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Income Tax Appellate Tribunal, DELHI BENCH : SMC : NEW DELHI
Before: SHRI R.S. SYAL
(Appellant) (Respondent) Assessee by : Shri Somil Agarwal, CA Deptt. By : Shri Amrit Lal, Sr.DR Date of Hearing : 05.06.2017 Date of Pronouncement: 06.06.2017 ORDER
This appeal by the Revenue is directed against the order passed by the CIT(A) on 19.10.2015 in relation to Assessment Year 2012-13.
The only issue raised in this appeal is against the allowing of deduction u/s 80IC of the Income-tax Act, 1961 (hereinafter also called ‘the Act’).
Succinctly, the facts relating to this issue are that the assessee is engaged in the business of running a hotel in the name and style of M/s Vishnu Palace, Library, Gandhi Chowk, Mussoorie. Deduction u/s 80IC was claimed by the assessee in respect of the income earned from this hotel.
The Assessing Officer did not allow the deduction as, in his opinion, the necessary condition for allowing the deduction, being the engagement in ecotourism, was failing. The ld. CIT(A) deleted the addition and restored the claim of deduction u/s 80IC by relying on the order passed by the Tribunal in the case of Shri Bidhi Chand Singhal vs. ITO, Rudrapur, holding that if No objection from Pollution Department is obtained, it would satisfy the condition of ecotourism. The ld. CIT(A) also relied on another order of the Tribunal in Aanchal Hotel Pvt. Ltd. vs. ACIT, holding that in the absence of any material to show that the Pollution Department of the Government had not given NOC, the deduction would be available to the assessee. The Revenue is aggrieved against the deletion of disallowance of deduction u/s 80IC of the Act.
I have heard the rival submissions and perused the relevant material on record. The ld. CIT(A) relied on the decision in the case of Aanchal Hotels (supra) for deleting the disallowance. Such decision came up for consideration before the Hon'ble jurisdictional High Court in Aanchal Hotels Pvt. Ltd. (2016) 287 CTR 233 (UK). Setting aside the order passed by the Tribunal, the Hon'ble High Court has held that mere obtaining of NOC from Pollution Department would not justify the claim of deduction u/s 80IC. The following observations of the Hon'ble jurisdictional High Court merit mention :-
`We are at a loss as to how it can be itself done away in order to provide for deduction to a hotel, which is merely engaged in tourism and not Ecotourism. In other words, we are of the view that in the setting in which Entry 15 of 14th Schedule appears, it should yield the following result. Only hotels, which were setup as Ecotourism units or having set up as Ecotourism or units, were expanded as such, would be entitled to the benefit of 80-IC. We would think that the soul of the provision is Ecotourism. Various forms, in which Ecotourism may be practised and operated, are enumerated after the general word “Ecotourism”. The activities mentioned specifically must share one common feature, i.e., they must be pursued as part of Ecotourism. This in our humble view is the interpretation, which would do justice to the words, the context and object of the statute. Certainly, the mere procurement of a No Objection from the Pollution Control Board cannot be determinative of a question, whether the hotel fulfills the requirement under Section 80-IC of the Act. …. By no means, can this be the sole determinant of the question, as to whether the hotel is engaged in Ecotourism.’
Eventually, the Hon'ble High Court has restored the matter to the Assessing Officer for fresh adjudication. As the impugned order is based on the Tribunal order in the case of Anchal Hotels Pvt. Ltd. (supra), which has been set aside by the Hon'ble jurisdictional High Court, respectfully following the precedent, I set aside the impugned order and remit the matter to the file of Assessing Officer for rendering a fresh decision in the light of the guidelines laid down by the Hon'ble High Court in its judgment.
Before parting with this issue, I would like to refer to the contention of the ld. AR that for the immediately succeeding assessment year also the AO denied the deduction, which was allowed by the ld. CIT(A) after considering the above referred judgment of the Hon'ble High Court and obtaining the remand report from the Assessing Officer. A document was placed on record, being the reply given by the Central Public Information Officer, Income-tax Department, Dehradun, indicating that no appeal was filed by the Revenue against this order. It was, ergo, contended that the deduction be allowed on the basis of the view taken in the succeeding year.
I cannot accept the assessee’s contention for affirming the impugned order simply on the basis of the order passed by the ld. CIT(A) for the succeeding year. A fact which is relevant to note is that in the remand proceedings also, the Assessing Officer did not accept the assessee’s contention about the eligibility for deduction u/s 80IC. It was the ld. CIT(A), who deleted the disallowance after considering the submissions advanced on behalf of the assessee. As regards the non-filing of appeal by the Revenue against the order of the ld. CIT(A) for the succeeding year is concerned, it is worth noting that such order of the ld. CIT(A) is dated 27.02.2017 and the information given by the CPIO, ITO, Dehradun is dated 30.05.2017. A period of only three months has elapsed from the date of the order passed by the ld. CIT(A) and there are no fetters on the powers of the Revenue in filing the appeal a little belatedly as well. Without going into the merits of the case for the assessment year 2013-14 and restricting myself only to the facts for the instant year, I restore the matter to the file of Assessing Officer for a fresh decision in terms of the judgment of the Hon'ble jurisdictional High Court in the case of Aanchal Hotels Pvt. Ltd. (supra).
In the result, the appeal filed by the Revenue is allowed for statistical purposes. The decision was pronounced in the open court on 06th June, 2017.