TMI Blog2012 (4) TMI 331X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, no undertaking could take advantage or benefit of Section 80 IA(4)(iii) of the Act - WRIT PETITiON (CIVIL) NOS. 13825/2009 and 7699/2010 - - - Dated:- 24-1-2012 - SANJIV KHANNA AND R.V. EASWAR, JJ. JUDGMENT Sanjiv Khanna, J. The petitioner- Regency Soraj Infrastructures is a joint venture between M/s Flower Valley Properties and Buildcon and M/s L.K. Corporation. Pursuant to permission granted by the District Industrial Centre vide letter dated 3rd January, 2005 and the commencement certificate dated 7th January, 2005 issued by the Pune Municipal Corporation, they have constructed Information Technology Park named Metropolitant in Shivaji Nagar, Pune-Mumbai Road. 2. On 23rd September, 2006, they filed an application with the Ministry of Commerce and Industries for registration of the industrial park under the Industrial Park Scheme, 2002 (2002, Scheme, for short) to avail of benefits/exemption under Section 80IA of the Income Tax Act, 1961 (Act, for short). Thereafter, some correspondence was exchanged and information/details were furnished. The petitioner was required and furnished vide letter dated 29th August, 2007 first and final completion certifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order dated 8th October, 2009. It is submitted that the petitioner is entitled to registration under the 2002, Scheme and, therefore, eligible for exemption under Section 80 IA of the Act. In Writ Petition (Civil) No. 7699/2010, the petitioner has also challenged the assessment order dated 22nd October, 2010 passed by Income Tax Officer, Pune denying exemption under Section 80 IA(4)(iii). 6. In brief the contentions raised by the petitioner are as under: (1) On reading of Section 80 IA(4)(iii) read with the proviso, the 2002, Scheme is applicable. (2) The 2008, Scheme was introduced and implemented with effect from 1st January, 2008 and being delegated legislation cannot be given retrospective effect. Section 80 IA does not permit retrospective delegated legislation. (3) There is conflict between Section 80 IA(4)(iii) read with proviso, by which the date was extended upto 31st March, 2009; and the 2008, Scheme as the said scheme postulates that it would be applicable to all industrial parks set up with effect from the date of commencement as defined in clause 2(f) i.e. the date when the completion certificate was issued. The mandate of the Act prevails. (4) Prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d deduction. Clause (iii) stipulates that the undertaking which develops; develops and operates; or maintains and operates an industrial park or special economic zone qualifies for the said deduction provided it is notified by the Central Government in accordance with the scheme framed and notified by the Central Government for the period beginning 1st April, 1997 and ending on 31st March, 2006. For the sake of completeness, we may record that the date 31st March, 2006 was substituted for the date 31st March, 2002 by Finance Act, 2001 with effect from 1st April, 2001. 9. The second proviso to the clause (iii) was incorporated/introduced by Finance Act, 2006 with effect from 1st April, 2007 and the said proviso at the time when it was introduced was as under: "Provided further that in the case of any undertaking which develops, develops and operates or maintains and operates an industrial park, the provisions of this clause shall have effect as if for the figures, letters and words "31st day of March, 2006", the figures, letters and words "31st day of March, 2009" had been substituted " 10. We may note here that the words "31st Day of March, 2009" were substituted with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Gazette of India Extraordinary and is dated 8th January, 2008. By another Gazette Notification also dated 8th January, 2008, CBDT substituted the existing Rule 18C of the Income Tax Rules, 1962, (1962, Rules) by a new Rule in exercise of powers under Section 295 read with Section 80 IA(4)(iii) of the Act. The new Rule 18C reads as under: "18C.(1) The undertaking shall begin to develop, develop and operate or maintain and operate an industrial park any time during the period beginning on the 1st day of April, 2006, and ending on the 31st day of March, 2009. (2) The undertaking and the Industrial Park shall be notified by the Central Government under the Industrial Park Scheme, 2008. (3) The undertaking shall continue to fulfil the conditions envisaged in the Industrial Park Scheme, 2008." 14. The 2008, Scheme was formulated by the Ministry of Finance, Department of Revenue, CBDT. The relevant clauses of the said scheme, read as under: "1. Short title, commencement and application.- ** ** ** (2) It shall come into force on the date of its publication in the Official Gazette. 2. Definitions.- ** ** ** ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an application to the Central Government for being notified under clause (iii) to Section 80 IA(4) on 23rd September, 2006. On the said date, the 2002, Scheme was not in operation and was not applicable. As noticed above, the 2002, Scheme as notified and published in the Gazette in Clause (3) stipulates that it shall apply to any undertaking which develops; develops and operates; or maintains and operates; an industrial park for the period beginning on 1st April, 1997 and ending on 31st March, 2006. Clause 9(1) of the 2002, Scheme quoted above does show that an application/approval could be granted in advance also but the tax benefits under the Act could be availed of only after the number of units indicated in the application were located in the industrial park. In the present case, we are not concerned with clause 9(1) of the 2002, Scheme, as the petitioner had filed an application on 23rd September, 2006, i.e., after 31st March, 2006. Clause 9(1), therefore, does not help the petitioner. Entitlement to deduction under Section 80 IA read with 2002, Scheme predicates location of specified number of units indicated in the application in the industrial park. In case there was delay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1st March, 2006 and not thereafter. After 31st March, 2006 there was no scheme which was in operation. The requirement of Section 80 IA(4)(iii) is that a scheme should be framed and gazetted and then only benefit can be claimed by an industrial undertaking which gets notified under the scheme. If there was no scheme in operation as the scheme had not been framed or gazetted, no benefit can be availed of by an undertaking on the basis of a prior scheme, the term and validity of which had come to an end by efflux of time. We may add a caveat, that we are not examining a case where an undertaking had filed an application on or before 31st March, 2006 but the same was disposed of after 31st March, 2006. This factum is extremely relevant and has been noticed below to distinguish the judgment of the Bombay High Court in Silver Land Developers (P.) Limited v. Empowered Committee [2011] 16 taxmann.com 41. 20. Thus, for some time after 1st April, 2006, there was no scheme which was framed and had been gazetted. A new scheme was framed and gazetted only on 8th January, 2008 and this scheme has been implemented with effect from 1st April, 2006. The Central Government can be criticised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on 2nd June, 2007 by the Municipal Corporation of Greater Mumbai. The said Municipal Corporation had clarified and informed the Empowered Committee that the industrial park was ready and fit for occupation on 8th March, 2007. In these circumstances, the Division Bench of the Bombay High Court has held that the 2002, Scheme was applicable and the finding of the Empowered Committee that the 2008, Scheme was applicable should be rejected. In paragraph 18 of the said judgment, it has been observed by the Bombay High Court as under:- "18. The rival submissions now fall for determination. The object and purpose of Section 80IA is to grant a deduction, while computing the total income of the assessee of an amount equal to hundred per cent of the profits and gains derived from an eligible business for ten consecutive assessment years out of fifteen years beginning from the year in which inter alia the assessee develops an industrial park or facility. The eligible businesses to which the provisions are attracted are specified in sub-section (4) of Section 80IA. The object and purpose of Section 80IA was to provide an impetus to the growth of infrastructure in the country. Clause (iii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cutoff then it is unlikely that the last sentence of Para 9(1) would provide that the condition which was spelt out in the said Para would also apply to existing approvals. Consequently Para 9 of the Scheme did contemplate situations where the commencement of an industrial park was delayed by more than one year from the date indicated in the application. The Scheme provides that in such cases, a fresh approval would have to be obtained in order to obtain the benefits under the Act." 22. The aforesaid observations are in consonance with our findings and interpretation given to Section 80 IA(4)(iii), 2002, Scheme and 2008, Scheme. 23. Learned counsel for the petitioner had drawn our attention to paragraph 24 of the said judgment which reads as under:- "24. The attention of the Court has also been drawn to the fact that in fifty cases, approvals have been granted under the Scheme of 2002 beyond 31 March 2006 and as a matter of fact as late as in April 2007. Learned Counsel on behalf of the Revenue has submitted that the Department would seek to revoke those permissions which have been granted in other cases. Be that as it may, for the reasons indicated earlier we have come ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 2002, Scheme came to an end. It was submitted on behalf of the petitioner that the doctrine of promissory estoppel should be applied on the basis of correspondence which was exchanged between the petitioner and the Ministry of Commerce and Industries after the application for approval was filed on 23rd September, 2006. By this correspondence, the said Ministry had called for certain details and information which was furnished and given. We do not think doctrine of promissory estoppel can be applied on the basis of the said letters. No promise was held out in the said letters. Information and details were called for and it was stated that the matter would be placed before the Empowered Committee after full details were furnished. No promise is decipherable. The respondent had not held out or promised that the 2002, Scheme shall be extended. The aforesaid correspondence does not make out a case and does not show that any promise was held out and pursuant to the said promise the petitioner had changed their position. As noticed above, the 2008, Scheme was notified on 8th January, 2008 and during the period 1st April, 2006 till 8th January, 2008 no scheme was in operation as the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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