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TMI Blog2025 (4) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... ders specified therein:- "(i) the Communication dated 03 February 2014 issued by the Respondent No. 3 rejecting the Petitioner's Application dated 15 December 2011 for seeking amendments of the earlier granted approval dated 17.11.2006. (ii) Order dated 11th November 2014 issued by the Respondent No. 4 Empowered Committee purporting to reject the Petitioner's revision seeking review of the communication/decision dated 3rd February 2014; (iii) The notification was issued by Respondent No. 3 on 26th March 2014, purporting to amend the notification dated 17th November 2006, granting benefits to the Petitioner under the Scheme. (iv) 5 (five) notices issued under Section 148 of the Income Tax Act, 1961 for the assessment years 2007-08 to assessment years, 2007-08 to assessment years 2011-12 and (v) 5 notices issued under Section 143 (2) for the same assessment years, purporting to reopen the concluded assessments in respect of assessment years 2007-08 to 2011-12 for denying benefit to the Petitioner under the Scheme under Section 80IA of the Act, on the grounds which are more particularly specified hereinbelow." 3. However, during arguments, Mr Aman Kacheria, on instruct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Assessment Year 2007-08 to 2011-12, allowing the deductions under Section 80IA of the IT Act as claimed by the Petitioners in their Income Tax returns. The Petitioners have indicated that this was based on the assessing officers being duly satisfied regarding compliance with the conditions outlined in the approvals granted to the Petitioners, particularly the approval published in the gazette on 17 November 2006. 9. On 15 December 2011, the Petitioners applied to the Second Respondent to amend the approvals. The amendment mainly related to the reduction of the Industrial Units from 14 to 6 since, according to the Petitioners, the existing occupiers had merged/amalgamated without materially affecting the employment strength, area, design and layout of the Individual Units. The Petitioners pointed out that such merger/amalgamation by the occupiers were factors beyond the Petitioner's control, and an amendment regarding this condition of having a minimum of 14 units should be permitted to be amended and reduced to a minimum of 6 units to obviate any complications in future. Mr Kacheria submitted that this application was made bona fide after fully disclosing the ground situat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to withdraw the impugned notification dated 26 March 2014. The notification was neither withdrawn nor recommended for withdrawal, but the minutes noted that the decision for retrospective revocation seems harsh. The Petitioner asserts that they received the minutes from the Empowered Committee Meeting held on 11 November 2014 only on 25 February 2015 through the RTI. Subsequently, the current Petition was filed on 24 March 2015. Certain ad-interim reliefs preventing the Respondents from taking coercive measures were obtained on 27 March 2015. 16. By order dated 20 January 2016, a Rule was issued in this Petition, and the ad-interim orders restraining the Respondents from taking any coercive steps were directed to operate until the final disposal of the Petition. In addition, this Court granted the Petitioners liberty to represent to the Respondents to modify/withdraw the impugned notification dated 26 March 2014. 17. Accordingly, the Petitioners filed representation dated 11 March 2016 seeking revocation/withdrawal/modification of the impugned notification dated 26 March 2014. This was followed by a reminder dated 10 February 2017. On 15 March 2017, the Petitioners were directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e approval and, therefore, no case was made for reopening the assessment. 21. Mr Kacheria submitted that the impugned notification dated 26 March 2014 was ultra vires because the same was issued by CBDT, which lacked the power to revoke the approval notification dated 17 November 2006. He submitted that the power to revoke the approval notification dated 17 November 2006 was only vested with the Central Government (R1). He relied on Creative Infocity Limited Vs Under Secretary (I. T. A-1) & Ors 2012 SCC OnLine Gujarat 1189 to support his contention. He further submitted that the CBDT could publish such a notification only after the Central Government approves it. He relied on Commissioner of Income Tax Vs Aakruti City Limited 2013 SCC OnLine BOM 1960, to support his contentions. Accordingly, he submitted that the impugned notification dated 26 March 2014 purporting to revoke the approval notification dated 17 November 2006 is illegal, ultra vires, null and void and must be struck down. 22. Finally, Mr. Kacheria argued that the contested notices for reopening the assessment, which were based on the disputed notification dated March 26, 2014, are illegal, ultra vires, null, and voi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dinary jurisdiction. They submitted that there were hardly any pleadings in the Petition in support of the alleged factual aspects adverted to by Mr. Kacheria during arguments. 27. For all the above reasons, Mr. Suresh Kumar and Mr. Mishra submitted that this Petition may be dismissed and the interim orders vacated. 28. The rival contentions now fall for our determination. 29. The Petitioners have already given up/abandoned their challenge to the impugned orders/communication dated 03 February 2014, which resulted in the rejection of the Petitioners' application dated 15 December 2011 seeking amendments to the earlier granted approval dated 17 November 2006. 30. In any event, the Petitioners have not been very candid on compliance with the conditions in the approval dated 17 November 2006. The application for amendment dated 15 December 2011 and other documents concerning the issue of amendment suggest that the condition of establishing and maintaining a minimum of 14 units was not complied with. The Petitioners argued that such non-compliance was for reasons not attributable to the Petitioners. The Petitioners argued that the unit holders amalgamated and merged; therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly, it is for the fact-finding authorities like the Assessing Officer, Commissioner Appeals and ITAT to go into such contentions of fact and law. The only reason why we have referred to such contentions is that Mr Kacheria relied upon the ITAT's interim order dated 31 December 2024 to show that the Petitioners have raised the issue of compliance even though the approval dated 17 November 2006 may have been rescinded by subsequent notification dated 26 March 2014. 