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TMI Blog2025 (4) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances of the case and in law, the Ld. CIT(A) is right to derive the unfounded conclusion that the impugned order u/s. 154 of the Act was passed by the AO on a matter already decided by the CIT(A) on an earlier date when such is not the case and the rectification order u/s. 154 carried out by the AO was on a matter not in dispute before the CIT(A) in such earlier order?" 3. "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is right to unilaterally presume that the impugned order passed u/s. 154 of the Act imposed upon the earlier dated order of the CIT(A) the AO's intent to modify the decision made in such earlier order, while also simultaneously seeking to conclude that the passing of such earlier order by the CIT(A) would invalidate the statutory jurisdiction and/or time frame mandated to pass such order of rectification?" 4. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in allowing the profit of Thermal Power Plant as deduction u/s 80IA without appreciating provision of Section 80IA(12A) of the Income Tax Act, 1961 and that the revenue has preferred an appeal before the Hon'ble Bomb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim was made by the assessee u/s 80IA(12) of the Act. He further held that with the insertion of sub-section (12A) in section 80IA, the assessee's claim u/s 80IA(12) was a mistake apparent from record. He therefore, rejected the claim of the assessee u/s. 80IA, amounting to Rs. 16,41,59,884/-. 4. In the subsequent appeal before the ld.CIT(A),the assessee contented that during the course of assessment proceedings, the appellant had furnished detailed submissions in respect of claim made u/s. 80IA of the Act in respect of power generating undertakings (Thermal Power Plants) and Railway undertakings. Based on the submission so made, the claim for deduction u/s 80IA for TPP as well as Rail Systems was examined in detail during the course of regular assessment proceedings. The ld.AO passed order under section 143(3) of the Act dated 10.03.2014. In the order, he has discussed at length in para 9 (Page 6 onwards) regarding deduction claimed under Chapter VIA. The claim of the assessee in respect of TPP had been allowed at Rs. 16,37,54,164/- after adding back an amount of Rs. 3,86,538/- towards appropriation of Head Office Expenses and Rs. 19,182/- towards Other income. As regards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rail System Undertaking. 4.2 Based on above facts, it was pleaded that the allowability of claim under section 80IA has been already considered by the predecessor AO as well as the CIT(A). Carrying out of rectification under section 154, therefore, tantamounts to review of own order or change of opinion and cannot be considered as mistake apparent from record. Hence the order passed under section 154 of the Act is bad in law. In this case, reliance was also placed on various case laws i.e.Beena Rahul Mishra vs CIT & others (185 ITR 361), T.S. Balram ITO v. Volkart Brothers & Others (82 ITR 50) (SC),Khatau Junkar Ltd. vs K.S. Pathania [1992] 196 ITR 55 (Bom),Satish Kumar Aggarwal v. Deputy Commissioner of Income-tax [2012] 20 taxmann.com 172 (Delhi ITAT) and Additional CIT v. Chemical Limes (149 ITR 325) (Raj).Based on the above decisions, it is stated that the proposed action to withdraw the claim under section 80IA cannot be classified as a mistake apparent from records. 4.4. It was also pleaded that it is logical to presume that the claim was examined thoroughly by the predecessor AO during the course of regular assessment proceedings under section 143(3) of the Act. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act and granted deduction u/s. 80IA of the Act to the successor company. For the sake of brevity, the elaborate observations made by this Tribunal on merits is not reproduced hereunder. Hence, even on merits, the assessee is entitled for deduction u/s. 80IA of the Act in the facts and circumstances of the instant case. Accordingly, the ground Nos. 1-4 raised by the assessee are allowed." 5.5 Thus, respectfully following the Hon'ble Tribunal's decisions in the case of appellant on identical issue for earlier years the grounds 1, 2 & 4 of the appellant are upheld. 6.1 In ground no. 3, the appellant has contended that once the claim has been allowed by the Ld. CIT (A) the same cannot be rectified subsequently by the AO. 6.2 I have gone through the order dated 18.05.2017 of the Ld. CIT (A). It is noted that while disposing of the ground related to claim of deduction u/s 80IA of the Act in respect of Rail systems, the Ld. CIT (A) has briefly decided the matter as under: "14. Ground no. 9 Vide this office appeal order dated 21.4.2017 in appellant's own case for A.Y. 2010-11, this ground has been decided in favour of appellant company. Therefore, since the ground here is i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As per the provisions of section 154 of the Act, rectification of mistake (1) with a view to rectifying any mistake apparent from the record an income- tax authority referred to, in section 116 may- "(a) amend any order passed by it under the provisions of this Act; (b) amend any intimation sent by it under sub- section (1) of section 143, or enhance or reduce the amount of refund granted by it under that sub- section.] (1A) Where any matter has been considered and decided in any proceeding by way of appeal or revision relating to an order referred to in sub- section (1), the authority passing such order may, notwithstanding anything contained in any law for the,, time being in force, amend the order under that sub- section in relation to any matter other than the matter which has been so considered and decided.] (2) Subject to the other provisions of this section, the authority concerned-- (a) may make an amendment under sub- section (1) of its own motion, and (b) shall make such amendment for rectifying any- such mistake which has been brought to its notice by the assessee, and where the authority concerned is the Deputy Commissioner (Appeals)]" 7.1 However, it is a