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TMI Blog2025 (2) TMI 834X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Government or for that matter any local authority. While Section 80IC (2) (a) does refer to the Central Government, the same is confined to the aspect of the manufactory having been set up pursuant to a scheme notified by that government. However, sub-clause (b) clearly avoids reference to any of those species of authorities. All that sub-clause (b) requires is for the undertaking to be engaged in the manufacture or production of any article or things specified in the Fourteenth Schedule and having commenced operations in the periods prescribed therein and in States of the Union mentioned therein. This must necessarily be contrasted with what obtains under Section 80IA (4) (i) (b) and where an agreement with the Central or State Government has been recognized as being a precondition for the purposes of claiming benefits under that provision itself. The Tribunal also appears to have clearly overlooked the fact that Rule 18BBB as well as Form 10CCB straddles more than one provision in the Act. As is evident from the title of that rule, it is intended to cater to varied enterprises and eligible businesses as envisaged in Sections 80I, 80IA, 80IB or 80IC. We are of the considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondents appear to have asserted that there was an evident failure on the part of the appellant to place on the record an agreement or approval that may have been granted to it by either a local or state authority. That prescription appears in Form 10CCB of the Income Tax Act, 1961 [Act]. In order to appreciate the stand which was taken by the respondents, we deem it apposite to extract Rule 18BBB and which reads as follows:- "18BBB. Form of Audit Report for Claiming Deduction under Section 80-I or Section 80IA or Section 80I-B or Section 80-IC (1) The report of the audit of the accounts of an assessee, which is required to be furnished under sub-section (7) of section 80-IA or sub-section (7) of section 80-I, except in the cases of multiplex theatres as defined in sub-section (7A) of section 80-IB or convention centres as defined in sub-section (7B) of section 80-IB [or hospitals in rural areas as defined in sub-section (11B) of section 80-IB], shall be in Form No. 10CCB. (2) A separate report is to be furnished by each undertaking or enterprise of the assessee claiming deduction under section 80-I or 80-IA or 80-IB [or 80-IC] and shall be accompanied by the Profit a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from whom approval is taken (attach copy of approval) : ---------------------------- ELIGIBLE BUSINESS UNDER SECTION 80-IA 14. Development, operation, maintenance of an infrastructure facility: (a) With respect to the infrastructure facility, does the enterprise (please tick): □Develop □ Operate and maintain, □ Develop, operate and maintain, the infrastructure facility. (b) Please specify the nature of the infrastructure facility*** [e.g., road, bridge, rail system, port, etc. [Explanation to section 80-IA(4)(i)]] : ---------------------------- (c) Has the operation and maintenance of the infrastructure facility been received on transfer from its developer in accordance with the agreement with the Central/State Government/local authority/any other statutory body □Yes □No (d) If yes, please specify the first year of claim of deduction under section 80-IA by the developer (Attach copy of Form 10CCB of developer) 15. Providing telecommunication services : (a) Please specify the nature of telecom service [e.g., basic telecom service, cellular service, etc. [Section 80-IA(4)(ii)]] : ------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial undertaking operate any cold storage plant □ Yes □ No (e) Please specify if the company is a small scale industrial undertaking □ Yes □ No (f) If the industry is located in the North Eastern Region, is the industry a notified industry as per second proviso to section 80-IB(4)? □ Yes □ No (g) If the industry is located in Jammu & Kashmir, does it manufacture or produce any article or thing specified in part 'C' of the Thirteenth Schedule? □ Yes □ No 19. Business of ship (a) Is the ship owned by an Indian company and wholly used for the business carried on by it □ Yes □ No (b) If the ship was acquired on transfer, was the ship owned or used in Indian territorial waters by a person resident in India □ Yes □ No 20. Business of hotel (a) Is the hotel located in (i) Hilly area (ii) Rural area (iii) Place of pilgrimage (iv) Other notified area (Please specify ------) (v) None of the above (Please specify ------) (b) Is the hotel approved by the prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; Yes □ No Eligible business under section 80-IC 25. (i) Whether the undertaking or enterprise is located in an area notified by the Board for the purposes of section 80-IC □ Yes □ No (ii) If yes, please indicate,- (a) Name of the Export Processing Zone/Integrated Infrastructure Development Centre/Industrial Growth Centre/Industrial Park/Estate/Software Technology Park/Industrial Area/Theme Park and the District/State in which located : ---------------------------- (b) Khasra No. of the undertaking or enterprise (Also indicate the Board's Notification No.) : ---------------------------- (c) If the eligible business is new, please give the date of commencement of production or manufacture of article or thing : ---------------------------- (d) If the existing business has undertaken substantial expansion, please specify,- : ---------------------------- (i) The date of substantial expansion : ---------------------------- (ii) The total book value of plant and machinery (before taking depreciation in any year) as on first day of the previous year in which substantial expansion took place. