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2020 (9) TMI 1132 - HC - Income TaxEntitlement to the benefit of Section 10AA - AO denied the benefit on the ground that the assessee has violated the terms and conditions in the Letter of Approval, which was granted by the Development Commissioner, for manufacture of bangles and pendants - Development Commissioner initiated proceedings under the provisions of the Foreign Trade (Development and Regulations) Act 1992, as the assessee had violated the conditions in the Letter of Approval, which culminated in issuing the order of penalty to them - HELD THAT:- Writ Court has referred to the letter of the Customs Department dated 12.03.2014, addressed to the Assistant Development Commissioner of MEPZ, SEZ, wherein they have clarified that medallions are also pendants. This was also taken note of by the learned Writ Court and quashed the order of penalty imposed by the Development Commissioner under the provisions of the Foreign Trade (Development and Regulations) Act 1992. Thus, the basis or the substratum, based on which the assessment was completed denying the benefit to the assessee, did not no longer survive. What is required to be seen for extending the benefit under Section of the 10AA Act is, to see whether the assessee is an entrepreneur as referred to, defined under Section 2(j) of the Special Economic Zone Act. No doubt, the assessee falls within the said definition, as they had been granted a Letter of Approval by the Development Commissioner under Section 15(9) of the Special Economic Zones Act. That apart, the competent authority who intends to certify as to what would be the date of commencement of production, would be the Development Commissioner and not the Income Tax Officer. Relief granted by the Tribunal by interpreting as to what is the pendant and medallion, cannot be interfered in an appeal filed under Section 260-A of the Act. The argument of Mr.T.R.Senthil Kumar, learned Senior Counsel appearing for the Revenue, that the issue goes to the root of the matter is not acceptable because of the subsequent developments that had taken place in the writ petition filed by the assessee, being allowed by this Court and the order of penalty imposed by the Development Commissioner being set aside. The reason for setting aside the order of penalty imposed on the assessee, is that the assessee has not violated the terms and conditions of the Letter of Approval and that the medallion is also classifiable as a pendant. - Decided against revenue.
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