TMI Blog2021 (11) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... Addl. CIT ORDER PER VIKAS AWASTHY , JM This appeal has been filed by the Assessee against the order of Commissioner of Income Tax (Appeals), Panchkula (hereinafter referred to as 'the CIT(A)') dt. 14/10/2015 for the A.Y. 2012-13. 2. The appeal is time barred by 879 days. The assessee has filed an application seeking condonation of delay supported by an affidavit. Shri Ashok Khanna, representing the Department opposed the application for condonation of delay. A perusal of aforesaid application reveals that the delay in filing of the appeal is attributed to inadvertent oversight by Shri Gajendra Arya, Accountant of the assessee. Ostensibly, the assessee had deputed Shri Gajendra Arya to contact the Chartered Accountant to get the appeal drafted. After drafting the grounds of appeal and Form No. 36, the Chartered Accountant handed over the documents for signature and filing to Sh. Gajendra Arya. The Accountant placed the aforesaid documents in another file and forgot to get signature of the assessee on the same. It was only when the appeal for subsequent years was decided by the CIT(A) it transpired that the appeal against the order of CIT(A) for A.Y. 2012-13 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made claim of deduction under section 80IC @ 100% in respect of substantial expansion made during the period relevant to the A.Y. 2010-11. Aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) placing reliance on the decision rendered in the case of Hycron Electronics Vs. ITO in ITA No. 798/Chd/2012 dismissed the appeal of assessee. Hence, the present appeal before the Tribunal. The Ld. AR submitted that the case of the assessee is squarely covered by the decision of Hon'ble Supreme Court of India in the case of Pr. CIT Vs. Aarham Softronics reported as 419 ITR 623. The Hon'ble Apex Court has held that the assessee would be entitled for deduction under section 80IC @ 100% even if substantial expansion has been undertaken in the year after first five years of claim of 100% deduction. 5. Per contra Shri Ashok Khanna representing the Department vehemently defended the impugned order and prayed for dismissing appeal by the assessee. The ld. DR submitted that the assessee has already availed deduction under section 80IC of the Act, at 100% for initial five Assessment Years as per the provisions of the section. After initial five asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unit? The Hon'ble Court after examining the facts and provisions of the Act held as under: 14. In the aforesaid conspectus, the focus has to be on the question as to whether definition of 'initial assessment year' contained in clause (v) of sub-section (8) of Section 80-IC makes any difference? We would like to reproduce the said definition once again, hereunder, for the purpose of continuity of thought process. S. 80-IC : xxx xxx xxx (8) xxx xxx xxx (v)--Initial assessment year means the assessment year II relevant to the previous year in which the undertaking or the enterprise begins to manufacture or produce articles or things, or commences operation or completes substantial expansion. 15. On the basis of this definition, counsel for the assessees before us have argued that there can be more than one 'initial assessment year' which can be triggered by the contingency provided therein. 16. As per this definition, there can be 'initial assessment year', relevant to previous year, in any of the following contingencies: (i) The previous year in which the undertaking or the enterprise begins to manufacture or produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (6) and sub-section (8)(v) and (ix). Clause (ii) of sub-section (2) provides that in case an undertaking or enterprise sets up a unit of the nature specified therein in the State of Himachal Pradesh or the State of Uttaranchal between the 7th January, 2003 and 1st April, 2015, such an undertaking or enterprise shall become eligible for the deductions from such profits and gains, as specified in sub-section (3). In respect of State of Himachal Pradesh (in respect of which these cases pertain to) sub-section (3) enumerates the extent of deduction. It is 100% of profits and gains for first five initial assessment years commencing with the initial assessment year and thereafter 25% (or 30% where the assessee is a company) of the profits and gains. The deduction @ 25% for the next five years in on the assumption that the new unit remains static insofar as expansion thereof is concerned. However, the moment substantial expansion takes place, another 'initial assessment year' gets triggered. This new event entitles that unit to start getting deduction @ 100% of the profits and gains. At the same time, new period of 10 years does not start. It is because of the reason that tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t allowed to even those units who had availed this deduction on setting up of a new unit and have now invested huge amount with substantial expansion of those units. We would like to reproduce following discussions from the Constitution Bench judgment in Commissioner of Customs (Import), Mumbai vs. Dilip Kumar and Company and Others: 20. It is well accepted that a statute must be construed according to the intention of the legislature and the courts should act upon the true intention of the legislation while applying law and while interpreting law. If a statutory provision is open to more than one meaning, the Court has to choose the interpretation which represents the intention of the legislature. In this connection, the following observations made by this Court in District Mining Officer v. TISCO [District Mining Officer v. TISCO, (2001) 7 SCC 358], may be noticed: (SCC pp. 382-83, para 18) 18. ... A statute is an edict of the legislature and in construing a statute, it is necessary, to seek the intention of its maker. A statute has to be construed according to the intent of them that make it and the duty of the court is to act upon the true intention of the legislatu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se provided, the same word must normally be construed throughout the Act in the same sense, and in the case of old statutes regard must be had to its contemporary meaning if there has been no change with the passage of time. That strict interpretation does not encompass strict literalism into its fold. It may be relevant to note that simply juxtaposing strict interpretation with literal rule would result in ignoring an important aspect that is apparent legislative intent . We are alive to the fact that there may be overlapping in some cases between the aforesaid two rules. With certainty, we can observe that, strict interpretation does not encompass such literalism, which lead to absurdity and go against the legislative intent. As noted above, if literalism is at the far end of the spectrum, wherein it accepts no implications or inferences, then strict interpretation can be implied to accept some form of essential inferences which literal rule may not accept. 29. We are not suggesting that literal rule dehors the strict interpretation nor one should ignore to ascertain the interplay between strict interpretation and literal interpretation . We may reiterate a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of law the case might otherwise appear to be. In other words, if there be admissible in any statute, what is called an equitable construction, certainly, such a construction is not admissible in a taxing statute where you can simply adhere to the words of the statute.' Viscount Simon quoted [Ed.: Canadian Eagle Oil Co. Ltd. v. Selection Trust Ltd., 1946 AC 119 at p. 140 (HL)] with approval a passage [Cape Brandy Syndicate v. IRC, (1921) 1 KB 64] from Rowlatt, J. expressing the principle in the following words: (Cape Brandy case [Cape Brandy Syndicate v. IRC, (1921) 1 KB 64], KB p. 71) '... in a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.' 21. The High Court has interpreted these provisions in the following manner: 80-IC(3)(ii) [for Himachal Pradesh] stipulates that deduction shall be @ 100% for five years commencing with initial assessment year and thereafter @ 25%. Initial assessment year , as per Section 80-IC (8)(v) means, y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the rate of 100% of the profits and gains for five assessment years commencing with the 'initial assessment year'. For the next five years, the admissible deduction would be 25% (or 30% where the assessee is a company) of the profits and gains. (c) However, in case substantial expansion is carried out as defined in clause (ix) of sub-section (8) of Section 80-IC by such an undertaking or enterprise, within the aforesaid period of 10 years, the said previous year in which the substantial expansion is undertaken would become 'initial assessment year', and from that assessment year the assessee shall been entitled to 100% deductions of the profits and gains. (d) Such deduction, however, would be for a total period of 10 years, as provided in sub-section (6). For example, if the expansion is carried out immediately, on the completion of first five years, the assessee would be entitled to 100% deduction again for the next five years. On the other hand, if substantial expansion is undertaken, say, in 8th year by an assessee such an assessee would be entitled to 100% deduction for the first five years, deduction @ 25% of the profits and gains for the next two ..... X X X X Extracts X X X X X X X X Extracts X X X X
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