Whether Reporters of Local Papers may be allowed to see the judgment ?
To be referred to the Reporter or not ?
Whether their Lordships wish to see the fair copy of the judgment ?
Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ?
Whether it is to be circulated to the civil judge ?
========================================================= CREATIVE INFOCITY LTD - Petitioner(s) Versus UNDER SECRETARY (ITA-1) & 2 - Respondent(s) ========================================================= Appearance :
MR JP SHAH WITH MR MANISH J SHAH for Petitioner(s) : 1, MR SUDHIR M MEHTA for Respondent(s) : 1 - 2. MR PS CHAMPANERI for Respondent(s) :
3, ========================================================= CORAM :
HONOURABLE THE ACTING CHIEF JUSTICE MR.BHASKAR BHATTACHARYA and HONOURABLE MR.JUSTICE J.B.PARDIWALA Date : 21/02/2012 CAV JUDGMENT (Per : HONOURABLE THE ACTING CHIEF JUSTICE MR.BHASKAR BHATTACHARYA)
1. By this writ-application under Article 226 of the Constitution of India, the writ-petitioner has prayed for issue of a writ of mandamus or any other appropriate writ, order or direction, directing the Central Board of Direct Taxes ["Board"] to forthwith notify the petitioner's industrial park for benefits under Section 80-IA of the Income Tax Act, 1961 in terms of Rule 18C[4] of the Income Tax Rules, 1962 ["Rules"] without any further or other inquiry.
2. The following facts are not in dispute:
2.1 The petitioner applied for approval under Industrial Parks Scheme [IPS], 1999 through non-automatic approval route, where approval had been sought from Ministry of Commerce and Industry ["Commerce Ministry" for short] for claiming deduction under Section 80-IA[4][iii] of the Income Tax Act, 1961. There is no dispute that such approval for parks was given to the petitioner by the Commerce Ministry and the said approval has not either been revoked or withdrawn in any way until today. The petitioner, by a letter dated September 17, 2005 informed the Assistant Commissioner of Income Tax that the Commerce Ministry had granted approval to it by a letter dated June 21, 2001.
2.2 The Assistant Commissioner of Income Tax, however, by a letter dated November 17, 2005 requested the petitioner to reconcile different dates of commencement given to the Commerce Ministry. In reply thereto, the petitioner, by a letter dated December 9, 2005 informed the Assistant Commissioner of Income Tax that the time mentioned as "September, 2002" was a typographical mistake in the petitioner's earlier letter dated August 25, 2003 and the correct time to be read was "September, 2001". The petitioner had written another letter to the Assistant Commissioner of Income Tax, explaining why "September 2001" was stated to be the commencement of industrial park and further stated that even if it was presumed that industrial park had commenced after the release of electricity connection, the same was within financial year 2001-02.
2.3 Ultimately, the Deputy Commissioner of Income Tax, by a letter dated December 15, 2010 informed the petitioner about the outstanding arrears which had arisen because of the assessment done.
2.4 Being dissatisfied, the writ-petitioner has come up with the present application.
3. Mr.
J.P. Shah, learned counsel appearing with Mr. Manish J. Shah on behalf of the petitioner, has raised a pure question of law in support of this application.
4. According to learned counsel for the petitioner, the Central Board of Direct Taxes has no authority in delaying the grant of benefits under Section 80-IA of the Act of the industrial park to the petitioner by starting a second line of inquiry in spite of approval granted by the Commerce Ministry. In other words, according to the petitioner, the Board ought to have notified the industrial park on getting a copy of approval letter dated June 21, 2001 of the Commerce Ministry, which is annexed to the writ-application as Annexure: A.
5. In order to appreciate the aforesaid question, it will be profitable to refer to the provision contained in Rule 18C of the Income Tax Rules, 1962 which is quoted below:
"18C: Eligibility of Industrial Parks and Special Economic Zones for benefits under section 80-IA [iii]:-
[1] The undertaking shall begin to operate an industrial park during the period beginning on the 1st day of April, 1997, and ending on the 31st day of March, 2002.
[1A] The undertaking shall begin to develop or develop and operate or maintain and operate a special economic zone any time during the period beginning on the 1st day of April, 2001 and ending on 31st day of March, 2006.
[2] The undertaking shall be duly approved by the Ministry of Commerce and Industry in the Central Government under the scheme for industrial park or Special Economic Zones notified by that Ministry.
[3] The undertaking shall continue to fulfill the conditions envisaged in the scheme.
[4] On approval under sub-rule [2], the Central Board of Direct Taxes, shall notify industrial parks for benefits under section 80-IA."
6. A plain reading of the aforesaid provision makes it clear that the undertaking of the assessee should be at first duly approved by the Commerce Ministry under the Scheme of Industrial Parks or Special Economic Zones notified by the Ministry as provided in sub-rule [2]. Once such approval under sub-rule [2] is given, it is the duty of the Board to notify the industrial park for the benefits under Section 80-IA of the Act. Sub-rule [3], however, makes it mandatory that an undertaking should continue to fulfill the conditions envisaged in the Scheme.
7. Therefore, we find substance in the contention of Mr. Shah, the learned counsel appearing on behalf of the petitioner, that once approval is given by the Commerce Ministry to the petitioner in terms of sub-rule [2] of Rule 18C, the Board is duty bound to notify the industrial parks for benefits under Section 80-IA without any further investigation as to whether the petitioner has complied with the terms and conditions envisaged in the scheme. Since the power of grant of approval has been conferred upon the Commerce Ministry, in the absence of any express provision in the Rules, it should be presumed that the authority, which has given approval, has the power of revocation and examination of compliance of the conditions upon which the approval has been accorded. Therefore, it is the duty of the Commerce Ministry to decide whether an industrial undertaking is complying with the conditions envisaged in the scheme and if the undertaking fails to comply with those conditions, it is the Commerce Ministry alone, which has the right to withdraw the benefit granted under sub-rule [2] of Rule 18C of the Rules. As soon as the approval under sub-rule [2] of Rule 18C is given, it is obligatory on the part of the Central Board of Direct Taxes to notify industrial parks in terms of sub-rule [4] of Rule 18C.
8. In the case before us, there is no dispute that till today, the Commerce Ministry has not revoked the approval given in terms of sub-rule [2] of Rule 18C and thus, it is the duty of the Board to notify the industrial parks for the benefits under Section 80-IA of the Act.
9. It is, however, needless to mention that the moment the Commerce Ministry will revoke such approval, the petitioner will not get the benefits of Section 80-IA of the Act.
10. On consideration of the entire materials on record, we, therefore, find that it is a fit case where the petitioner is entitled to the relief claimed in the application. We, accordingly, direct the Central Board of Direct Taxes to notify the petitioner's industrial park for the benefits under Section 80-IA in terms of Rule 18C[[4] of the Rules within one month from today without any further inquiry. The above direction, however, is subject to the condition that if the Commerce Ministry revokes the approval already granted in terms of sub-rule[2] of Rule 18C, the petitioner will not be entitled to benefits under Section 80-IA of the Act.
11. We make it clear that within the narrow scope of this writ-application, we have not gone into the question whether the petitioner has complied with the conditions of grant of approval under sub-rule (2) of Rule 18C.
12. The writ-application, thus, is allowed. In the facts and circumstances of the case, however, there will be no order as to costs.
[BHASKAR BHATTACHARYA, ACTING CJ.] [J.B.PARDIWALA, J.] pirzada/-
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