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TMI Blog2017 (2) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... Government of India, admittedly had granted approval and for that reason benefit of deduction under Clause (b) has been allowed by Revenue Authorities to Assessee. In order to attract Clause (a), no decision has been taken by Director General, Income Tax (Exemptions) though application has been filed by Assessee in this regard in 2002. Competent Authority for granting approval is an officer of Income Tax Department itself. Assessee has neither any administrative control nor otherwise can compel said authority to act within a particular time and in a particular manner. It is the authority of Revenue itself, who has to grant approval. For own lethargy or inaction on the part of an officer of Income Tax Department, a deduction which otherwise may be available to Assessee, cannot be denied since it is not a case where Assessee is disqualified being ineligible for such deduction but question of approval is pending before Competent Authority, who is a senior officer of Income Tax Department and has not been able to get enough time to take a decision on the application filed by Assessee on 28.08.2002. Observations of Tribunal that Assessee did not pursue matter are unwarranted for the rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mishra-II, JJ. For the Appellant : Mudit Agarwal For the Respondent : G.S. Chaudhary,Manish Mishra ORDER 1. Heard Sri J.N. Mathur, learned Senior Advocate assisted by Sri Mudit Agarwal, Advocate for Assessee and Sri Manish Mishra, Advocate for Revenue. 2. Appeals No. 20 of 2014, 21 of 2014, 22 of 2014, 30 of 2014, 31 of 2014 and 32 of 2014 have arisen from common judgment dated 16.05.2014 passed by Income Tax Appellate Tribunal, Lucknow Bench A , Lucknow (hereinafter referred to as the Tribunal ) and relate to Assessment Years 2006-07, 2008-09 and 2009-10. Appeal No. 38 of 2015 has arisen from judgment dated 16.01.2015 passed by Tribunal and relates to Assessment Year 2007-08. 3. Assessee's appeal, i.e., Appeals No. 20 of 2014, 21 of 2014, 22 of 2014 and 38 of 2015 have been admitted on following substantial question of law: Whether the finding recorded by the Tribunal to the effect that after 13.12.2011 the appellant has done nothing to pursue the pending matter for approval before the Director General of Income Tax under Section 80-IB (7)(a) of the Act is perverse since before the Tribunal the application moved by the appellant dated 29.3.2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 80 IB(7) specifically provides that deduction under Clauses (a) and (b) shall be available only if conditions set out in sub-clauses (i), (ii) and (iii) of Clause (c) are satisfied. In the present case we are concerned with sub-clause (iii), which reads as under: (iii) the hotels is for the time being approved the prescribed authority: Provided that any hotel approved by the prescribed authority before the 1st day of April, 1999 shall be deemed to have been approved under this sub-section. 7. Under Rule 18 BBC of Income Tax Rules, 1962 (hereinafter referred to as the Rules, 1962 ), Prescribed Authority is identified as Director General, Income Tax (Exemptions) and he has to grant approval on concurrence of Director General in the Directorate General of Tourism, Government of India in respect of hotels which qualified for 50% deduction under Section 80 IB(7)(a); and, hotels covered by Clause (b) on Section 80 IB(7), there, prescribed authority competent for granting approval is Director General in the Directorate General of Tourism, Government of India. 8. Assessee's hotel in Lucknow comes within the Buddhist Circuit which is a tourist place notified by Depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80 IB(7)(c) deduction under Clause (a) or (b), as the case may be, would be applicable only if hotel is for the time being approved by Prescribed Authority. Authority has been prescribed under Rule 18 BBC. For attracting deduction under Clause (b) it is only one authority, namely, Director General in the Directorate of Tourism, Government of India but for attracting deduction under Clause (a), Competent Authority is Director General, Income Tax (Exemptions), who has to act upon with concurrence of Director General in the Directorate of Tourism, Government of India. The Director General in the Directorate of Tourism, Government of India, admittedly had granted approval and for that reason benefit of deduction under Clause (b) has been allowed by Revenue Authorities to Assessee. In order to attract Clause (a), no decision has been taken by Director General, Income Tax (Exemptions) though application has been filed by Assessee in this regard in 2002. Competent Authority for granting approval is an officer of Income Tax Department itself. Assessee has neither any administrative control nor otherwise can compel said authority to act within a particular time and in a particular manner. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 80A, which reads as under: (5) Where the assessee fails to make a claim in his return of income for any deduction under Section 10A or Section 10AA or Section 10B or Section 10BA or under any provision of this Chapter under the heading C.--Deductions in respect of certain incomes , no deduction shall be allowed to him thereunder. 16. We find that sub-section (5) of Section 80A was inserted by Finance Act (No. 2) of 2009 but given effect from 01.04.2003. It says, where Assessee fails to make claim in his return of income for deduction under any provision of Chapter VIA, under the heading C.-Deductions in respect of certain incomes , no deduction shall be allowed to him thereunder. It is contended that since Assessee has not claimed deduction under Section 80 IB(7)(b), hence same could not have been granted. 17. Record shows that Assessee had claimed actual deduction of ₹ 30,20,198/- under Section 80 IB(7)(a) but same was declined by Assessing Authority for want of approval by Prescribed Authority. Deduction under Section 80 IB(7) to a hotel is common and difference in Clauses (a) and (b) is with regard to percentage, which is 50% and 30% respectively. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut in another sub-clause could have been allowed. Here it cannot be said that Assessee had not claimed any deduction whatsoever in return, therefore, is not entitled in view of Section 80 A. We have no hesitation in holding that in the present case Section 80 A has no application. 20. We are not impressed that while declining exemption under Section 80 IB(7)(a) for want of approval by Competent Authority, Tribunal has erred in law in confirming order of CIT(A) in allowing deduction under Section 80 IB(7)(b) of Act, 1961. Therefore, the questions formulated in appeals filed by Revenue are answered against it. 21. In the result, appeals preferred by Assessee, i.e., Appeals No. 20 of 2014, 21 of 2014, 22 of 2014 and 38 of 2015 are partly allowed. Concerned authority under Section 80 IB(7)(c)(iii) of Act, 1961 read with Rule 18 BBC of Rules, 1962 is directed to take a final decision on Assessee's application for grant of approval within a period of two months from the date of production of a certified copy of this order. In case approval is granted, Assessing Authority shall reconsider the matter in the light of aforesaid approval with regard to deduction under Section 80 IB( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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