2012 (4) TMI 117 - HC - Income Tax

Deduction u/s 80IA - Rule 18C 4 of the Income Tax Rules, 1962 - petitioner, by a letter dated December 9, 2005 informed the Assistant Commissioner of Income Tax that the time mentioned as September, 2002 was a typographical mistake in the petitioner s earlier letter dated August 25, 2003 and the correct time to be read was September, 2001 - according to the petitioner, the Board ought to have notified the industrial park on getting a copy of approval letter dated June 21, 2001 of the Commerce Ministry, which is annexed to the writ-application as Annexure A - it is the duty of the Commerce Ministry to decide whether an industrial undertaking is complying with the conditions envisaged in the scheme and if the undertaking fails to comply with those conditions, it is the Commerce Ministry alone, which has the right to withdraw the benefit granted under sub-rule 2 of Rule 18C of the Rules - Held that it is a fit case where the petitioner is entitled to the relief claimed in the application. We, accordingly, direct the Central Board of Direct Taxes to notify the petitioner s industrial park for the benefits under Section 80-IA in terms of Rule 18C 4 of the Rules within one month from today without any further inquiry - Decided in favor of the assessee

Summary

Issues:
- Delay in granting benefits under Section 80-IA of the Income Tax Act to the petitioner's industrial park despite approval from the Commerce Ministry.
- Interpretation of Rule 18C of the Income Tax Rules, 1962 regarding the duty of the Central Board of Direct Taxes to notify industrial parks for benefits under Section 80-IA.

Analysis:
1. Delay in Granting Benefits: The petitioner sought a writ of mandamus to direct the Central Board of Direct Taxes to notify their industrial park for benefits under Section 80-IA of the Income Tax Act. The petitioner had obtained approval under the Industrial Parks Scheme from the Commerce Ministry, which had not been revoked. The Assistant Commissioner of Income Tax raised queries regarding the commencement date of the industrial park, leading to dissatisfaction and the filing of the writ-application.

2. Interpretation of Rule 18C: The key contention was whether the Board was justified in delaying the grant of benefits under Section 80-IA despite approval from the Commerce Ministry. Rule 18C of the Income Tax Rules, 1962 mandates that once an undertaking is duly approved by the Commerce Ministry under the Industrial Parks or Special Economic Zones Scheme, the Board must notify the industrial park for benefits under Section 80-IA. The Court emphasized that the Board's duty is limited to notifying industrial parks upon approval by the Commerce Ministry, without further investigation into compliance with scheme conditions.

3. Legal Analysis: The Court held that the Commerce Ministry, as the approving authority, has the power to examine compliance and revoke approval if conditions are not met. Until such revocation, the Board is obligated to notify industrial parks for benefits under Section 80-IA. The judgment clarified that if the Commerce Ministry withdraws approval, the petitioner would lose the benefits. The Court directed the Board to notify the petitioner's industrial park under Rule 18C within one month, subject to the approval's continuance by the Commerce Ministry.

4. Conclusion: The Court allowed the writ-application, emphasizing that it did not delve into the petitioner's compliance with approval conditions. No costs were awarded. The judgment underscores the Board's duty to notify industrial parks upon approval by the Commerce Ministry under Rule 18C, without engaging in further inquiries, unless approval is revoked by the Ministry.