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TMI Blog2017 (8) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... and related byproducts. As part of the company's ongoing activities, oil explorations and mining has been going on across various oil fields over a period of time. Various issues arising out of the assessee's claim of deduction under section 80IB (9) of the Income Tax Act, 1961 ('the Act' for short) with respect to the income generated from such activity have cropped up between the assessee and the department. For the assessment years 2003-04 to assessment years 2009-10, such issues are pending before the Income Tax Appellate Tribunal in these appeals and crossappeals. The case of the petitioner is that the Tribunal has granted conditional stay against the orders of the Commissioner (Appeals) to the extent they are adverse to the assessee upon depositing certain percentage of the disputed tax dues. The assessee therefore has been urging the Tribunal to finally dispose of such appeals. The assessee is otherwise in financial crunch and needs the deposited amounts back. 3. Sub section (9) of section 80IB of the Act grants deduction to an undertaking which begins commercial production of refining of mining oil on hundred percent of its profit for a period of seven cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amendment to section 80IB(9) by retrospective insertion of explanation to section 80IB(9) by the Finance Act, 2009 was "ultravires" to the Constitution. 3. The Department filed SLP and the Hon'ble Apex Court, vide admitting SLP in (CC) No. 18370 of 2015, arising out of order passed by High Court of Gujarat dated 26.03.2015 in SCA No. 10903 of 2009, vide order dated 20.11.2015 has ruled out as under:- "As we are entertaining the matter, the High Court (s) where the appeals are pending shall not finalise the same till the matter is dealt with by this Court." 4. In view of the aforesaid directions of the Supreme court, I am directed to request that matters pertaining to validity of amendment of section 80IB(9) by retrospective insertion of Explanation to 80IB(9) may please be kept in abeyance, in case appeals on such issues are pending before ITAT, Ahmedabad. A copy of the Supreme Court order is enclosed for ready reference." 4. In all the above referred appeals, identical issue is involved. Therefore, in view of the above, it is requested that the above appeals may be adjourned sine die. 5. It is mentioned that in view of direction of Hon'ble Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not involved at all. The Tribunal committed an error in postponing the hearing of these appeals along with other appeals. 8. On the other hand, learned counsel Mr. Nitin Mehta for the department opposed the petition contending that in majority of the appeals, the question of deduction under section 80IB(9) of the Act is involved. This in fact, is the predominant issue in such pending appeals. The remaining issues involve much lesser tax effect. The Supreme Court in its interim order dated 20.11.2015 has clearly directed that no High Court shall finalize the appeals pending before itself which involve issues similar to those decided by the High Court in case of Niko Resoruces Ltd. The Tribunal, therefore, correctly desisted from proceeding further in the appeals. The issue involved before the Tribunal is one of applicability of clause (iv) of sub-section (9) of section 80IB of the Act which was also considered by the High Court in case of Niko Resources Ltd. (supra). 9. To appreciate the controversy, we may peruse the decision of the High Court in case of Niko Resources Ltd. (supra) more minutely. As noted, prior to its substitution by the Finance (No.2) Act of 2009 sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ensed under similar contract, would be treated as a single undertaking. One of the oil exploration company Niko Resources Ltd. therefore approached the Gujarat High Court by filing a writ petition and challenged such stand of the Revenue. According to the petitioner therein, the Explanation below sub-section (9) of section 80IB could not have been given retrospective effect since it affected the accrued rights. According to the petitioner clause (iv) was ultra vires the Constitution since it made an artificial distinction. In such petition, the Gujarat High Court considered the following three questions: "31. We have examined the rival contentions and according to us the following issues fall for consideration in this matter:- (i) Whether the insertion of the Explanation to Section 80- IB(9) of the Income Tax Act, 1961 by Finance (No.2) Act, 2009 with retrospective effect from 1.4.2000 explaining the meaning of the term "undertaking" is unconstitutional and ultra vires to Article 14 of the Constitution of India? (ii) Whether the insertion of sub clause (iv) in Section 80- IB(9) of the Income Tax Act, 1961, by Finance (No.2) Act, 2009 conferring the benefit of the deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arge number of such appeals. We have, therefore, proceeded on such basis. In that context, if we peruse the interim order of the Supreme Court, it provides that since the Supreme Court is entertaining the matter, the High Court wherever such appeals are pending, would not finalize the same till the matter is dealt with by the Supreme Court. The intention of the Supreme Court is thus, amply clear and it precludes any High Court from deciding the issues which are presented in the appeal against the judgement of the High Court in case of Niko Resources Ltd. (supra). Such issue could be one of implication of the Explanation to subsection (9) of section 80IB or of the interpretation of clause (iv) thereof. In either case, it would not be open for the High Court to proceed further and finalize the issue till the Supreme Court decides the appeal. Effectively therefore, the Supreme Court not only stayed the operation of the judgement of the High Court but has stayed judgement itself. 15.We are conscious that the order of the Supreme Court does not take within its fold any pending appeal before the Tribunal. Strictly speaking therefore counsel for the petitioner may be correct in contendin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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