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2010 (4) TMI 832 - HC - Income Tax


Issues:
Challenge to notice under section 263 of the Income-tax Act, 1961 for assessment year 1994-95. Determination of whether the petitioner-assessee qualifies as a small scale industrial undertaking for relief under section 80-I of the Act.

Analysis:
The petition challenges a notice issued under section 263 of the Income-tax Act, 1961 for the assessment year 1994-95. The respondent, the Commissioner of Income-tax-V, Ahmedabad, contends that the assessment completed by the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. The controversy revolves around whether the petitioner-assessee qualifies as a small scale industrial undertaking for relief under section 80-I of the Act. It is acknowledged that no such requirement is prescribed for relief under section 80HH of the Act.

To determine if a unit qualifies as a small scale industrial undertaking, Explanation 3 under sub-section (2) of section 80-I of the Act refers to clause (b) of the Explanation under sub-section (8) of section 80HHA. This provision states that an industrial undertaking is deemed to be a small scale industrial undertaking if it is regarded as such under section 11B of the Industries (Development and Regulation) Act, 1951. The definition of a small scale industrial undertaking under section 3(j) of the IDR Act is based on compliance with the requirements specified in section 11B, as determined by the Central Government.

The impugned notice under section 263 of the Act appears to lack jurisdiction as the Assessing Officer relied on a certificate from the Department of Industries, Government of Andhra Pradesh, stating that the assessee's unit holds a permanent registration certificate as a small scale industrial undertaking under section 11B of the IDR Act. The impact of section 80-I(5) of the Act on the case also needs consideration. The court has scheduled a returnable date for further proceedings and allowed the interim relief to continue.

This judgment delves into the legal intricacies surrounding the assessment of small scale industrial undertakings for tax relief under the Income-tax Act, emphasizing compliance with the provisions of the Industries (Development and Regulation) Act, 1951. The court's analysis focuses on the jurisdictional validity of the notice issued under section 263 and the interpretation of relevant statutory provisions to determine the eligibility of the petitioner-assessee for tax benefits under section 80-I of the Act.

 

 

 

 

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