TMI Blog2018 (10) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... JAY KUMAR MITTAL AND MR AVNEESH JHINGAN, JJ. For The Appellant : Mr. Amrinder Singh, Advocate For The Respondent : Mr. Z.S. Klar, Sr. Standing Counsel ORDER Ajay Kumar Mittal,J. 1. The appellant-assessee has filed the present appeal under Section 260A of the Income Tax Act, 1961 (in short, the Act ) against the order dated 8.12.2016, Annexure A.4, passed by the Income Tax Appellate Tribunal, Chandigarh Bench, A (in short, the Tribunal ) in ITA No.981/CHD/2016, for the assessment year 2013-14, claiming following substantial questions of law:- i) Whether in the facts and in the circumstances of the case, the Hon ble Tribunal was justified dismissing the appeal of the Appellant without giving an opportunity of being heard? ii) Whether in the facts and in the circumstances of the case, the Hon ble Tribunal was justified in dismissing the appeal following the decision in the case of Hycron Electronics Vs. Income Tax Officer, Ward-2, Baddi [2015] 41 ITR (T) 486 (Chandigarh-Trib.) instead of referring the matter to a larger bench in view of the contrary view taken in an earlier decision in the case of Tirupati LPG Industries Limited, Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led an appeal before the Tribunal. Vide order dated 08.12.2016, Annexure-4, the Tribunal dismissed the appeal, relying upon the decision in the case of Hycron Electronics Vs. Income Tax Officer, Ward 2, Baddi [2015] 41 ITR (T) 486. Hence the instant appeal by the appellant-assessee. 3. We have heard learned counsel for the parties. 4. Learned counsel for the appellant-assessee inter alia contended that there is a conceptual difference between the scope of initial assessment year as defined in Section 80IB and Section 80IC of the Act. Section 80IB of the Act provides primarily for commencement of production/commercial activities. There is no concept of substantial expansion in the said section. However, in Section 80IC of the Act, the definition of initial assessment year is specifically provided which can either be on setting up or on undertaking substantial expansion. Therefore, a combined reading of Section 80IC(8)(v) and 80IC(8)(ix) makes it clear that there is no restriction on more than one initial assessment year. 5. On the other hand learned counsel for the respondent-revenue supported the impugned order passed by the Tribunal and relied upon the pronouncement o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profits at the rate of 100% under Section 80IC of the Act and if so then for what period. The answer was given in the affirmative. It was held as under: ( a) Such of those undertakings or enterprises which were established, became operational and functional prior to 07.01.2003 and have undertaken substantial expansion between 07.01.2003 upto 01.04.2012, should be entitled to benefit of Section 80-IC of the Act, for the period for which they were not entitled to the benefit of deduction under Section 80-IB. ( b) Such of those units which have commenced production after 07.01.2003 and carried out substantial expansion prior to 01.04.2012, would also be entitled to benefit of deduction at different rates of percentage stipulated under Section 80-IC. ( c) Substantial expansion cannot be confined to one expansion. As long as requirement of Section 80- IC(8)(ix) is met, there can be number of multiple substantial expansions. ( d) Correspondingly, there can be more than one initial Assessment Years. ( e) Within the window period of 07.01.2003 to 01.04.2012, an undertaking or an enterprise can be entitled to deduction @ 100% for a period of more than fiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates if substantial expansion was carried out. The deduction was available @ 100% for ten Assessment Years for the units located in North-Eastern and in the State of Sikkim and for the units located in Himachal Pradesh, the deduction was available @ 100% for five years and @ 25% for next five years. 19. In the instant case, we are concerned with the assessees who had established their undertakings in the State of Himachal Pradesh. Sub-section (3), as noted above, mentions the period of 10 years commencing with the initial Assessment Year. Sub- section (6) puts a cap of 10 years, which is the maximum period for which the deduction can be allowed to any undertaking or enterprise under this section, starting from the initial Assessment Year. Another significant feature under sub-section (3) is that the deduction allowable is 100% of such profits and gains from an undertaking or an enterprise for five Assessment Years commencing with the initial Assessment Year and thereafter the deduction is allowable at 25% (or 30% where the assessee is a company) of the profits and gains. Cumulative reading of these provisions brings out the following aspects: ( a) Those undertakings or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... astructure development etc. Even this availment started at a time when Section 80-IC was not even on the statute book. As mentioned above, Section 80-IC was inserted by the Finance Act, 2003 with effect from April 01, 2004. The assessees in those cases had started claiming and were allowed deductions from the Assessment Years 1998-99 and 1999- 2000 under Section 80-IA and from the Assessment Year 2000-01 to Assessment Year 2005-06 under Section 80-IB of the Act. The deduction was, thus, claimed by the assessees in those appeals under the new provision i.e. Section 80-IC on fulfilling conditions contained in sub-section (2) of Section 80-IC for the first time for the Assessment Year 2006-07. Thus, insofar as those cases are concerned, the initial Assessment Year under Section 80-IC started only from the Assessment Year 2006-07. In contrast, position here is altogether different. These assessees have availed deduction under Section 80-IC alone. Initially, they claimed the deduction on the ground that they had set up their units in the State of Himachal Pradesh and after availing the deduction @ 100% they want continuation of this rate of 100% for the next 5 years also und ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
