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2017 (8) TMI 293 - HC - Income TaxDeduction under section 80IB(9) - eligible undertaking - effect of the Explanation contained in sub section (9) of section 80IB - Held that:- Both sides agreed that the applicability of the explanation below sub-section (9) of section 80IB of the Act is not involved in the tax appeals pending before the Tribunal. However, both sides also agreed that the implication of the clause (iv) of sub-section (9) is one of the important issues involved in large number of such appeals. We have, therefore, proceeded on such basis. In that context, if we peruse the interim order of the Supreme Court, it provides that since the Supreme Court is entertaining the matter, the High Court wherever such appeals are pending, would not finalize the same till the matter is dealt with by the Supreme Court. The intention of the Supreme Court is thus, amply clear and it precludes any High Court from deciding the issues which are presented in the appeal against the judgement of the High Court in case of Niko Resources Ltd. (2015 (3) TMI 986 - GUJARAT HIGH COURT). Such issue could be one of implication of the Explanation to subsection (9) of section 80IB or of the interpretation of clause (iv) thereof. In either case, it would not be open for the High Court to proceed further and finalize the issue till the Supreme Court decides the appeal. Effectively therefore, the Supreme Court not only stayed the operation of the judgement of the High Court but has stayed judgement itself. We are conscious that the order of the Supreme Court does not take within its fold any pending appeal before the Tribunal. Strictly speaking therefore counsel for the petitioner may be correct in contending that there is no stay against the Tribunal proceeding further in such tax appeals. However, in the present case, it is not the question of the legality of power on part of the Tribunal, but propriety in proceeding or not proceeding with the appeals. When admittedly one of the issues involved in such tax appeals is of the effect of clause (iv) of newly substituted subsection (9) of section 80IB of the Act and consequently, the ratio laid down by the High Court in case of Niko Resources Ltd. (supra), the Tribunal cannot be faulted for deciding not to proceed further with the bunch of appeals till the Supreme Court finally cleared the issues. We see no impropriety or legal error in the Tribunal choosing this option.
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