set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has exhaustively dealt with the issue in hand in its order in the case of the assessee Ultratech Cement Ltd, Mumbai vs Dcit Cen Cir 1(4), Mumbai on 14 December, 2021 in ITA NOs. 1412, 2461,2462, 2872, 2873 &3764/MUM/2018 C.O.NOs. 130, 118 & 155/MUM/2019 for various assessment years including the year under consideration. More specifically in Assessee's Appeal - ITA No. 1413/Mum/2018(AY) 2011-12 the issue was analysed in great detail before allowing the claim of deduction u/s 80IA(12A).The relevant ground and the decision rendered therein are extracted below for ready reference as under: "1. Grounds raised by the assessee are as under: 1) On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) has erred in upholding the disallowance u/s 80IA amounting to Rs. 82,61,81,708 for Rail Systems and Rs. 18,91,43,054 for Power Plants. He erred in holding that in respect of Rail Systems and Power Plants transferred from Samruddhi Cement Limited to the appellant Company pursuant to the scheme of amalgamation, the deduction is not allowable as per the provisions of section 80IA(12A) of the income Tax Act 1961. 23. Ground no.1 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Memorandum explaining the provisions of Finance Bill, 2007. 26. The LD CIT(A) upheld the view taken by the AO and noted that amendment provision brought in by the Finance Act, 2007 is free from any ambiguity and pursuant to such amendment, deduction under section 80IA becomes impermissible for the amalgamated company in respect of the undertakings inherited under the scheme of amalgamation.. 28. The Ld AR took us through the provisions of sub-section (1) and submitted that the benefit of tax holiday, as envisaged u/s. 80IA, is attached to an 'undertaking' and not to the 'owner'. Accordingly, it was emphasized that the change in ownership has no impact on the availability of deduction in the hands of the successor company.............. 30. According to the Ld AR of the assessee, sub-section (12) was introduced merely with the intention to put to rest the divergent views taken by the authorities on this issue. It was also pointed out that sub-section (12) to section 80IA did not confer any new right to an assessee to claim the deduction. Sub-section (12) merely clarified that the successor company shall be eligible to claim the deduction for the as per section 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undertakings for the residual period, the tax authorities cannot deny the deduction in contempt of the order of Hon'ble High Court. 39. In the rejoinder, the Ld AR of the assessee submitted that the interpretation of CBDT is contrary to the plain reading of sub-section (12) or (12A), as also the explanatory memorandum to the Finance Bill, 1999 by which sub-section (12) was introduced in the statute and Finance Bill, 2007 by which sub-section (12A) was introduced in the statute. It was further argued that Circulars issued by CBDT are not binding either on the assessee or on the Courts/ Tribunals for the purpose of interpretation of law especially when the language used in the statute is plain and unambiguous. Reliance was placed in this regard on the Supreme Court Ruling in the case of Ratan Melting & Wire Industries (Civil Appeal No.4022 of 1999). 41. We have carefully gone through the orders of the lower authorities / materials placed before us and considered the arguments of both parties. Grievance of both parties revolve around eligibility of tax holiday claim for units acquired by the assessee Company from SCL pursuant to the Scheme of amalgamation. 49. Thus, there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thing containing sub-section (12) shall apply to an enterprise or undertaking which is transferred in the scheme of amalgamation or demerger on or after the 1st day of April, 2007". 77. Notes on clauses to the Finance Act, 2007 explains it as follows: "It is proposed to insert sub-section (12A) so as to provide that nothing contained in sub-section (12) shall apply to any undertaking or enterprise which is transferred in a scheme of amalgamation or demerger on or after the 1st day of April, 2007". 78. The Notes on clauses simply reiterated what has been stated in sub-section (12A). The memorandum explaining the provisions of the Finance Bill 2007, which has been relied upon by the AO as well as LD CIT(A) states as under: "Tax benefit u/s 80-IA not available to undertakings / enterprises of Indian companies undergoing amalgamation or demerger after 31.03.2007. The existing provisions of section 80-IA provide for 100% deduction for ten years in respect of profits and gains of certain undertakings or enterprises engaged in the business of development, operation and maintenance of infrastructure facility, industrial parks and special economic zones or generation distribution or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the year of amalgamation or demerger, the insertion of sub-section (12A) merely negated the effect of sub-section (12) and cured the disability created under sub-section (12) of section 80IA of the IT Act. .......... 88. In our view, therefore, the clarification provided in the circular for insertion of sub-section (12A) cannot be extended beyond what is unambiguously stated in the provisions of the IT Act. Sub-section (12A) simply states that from a particular date i.e. 31 March 2007 the provisions of sub-section (12) shall not apply in the specified situations. There cannot be any other meaning to such simple provision of the IT Act. 93. While we reject the contention of the Revenue that intention of the legislature in introducing sub-section (12A) was to deny the benefit to the successor in the scheme of amalgamation or demerger, it is also worth noting that in the present case, the initial investment in eligible undertakings /enterprises was made by Grasim (the holding company of the assessee). These undertakings were demerged by Grasim to its wholly owned subsidiary, viz. SCL. Subsequently, SCL was amalgamated with the assessee w.e.f. 1 July 2010. Accordingly, even after ..... 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