2025 (11) TMI 47

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.... 2. ITA No.72/2020 and ITA No. 37/2020 were ordered to be admitted on 20.11.2020 and 07.10.2020 respectively, on the following common substantial questions of law: 1. Whether on the facts and in the circumstances of the case and in law, the Tribunal is right in dismissing the Miscellaneous Petition filed by the Revenue without adjudicating upon the issue of the correctness of the deduction determined by the assessing officer under Section 80JJA vis-à-vis the deduction claimed under Section 80JJA by the assessee? 2. Whether on the facts and in the circumstances of the case, the order passed by the Tribunal is perverse in nature as the Tribunal has not considered grounds urged in miscellaneous petition, even when there is mistake apparent on record, which attracts Section 254 of the Act? 3. The facts in issue in both the appeals are that: The assessee is an individual deriving income under the head 'business' and engaged in the business of manufacturing of rice as well as receiving milling charges of paddy and he is also a trader in seeds, fertilizers, pesticides and sugar etc. He is also engaged in the business of manufacturing of bio-fertilizers and ....

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....Miscellaneous petition before the learned Tribunal. Hence, the Revenue filed Miscellaneous Petition Nos.265 and 266/Bang/2013 before the Income Tax Appellate Tribunal, Bengaluru, in turn, the Tribunal dismissed the Misc. Petitions filed by the Revenue. 7. Being aggrieved by the order passed by the Tribunal, the Revenue preferred these appeals. 8. The learned counsel Sri Sushal Tiwari, for the appellants/Revenue vehemently contended that, the Tribunal committed an error in dismissing Misc. Petitions filed by the Revenue without adjudicating the issue of correctness of the deduction determined by the Assessing Officer under Section 80JJA of the Act, vis-à-vis, the deduction claimed under Section 80JJA of the Act by the Assessee even when the issue raised by the Revenue in Miscellaneous petitions were not dealt by the Tribunal in the proper perspective. The order passed by the Tribunal is perverse in nature, as the Tribunal has not considered the grounds urged in the Misc. Petitions, even when there is mistake apparent on face of the record, which attracts the provisions of Section 254 of the Act. Hence, learned counsel prayed to allow the appeals. 9. The learned couns....

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....ss must be included in the assessee's gross total income. b. Waste utilisation -The deduction applies to profits from the collection and processing of bio-degradable waste. c. Purpose -The waste must be used for a qualifying purpose, such as, generating energy and creating organic fertilizers. 14. In the instant cases, the Assessing Officer disallowed the claim for deduction under Section 80JJA of the Act in respect of bio-fuel pellets. Hence, it is just and necessary to analyse the meaning of bio-fuel pellets. 15. Bio-fuel pellets are dense, uniformally sized, cylindrical fuel pellets made from compressed organic materials like wood waste, agricultural residue and other bio-mass. These small, hard pellets serve as a sustainable and renewable alternative to fossil fuels, used for generating heat in residential and industrial applications like stoves, furnaces and boilers. 16. Section 80JJA of the Income Tax Act, 1961 is a provision that allows deduction of profits and gains derived from the business of collecting and processing of bio- degradable waste for the generation of power, producing bio- fertilizers and bio-pesticides, generating bio-gas, making p....

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....y and proof of income earned through such activity. 7. Extension for assessment years: The assessee can claim the 80JJA deduction only for a period of five consecutive years. This tax deduction cannot be extended or carried forward for further assessment years. 8. Necessary documents and evidence to be furnished: As mentioned in point number six above, the tax deduction benefit is only eligible for specific business activities. Therefore, the business is mandated to furnish necessary documents and provide evidence about the eligible business activities. The business also needs to show proof of expenses incurred on eligible business activities for which the profit was earned. 18. Section 80JJA is a hallmark provision that aims to support the effective utilisation of biodegradable waste in India. It does this by incentivising businesses with tax deductions equal to the eligible business income or value up to Rs.5.00 lakhs. Thus, Section 80JJA serves the goal of building an ecologically sustainable future. ANALYSIS: 19. We have perused the appeal memos and the impugned order. The only contention raised by the Revenue in these appeals as well as in the miscel....