2019 (2) TMI 176 - HC - Income Tax

Entitlement to benefit u/s 80IB - assessee company is a private company, engaged in manufacture and trade of electronic and electrical equipments and goods - CIT(A) accepted assessee s plea and held that the turnover stipulations in terms of the investments in the fixed assets by Note 1 of the DIPP circular had been complied with also affirmed by ITAT - Held that - The Revenue highlights the report of the Auditor and submits that since this was the material on record, which the AO gave importance to, CIT(A) as well as ITAT were in error in choosing to ignore it. This Court is of the opinion that no substantial question of law arises, as it is far too well settled that the duty of the Assessing Officer is to apply the law in the given facts regardless of the position of the Revenue or the assessee in the course of the proceedings refer to Kedarnath Jute Mfg. Co. Ltd. vs. Commissioner of Income Tax, Central Calcutta - 1971 (8) TMI 10 - SUPREME COURT . - Decided against revenue

Summary

Issues:
1. Appeal under Section 260A of the Income Tax Act, 1961 regarding entitlement to benefit under Section 80IB for a specific Assessment Year.

Analysis:
1. The appeal before the Bombay High Court under Section 260A of the Income Tax Act, 1961 pertained to the entitlement of the respondent/assessee to the benefit under Section 80IB for the Assessment Year 2005-2006. The Revenue contended that the lower Appellate Authorities erred in allowing the benefit to the assessee, a private company engaged in the manufacture and trade of electronic and electrical equipment. The dispute arose when the Assessing Officer re-opened the case and found the assessee did not qualify as a small-scale undertaking as per the Ministry of Industry's DIPP order dated 10.12.1997, due to not meeting turnover stipulations. However, the CIT(A) and ITAT ruled in favor of the assessee, leading to the Revenue's appeal.

2. The crux of the Revenue's argument was based on the Auditor's report, which highlighted the disqualifying factors for the assessee's claim under Section 80IB. The Revenue contended that both the CIT(A) and ITAT erred in disregarding this crucial piece of evidence. However, the High Court, citing the precedent set in Kedarnath Jute Mfg. Co. Ltd. vs. Commissioner of Income Tax, Central Calcutta (1971) 82 ITR 363 (SC), emphasized the Assessing Officer's duty to apply the law objectively, irrespective of the parties involved in the proceedings.

3. Ultimately, the High Court found no substantial question of law warranting further consideration, as the legal position was clear regarding the application of Section 80IB in the given circumstances. Consequently, the appeal lacked merit, leading to its dismissal by the Court.

This detailed analysis of the judgment showcases the legal intricacies involved in the interpretation and application of tax laws, specifically concerning the entitlement to benefits under Section 80IB of the Income Tax Act, 1961 for the relevant Assessment Year.