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TMI Blog2021 (2) TMI 1163X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Applicant in its furnace undertakings amount to 'generation of power' within the meaning of Sec. 80IA(4)(iv)(a) of the Act. 2) Whether the Applicant is eligible for deduction u/s 80IA in respect of its furnace undertaking on the profits and gains derived from generation of Power. 3) Whether the Applicant has rightly applied 'Profit Split Method' as the Most Appropriate Method for computing Arm's Length Price u/s 80IA(8) read with Sections 92F(ii), 92BA and 92C of the Act to determine the eligible deduction. 4) The Applicant craves to add, amend, modify or rescind any of the questions set out here in above, either before or during the course of hearing of this application. 2. The report of PCIT-2, Kolkata was received by vide letter dated 31.12.2020 and the only objection of the Department was in respect of pendency. It was submitted that the assessment year involved in the application filed before the Authority was A.Y. 2018-19 and A.Y. 2019-20. The Pr. CIT has reported that for the A.Y. 2018-19 the return was processed under section 143(1) by the CPC and scrutiny assessment shall be done by National E-Assessment Centre (NeAC). Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) Hyosung Corporation vs. AAR (382 ITR 371) (Delhi) iii) sage Publications Ltd, UK vs. DCIT, International Taxation (387 ITR 437) (Delhi). 4. We have carefully considered the objection of the Revenue, the submissions of the Applicant as well as the facts of the case. As per provision of section 245R(2) of the Act the application cannot be allowed if the following conditions as stipulated in the Proviso to that section are satisfied: Provided that the Authority shall not allow the application where the question raised in the application, - (i) is already pending before any income-tax authority or Appellate Tribunal [except in the case of a resident Applicant falling in sub-clause (iii) of clause (b) of section 245N] or any court; (ii) involves determination of fair market value of any property ; (iii) relates to a transaction or issue which is designed prima facie for the avoidance of income-tax [except in the case of a resident Applicant falling in sub-clause (iii) of clause (b) of section 245N or in the case of an Applicant falling in sub-clause (iiia) of clause (b) of section 245N] 5. The Revenue has submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Y. 2018-19 was initially selected for scrutiny on ten specific issues and one of the issue as appearing at S. No. vii was 'Deduction Claimed for Industrial Undertaking u/s 80IA/80IAB/80IAC/IB/IC/IBA/80ID/80IE/10A/10AA'. In the present application, the questions have been raised in respect of eligibility of deduction under section 80IA of the Act. It is thus found that the specific issue of deduction under section 80IA as raised in the present application was included in the reasons for which the case for A.Y. 2018-19 was selected for scrutiny vide notice under section 143(2) dated 22.09.2019. Thus, the question raised in the present application is found already pending before the Income-tax Authority. 7. The Applicant had relied upon the decision of Delhi High Court in the case of CIT-1 (International Taxation) Vs. Authority for Advance Ruling(supra). It is found that the notice under section 143(2) issued in that case was for the reason 'taxable income shown is revised return is less than the taxable income shown in the original return and large refund has been claimed'. However, the question pending in the application before the Authority was in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n nature. Further, the question raised in the application before the AAR was not forming the subject matter of the notice under Section 143(2) of the Act. ln the case of Sage Publications Ltd, U.K. (supra)also no specific question or issue was mentioned in the notice u/s 143(2) and the Hon'ble Court had held that such notice would be insufficient to attract automatic rejection of the application under proviso to section 245R(2) of the Act and the SLP filed against this decision was dismissed by the Apex Court. In that case, the Hon'ble High Court had observed as under: It is evident on a plain reading of the notice that it does not address itself to any specific question; it does not even disclose application of mind to the returns save and except the fact that they conform to the instructions which compelled the A.O. to issue a scrutiny notice on account of the international transactions reported by the assessee. 10. The facts of both Hyosung Corporation and Sage Publications are thus found to be different. In both the cases, neither any specific question was raised nor was the issue on which the case selected for scrutiny, mentioned in the notice u/s 143(2) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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