If Benefit Granted U/s 80IC I-T Act For Substantial Expansion In 1st Year Is Not Altered, Same Issue Cannot Be Revisited In Subsequent Year: Calcutta HC

Update: 2023-08-31 14:30 GMT

While allowing the taxpayer’s claim for 100% deduction under Section 80-IC of Income Tax Act and setting aside the revision order passed under Section 263, the Calcutta High Court held that since 100% deduction under Section 80-IC was granted for the initial AY, being the first year of substantial expansion, after conducting a detailed enquiry and examining all the documents, Revenue has no jurisdiction to revisit the claim in subsequent years.

The Division Bench comprising of Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya observed that “As long as the benefit granted under Section 80IC for the first year of substantial expansion remains unaltered, the assessing officer would have no jurisdiction to revisit the same issue in the subsequent assessment years”.

Senior Advocate J.P. Khaitan appeared for the Assessee, while Revenue was represented by Advocate Prithu Dudheria.

The brief facts of the case were that the Assessee claimed deduction under Section 80-IC for AY 2013-14 in the second year of substantial expansion, which was allowed by the Revenue. Subsequently, PCIT passed the revision order under Section 263 holding that the assessment order is erroneous so far as it is prejudicial to the interest of revenue on the ground that Revenue has not made any enquiry to ascertain the genuineness of Assessee’s claim regarding substantial expansion. The PCIT allowed only 30% deduction under Section 80-IC (3)(ii) on the ground that the Assessee claimed the deduction without filing Form 10CCB for the relevant AY. The ITAT also upheld the Revisional order because Assessee failed to substantiate that the Revenue examined the facts while framing the Assessment order since Form 10CCB for the relevant AY was not filed during the assessment or Revision proceedings.

After considering the submission, the Bench found that the ITAT has rejected Assessee’s appeal solely on the ground that the Assessee had not filed Form 10CCB without considering that Revenue did not call for Form 10CCB during assessment.

The Bench further found that the ITAT failed to notice the crucial and important fact that the relevant AY is the second year of substantial expansion and Assessee’s claim for deduction at 100% for the first year of substantial expansion, i.e. preceding AY 2012-13 was accepted by the Revenue after conducting a detailed enquiry and examining all the documents.

Thus, concurring with Assessee’s contention that as long as the benefit granted under Section 80IC for the first year of substantial expansion remains unaltered, the Revenue would have no jurisdiction to revisit the same issue during assessment for the relevant AY.

Accordingly, the High Court allowed the deduction of 30% even in the absence of Form 10CCB.

Cause Title: C & E Limited v. Principal Commissioner of Income Tax

Click here to read/download the Judgment 


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