TMI Blog2017 (8) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... RT). 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years including initial assessment year. Sub-section (9) of section 80IB in its original format, was substituted by the Finance (No.2) Act of 2009 w.e.f. 01.04.2000. The effect of the substituted sub section (9) on the question of deduction where the assessment years involve the periods prior to the date of amendment, came up for consideration before the Division Bench of this Court in case of Niko Resources Ltd. vs. Union of India and anr reported in 374 ITR 369 . The case of the petitioners-assessees before the High Court was that some of the changes in the new sub section (9) were clarificatory in nature and in any case, would not disturb the rights of the assessees concerning the period prior to the introduction of the amendment. The Division Bench allowed the writ petition and granted certain reliefs to the petitioners. We would advert to this decision of the High Court at some length later. 4. Against the judgement of the High Court in case of Niko Resources Ltd. (supra) , the department has filed Special Leave Petition before the Supreme Court which has been granted and appeal is admitted. On 20.11.2015, the Supreme Court passed the following interim order: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of Hon'ble Supreme Court as mentioned above, the Hon'ble Gujarat High Court vide order dated 03.10.2016 in Tax Appeals No. 781, 1240, 1246, 1247, 1248, 1249 and 1859 of 2008 in DIT (International Taxation) vs. Niko Resources Ltd. where identical issue is involved, has adjourned the matter sine die ( copy enclosed). I shall be obliged. 6. On this application, the Tribunal passed the impugned order. The Tribunal decided to adjourn all the appeals sine die to be taken up after the adjudication of the pending appeals before the Supreme Court. The Tribunal was of the opinion that the assessee was relying on the judgement of the Tribunal which was carried in appeal before the High Court and the High Court had adjourned the hearing of the appeals sine die because of the said interim order of the Supreme Court. In the present case, if the Tribunal proceeded further, it would lead to further litigation at the instance of either party. This would merely shift the litigation from Tribunal to High Court. Primarily on such grounds, the Tribunal granted the request of the Revenue and, as noted earlier, adjourned the hearing of the appeals sine die . 7. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to its substitution by the Finance (No.2) Act of 2009 sub-section (9) of section 80IB granted deduction to an undertaking which begins commercial production or refining of mineral oil by hundred per cent of the profit for a period of seven consecutive assessment years including the initial assessment year. This was subject to certain conditions to be fulfilled as laid down in the further proviso. This sub-section (9) of section 80IB was substituted by Finance (No. 2) Act of 2009 but w.e.f. 01.04.2000. While retaining the benefit of hundred percent deduction on the profit of an undertaking for seven consecutive assessment years including the initial year certain significant changes were made. The conditions to be fulfilled by such eligible undertaking were laid down in clauses (i) to (v). Clause (iv) thereof which was not there in the original sub-section (9) reads as under: [( 9) The amount of deduction to an undertaking shall be hundred per cent of the profits for a period of seven consecutive assessment years, including the initial assessment year, if such undertaking fulfils any of the following, namely:- [( iv) is engaged in commercial production of natural gas in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - IB(9) of the Income Tax Act, 1961, by Finance (No.2) Act, 2009 conferring the benefit of the deduction under this Section to undertakings engaged in commercial production of natural gas in blocks licensed under VIIIth round of bidding provided such commercial production commenced on or after 1.4.2009 results in denial of the benefit of deduction under 80-IB(9) to undertakings engaged in commercial production of natural gas under contracts entered into prior to NELP VIII on an interpretation thereof that the term mineral oil would not include natural gas since the benefit was available only to undertakings engaged in commercial production of mineral oil rendered the newly added sub clause (iv) unconstitutional and ultra vires Article 14 of the Constitution of India? ( iii) Whether the Petitioner has any accrued or vested right? 12. With respect to the first question, the Division Bench held as under: 63. Therefore, for the reasons given above, we are of the considered opinion that the Explanation added to Section 80- IB(9) by amendment is substantive law and could not apply retrospectively. The Explanation added to Section 80-IB(9) breaches the rule of law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 16. Before concluding, we may recall, according to the counsel for the petitioner there were as many as nine appeals out of the said group in which the question of deduction under section 80IB(9) of the Act was not involved at all. In any case, the effect of the judgement of the High Court in case of Niki Resources Ltd would not be felt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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