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ________ (Permanent Account Number or Aadhaar Number ________________) as at _______________and the profit and loss account of the said industrial undertaking or enterprise for the year ended on that date which are in agreement with the books of account maintained at the head office at _________________ and branches at *I/We have obtained all the information and explanations which to the best of *my/our knowledge and belief were necessary for the purposes of the audit, in *my/our opinion, proper books of account have been kept by the head office and the branches of the industrial undertaking or enterprise aforesaid visited by *me/us so far as appears from *my/our examination of books, and proper returns adequate for the purposes of audit have been received from branches not visited by *me/us, subject to the comments given below : In *my/our opinion the undertaking or enterprise satisfies the conditions stipulated in section 80-I/80-IA/80-IB/80-IC (strike out whichever is not applicable) and the amount of deduction claimed under this section in item 30 is as per the provisions of the Income-tax Act and meets the required conditions. In *my/our opinion and to the best of *m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its and gains from industrial undertakings or enterprises engaged in infrastructure development, etc. (4) This section applies to- (i) any enterprise carrying on the business of (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining any infrastructure facility which fulfils all the following conditions, namely:- (a) it is owned by a company registered in India or by a consortium of such companies or by an authority or a board or a corporation or any other body established or constituted under any Central or State Act; (b) it has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining a new infrastructure facility; (c) it has started or starts operating and maintaining the infrastructure facility on or after the 1st day of April, 1995: Provided that where an infrastructure facility is transferred on or after the 1st day of April, 1999 by an enterprise which developed such infrastructure facility (hereafter referred to in this section as the transferor enterprise) t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... industrial park or such special economic zone, as the case may be, to another undertaking (hereafter in this section referred to as the transferee undertaking), the deduction under sub-section (1) shall be allowed to such transferee undertaking for the remaining period in the ten consecutive assessment years as if the operation and maintenance were not so transferred to the transferee undertaking : Provided further that in the case of any undertaking which develops, develops and operates or maintains and operates an industrial park, the provisions of this clause shall have effect as if for the figures, letters and words "31st day of March, 2006", the figures, letters and words "31st day of March, 2011" had been substituted; (iv) an undertaking which,- (a) is set up in any part of India for the generation or generation and distribution of power if it begins to generate power at any time during the period beginning on the 1st day of April, 1993 and ending on the 31st day of March, 2017; (b) starts transmission or distribution by laying a network of new transmission or distribution lines at any time during the period beginning on the 1st day of April, 1999 and ending on the 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to an audit report which must accompany a claim for deduction under those family of provisions. 9. The requirement of an audit report is also found in Section 80IA(7) and which postulates that a deduction from profits and gains would not be admissible unless the accounts of the undertaking for the previous year for which the deduction is claimed have been audited by an accountant. That prescription by virtue of Section 80IC(7) also applies to a unit which claims deduction under that provision. 10. Till here there is perhaps no dispute between the contesting parties before us and insofar as the prescription of an audit report per se is concerned. The solitary question which arises is whether the audit report which would have to be submitted by an assessee claiming benefits under Section 80IC would also have to necessarily include an approval granted by the local or state authorities. This requirement finds mention in Clause 13 of Form 10CCB. 11. The Tribunal, while ruling on this aspect, has observed while taking into consideration the conclusions which were rendered by the Commissioner of Income-Tax (Appeals) [CIT (A)] as follows:- "4.9 On perusal of the above finding of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute of deduction under section 80-IC of the Act in accordance with law." 12. It is on the basis of its conclusion that the stipulation of an agreement with the Central/State government or local authority would have to necessarily accompany Form 10CCB, that it has proceeded to remit the matter for examination of the Assessing Officer [AO]. 13. We find that it has while framing that direction for remit clearly lost sight of the principal distinction between Sections 80IA and 80IC. As we view Section 80IC it becomes apparent that there is clearly no requirement of an entity which claims coverage under Section 80IC (2) (b) (ii) to have in place an agreement with either the Central or State Government or for that matter any local authority. 14. While Section 80IC (2) (a) does refer to the Central Government, the same is confined to the aspect of the manufactory having been set up pursuant to a scheme notified by that government. However, sub-clause (b) clearly avoids reference to any of those species of authorities. All that sub-clause (b) requires is for the undertaking to be engaged in the manufacture or production of any article or things specified in the Fourteenth Schedule and h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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