2015 (4) TMI 941 - HC - Income Tax

Application for notification under section 801A(4)(iii) rejected - application for approval of the Information Technology Park under the Industrial Park Scheme, 2008 - Non fulfillment of conditions - revenue contended that it is apparent that they have included the area of common facility and infrastructure facility and it is at variance with the conditions set out in the Industrial Park Scheme, 2008 - Held that - That there is difference between the commencing of a work or grant of such certificates enabling the commencing of development and provided in section 347. Thus, the development permission is sought under section 44 of the Maharashtra Regional Town Planning Act, 1966. Accordingly, it may be granted as contained in the certificate conditionally or unconditionally. Once such certificates are issued by a Competent Authority and certifying the work has having been completed or the premises being fit to be occupied on the same being completed, then, it is not for anybody else to question the contents. They shall be under such circumstances taken as conclusive evidence of the commencement and completion of the work. Unless these certificates are obtained by perpetuating a fraud or they can be termed as suspicious, we do not see how the authorities like the Central Board of Direct Taxes or the Commissioner can question the contents and moreso by exhibiting their ignorance completely. If they have a doubt about the genuineness or authenticity of such certificates, nothing prevents them from seeking clarifications from the Municipal or Planning Authorities. Therefore, when the Architect has issued a certificate, based on which the project is undertaken and completed, then, we do not see what more is needed. The Board should have been aware of the fact that no project or construction for development can be undertaken or completed unless the plans for the same are furnished in advance and approval and sanction thereof is obtained from the Municipal Corporation. They have a full set of engineers and experts who apply their mind and sanction and approve the building construction plans and in terms of the Development Control Rules, 1991 which are in place. In such circumstances, we do not see what discrepancy can be found with the Architect s certificate. However, in relation to that as well, we do not find any application of common area for use as industrial park. There is further stipulation that no industrial unit, along with the units of an associated enterprise shall occupy more than twenty-five per cent of the allocable area for industrial activity or commercial activity. Thus, what has to be understood with reference to the definition of term allocable as above in sub-para (2A) of para 2 of the Scheme takes care and disentitles a person from a notification if the industrial park is not owned by only one undertaking and industrial unit did not undertake activity defined in para 2(j) of the Scheme. To facilitate industrial activity that these conditions are incorporated or inserted. In such circumstances, we do not understand as to how para 4(2a) and 4(6) of the Scheme have been violated. As a result of the above discussion, we set aside the order dated 21st November, 2014. The application of the petitioners dated 22nd February, 2011 together with all further details and specifications provided by them shall be considered afresh and requisite order in accordance with law be passed as expeditiously as possible and within a period of four weeks from the date of receipt of a copy of this order. - Decided in favour of assessee for statistical purposes.

Summary

Issues Involved:
1. Application for notification under Section 80IA(4)(iii) of the Income Tax Act, 1961.
2. Rejection of the application by the respondents.
3. Compliance with the Industrial Park Scheme, 2008.
4. Validity of the occupation certificates provided.
5. Alleged non-compliance with the conditions of the Scheme.

Detailed Analysis:

1. Application for Notification under Section 80IA(4)(iii) of the Income Tax Act, 1961:
The petitioners sought a writ of mandamus directing the first respondent to grant the application dated 22nd February 2011 and issue a notification under Section 80IA(4)(iii) of the Income Tax Act, 1961. The petitioners developed an Information Technology Park named Techniplex-I and applied for approval under the Industrial Park Scheme, 2008, which was notified on 8th January 2008.

2. Rejection of the Application by the Respondents:
The respondents rejected the application on 21st November 2014, citing non-compliance with the conditions specified in the Scheme, particularly the failure to obtain a final occupation certificate for the entire project. The petitioners challenged this rejection, arguing that they had complied with all requisite conditions.

3. Compliance with the Industrial Park Scheme, 2008:
The Scheme requires the date of commencement of the industrial park to be on or after 1st April 2006 but not later than 31st March 2011. The petitioners claimed compliance with this condition by providing part occupation certificates issued by the Municipal Corporation of Greater Mumbai. The court noted that the Scheme defines an industrial park as a project with developed space or built-up space with common facilities and quality infrastructure.

4. Validity of the Occupation Certificates Provided:
The petitioners provided three part occupation certificates dated 21st November 2009, 15th October 2010, and 14th December 2010. The Municipal Corporation of Greater Mumbai confirmed that the entire IT Building No.4 was completed on 14th December 2010. The court found that the respondents erroneously insisted on a single final occupation certificate, failing to recognize that part occupation certificates are valid under the Municipal Corporation of Greater Mumbai Act, 1888.

5. Alleged Non-compliance with the Conditions of the Scheme:
The respondents argued that the petitioners included the area of common facilities and infrastructure facilities in the allocable area, which is at variance with the conditions of the Scheme. The court noted that the Scheme allows for part occupation certificates and that the petitioners had provided sufficient documentation to demonstrate compliance. The court also criticized the respondents for their lack of understanding of the relevant laws and for questioning the validity of certificates issued by the Municipal Corporation.

Conclusion:
The court set aside the order dated 21st November 2014 and directed the respondents to reconsider the petitioners' application dated 22nd February 2011. The respondents were instructed to pass a fresh order in accordance with the law within four weeks, allowing the petitioners to present their case and provide additional documentation if necessary. The court also directed that no coercive measures be taken to recover taxes until the application is reconsidered.