TMI Blog2024 (1) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... aw. As the respondent/assessee was being allowed deduction under Section 80IA of the Act since AY 2007-08, but revenue took a U-turn by denying the benefit in AY 2010-11, that too invoking jurisdiction under Section 263 of the Act, which cannot be justified. No material was brought on record by the appellant/revenue to show that merely by migration from IP-VPN to NLD-ILD license, a new and different undertaking of the respondent/assessee within the meaning of Section 80IA(4)(ii) of the Act came into existence. As held by this court in the case of PCIT vs Verizone Communications India Pvt. Ltd [ 2023 (12) TMI 347 - DELHI HIGH COURT ] mere addition of services or expansion of the same undertaking would not take it out of the realm of Section 80IA(4)(ii) of the Act. Although PCIT did carry out an inquiry, but did not arrive at any finding challenging the sustainability of the view of the Assessing Officer. According to the settled legal position as quoted above through various judicial precedents, merely because PCIT holds a view different from that of the Assessing Officer, the jurisdiction under Section 263 of the Act cannot be invoked to substitute the view of the latter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2010-11 under Section 92CA(3) of the Act and consequently a draft order proposing an addition of the said amount was issued under Section 92CA(4) of the Act against which the respondent/assessee raised objections before the Dispute Resolution Panel (DRP). 2.3 On 14.11.2014, the DRP decided the objections of the respondent/assessee, directing the TPO to determine the Arm s Length Price, so on 30.12.2014, the TPO furnished revised working of the adjustment to the tune of Rs.6,45,87,22,468/-. On 31.12.2014, the Assessing Officer passed order under Section 143(3) read with Section 144C(13) of the Act, thereby assessing the income of the respondent/ assessee as Rs.6,51,45,21,530/- by way of addition of Rs.6,45,87,22,468/- on account of adjustment to the Arm s Length Price and deduction of Rs.20,01,05,275/- under Section 80IA of the Act. 2.4 Thereafter, the Principal Commissioner Income Tax (PCIT) invoked the revisional jurisdiction under Section 263 of the Act and issued show cause notice dated 15.03.2017 to the respondent/assessee. In the order dated 30.03.2017 passed under Section 263 of the Act, the PCIT took a view that the respondent/assessee was not eligible to any ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding to Mr Chopra, the respondent/assessee s business will fall under the ambit of broadband network and internet services, which is one of the eligible undertakings referred to in the said provision. It appears that instead of referring to Clause (ii), the PCIT has referred to Clause (i) of subsection (4) of Section 80IA of the Act. 10. The second aspect which the PCIT has adverted has to do with the date from which the deduction claimed by the respondent/assessee under Section 80IA of the Act would kick in. 11. According to the PCIT, the deduction under 80IA of the Act is available to the respondent/assessee for any ten (10) consecutive AYs out of fifteen (15) years beginning with the year in with the respondent/assessee commence its business. 11.1 Mr Chopra however contends that the correct date would be the date when the respondent/assessee claims the deduction. In other words, what needs to be determined is, which is the initial AY. 11.1 In support of this plea, Mr Chopra placed reliance on the Circular No.1 of 2016 dated 15.02.2016. 12. Prima facie, we are of the view that the PCIT should not have in the fourth year taken a view that the respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rroneous order prejudicial to the interest of the revenue, unless the view taken by the Income Tax Officer is not sustainable in law. 5.2 In the case of Commissioner of Income Tax, Gujarat II vs Kwality Steel Suppliers Complex, (2017) 14 SCC 548 , while dealing with Section 263 of the Act, the Supreme Court held thus: 7. This provision has come for interpretation time and again before this Court. Such a power given to the Commissioner to revise the order of the assessing officer is held to be constitutionally valid having regard to the fact that the Department has no right of appeal to the CIT (A) against any order passed by the assessing officer. It is for this reason, Section 263 is enacted to empower the Commissioner with the authority of revising the order of the assessing officer, where the order is erroneous and the error has resulted in prejudice to the interests of the Revenue. As is clear from the language of the provision, there has to be a proper application of mind by the Commissioner to come to a firm conclusion that the order of the assessing officer is erroneous and prejudicial to the interests of the Revenue. Thus, two conditions need to be satisfied for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar used in Section 80IA(5) of the Act means the first year opted by the assessee for claiming deduction under Section 80IA of the Act in the manner that total number of years for claiming deduction should not transgress the prescribed slab of 15 or 20 years, as the case may be and the period of claim should be availed in continuity. In the present case, as mentioned above, the respondent/assessee was being allowed deduction under Section 80IA of the Act since AY 2007-08, but the appellant/assessee took a U-turn by denying the benefit in AY 2010-11, that too invoking jurisdiction under Section 263 of the Act, which cannot be justified. 7. We have also examined the factual matrix relevant for present purposes. The respondent/assessee since the year 2003 was dealing in Internet Protocol-Virtual Private Network (IP-VPN) services license and in the year 2006, the Department of Telecommunication (DoT) granted National Long Distance-International Long Distance (NLD-ILD) license. As reflected from DoT Communication dated 23.12.2005, the respondent/assessee (formerly named M/s i2i Enterprises Pvt. Ltd) was allowed to migrate from IP-VPN services to NLD-ILD license, with the clear stipul ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
