of the substantial justice, we feel it appropriate to restore the issue in dispute the file of the Assessing Officer to provide one more opportunity to the assessee to satisfy the requirement of section 80IA (7) of the Act along with Rules thereon. We are aware that activity of the assessee has been held to manufacturing activity in earlier year by the Tribunal but the assessee is required to fulfill the requirement of law in relevant assessment year. We may note that the Hon'ble Supreme Court in the case of Distribution (Baroda) Pvt. Ltd. Vs. Unio....
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....ing a mandatory precondition for claiming benefits, the Tribunal has clearly erred in reading such a requirement in respect of an assessee which may have been claiming benefits under Section 80IC. 16. The Tribunal thereafter has further proceeded to examine the case of the assessee from the stand point of Section 80IA (8) and 80IA (10). This exercise undertaken by it for purposes of discerning abnormal profits and whether the assessee had allegedly shifted profit or expenditure to an eligible business is an issue which was neither canvassed, raised nor urged either before the AO or the CIT (A). It also does not appear to have constituted a ground of appeal that was urged by the Revenue for the consideration of the Tribunal. 17. In our considered opinion, therefore, the following observations which appear in para 4.12 were wholly unwarranted and are liable to be set aside. "4.12 The Ld. CIT (A) in para 5.6.3 of the impugned order has mentioned that the Assessing Officer has not commented in remand report on this issue. The Ld. CIT (A), however, on the basis of the financial statements and discussion with the Authorized Representative of the assessee held that there wa....