35. The Petitioners' challenge to the impugned notification dated 26 March 2014 withdrawing or cancelling the earlier approval/notification dated 17 November 2006 proceeds on the premise that the impugned notification dated 26 March 2014 has been issued by the CBDT when the power for issuing such notification was never vested in the CBDT but was vested in the Central Government. 36. The above premise cannot be accepted on a plain notification reading. Merely because the notification, in its title, refers to the Ministry of Finance (Department of Revenue)(Central Board of Direct Taxes), we cannot say that the Central Government has not issued the impugned notification but has been issued only by the CBDT exercising i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct from the 17 November, 2006. [Notification No. 20/2014/F. No. 178/91/2006-ITA-11 SURABHI SHARMA, Under Secy. 38. The impugned notification clearly speaks about the Central Government (Ministry of Commerce and Industry) in exercise of the powers under the Industrial Park Scheme, 2002, through the Empowered Committee granting approval to the Petitioners for establishing an Industrial Park. The impugned notification recites that the Central Government (Ministry of Finance) (Department of Revenue) (CBDT) in the exercise of powers conferred by clause (iii) of sub-section 4 of section 80-IA of the IT Act had notified the Petitioners' undertaking being developed as an Industrial Park for the purpose of said clause (iii), vide Central Government's notification dated 17 November 2006. The impugned notification then recites that subsequently, the Central Government (Ministry of Commerce and Industry) vide letter dated 03 February 2024 has withdrawn the said approval granted to the undertaking under the Scheme. Finally, the impugned communication declares that now, therefore, the Central Government, in exercise of the powers conferred by clause (iii) of sub-section 4 of section 80-I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled to deduction under s. 80-IA (4) (iii) of the IT Act on profits an industrial park at Marol Andheri when AO made disallowance as per r. 18C of the IT Rules and project of the assessee was not notified by the CBDT in the asst. yr. 2005-06 and assessee has not shown relevant income as business income in the original return of income filed?" 43. In so far as the above question is concerned, the Division Bench, observed as follows in paragraphs 3 and 4:- "3. Insofar as question (d) is concerned, the Tribunal by the impugned order upheld the order of the CIT(A) holding that the respondent-assessee is entitled to the benefit of deduction under s. 80-IA(4) (iii) of the IT Act, 1961 ("Act" for short). The objection of the Revenue is that the deduction under s. 80-IA(4) (iii) of the Act is available to an industrial park only on CBDT notifying the industrial park under r. 18C of the IT Rules, 1962 ('the Rules' for short). This the CBDT did only on 5th June, 2006. Therefore, according to the Revenue the benefit of s. 80-IA of the Act in terms of sub-s. (4) (iii) thereof would be available as from asst. yr. 2007-08 and not earlier. The CIT(A) as well as the Tribunal have hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in these proceedings, as it is, the Petitioners' versions on this issue were far from consistent. There was no proper pleading for the application of the functionality test. 47. In Primal Projects (P) Ltd. (supra), the Division Bench of the Karnataka High Court was concerned with an Appeal under Section 260A of the IT Act against an order of ITAT. The Assessing Officer had held that during the relevant assessment year, the assessee did not have five industrial units which was a minimum requirement under the approvals granted to the assessee under the Industrial Park Scheme, 2002. The Commissioner (Appeals), however, did not advert to this factual aspect but dismissed the assessee's appeal on the ground that the assessee carried out substantial development work before obtaining approval under the scheme, and therefore, was dis-entitled to benefit of deduction under Section 80-IA (4) (iii) of the IT Act. 48. The ITAT, however, recorded a finding of fact that even though the assessee had leased out five/four floors to a particular tenant, but the tenants are carrying on their operations as independent units and their activities are functionally different. Therefore, the Tribunal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above reasons, we are satisfied that no case is made out to interfere with the impugned notification dated 26 March 2014 or the impugned notices seeking to reopen the assessment. However, all parties' contentions during the reassessment proceedings are kept open. 53. Mr. Kacheria did submit that this Court, by its order dated 20 January 2016, granted liberty to the Petitioners to represent against the impugned notification dated 26 March 2014 and directed the consideration of such representation. The representations were made on 11 March 2016, 10 February 2017, 06 December 2021 and 20 December 2021, but to date, the representations have not been disposed of. This is not proper. Such representations should have been disposed of by the appropriate authorities by now. 54. Accordingly, we direct the appropriate Respondents to dispose of the Petitioners' representations without being influenced by the dismissal of this Petition. This direction is issued because Mr Kacheria referred to the minutes of the meeting of the Empowered Committee held on 11 November 2014, in which a prima facie view was expressed by the DIPP that the withdrawal of approval w.e.f. 17.11.2006 was a littl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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