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आदेश/Order
ITA No.447 to 449 & 793-794-c-18- M/s Altruist Technologies Pvt Ltd, Shimla 2
Per Bench:
The captioned appeals have been preferred by the Revenue against
the separate orders of the Commissioner of Income Tax (Appeals), Shimla
[hereinafter referred to as CIT(A)].
Before proceeding to adjudicate these appeals of the Revenue, it is
pertinent to mention here that the appeals of the assessee for the same
assessment years were heard on 08.08.2018 by the ‘A’ Bench of the
Tribunal, however, at that time it was not informed by the parties that the
appeals of the assessee for the same assessment years were also pending.
However, the issues in assessee appeals were different from the issues
involved in the present Revenue’s appeals, hence, as per the submissions
of both the Ld. representatives of the parties, these appeals of the Revenue
could be disposed of independent of the assessee’s appeals. Hence, we
proceed to adjudicate these appeals.
The common issue taken by the Revenue in all these appeals is
regarding the eligibility of the assessee in claiming deduction u/s 80IC of
the Act on the ground that the business activity of the assessee does not
fall under Schedule XIV of the Income-tax Act, 1961 (in short 'the Act').
Since this common issue is involved in all the appeals, therefore, these
have been heard together and are being disposed of by this common order.
ITA No. 447/Chd/2018 for assessment year 2010-11 is taken as a lead
case. The modified grounds taken by the Revenue reads as under:- 1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 21,70,58,065/- made by the Assessing officer by disallowing claim u/s 80IC, ignoring the fact that the
ITA No.447 to 449 & 793-794-c-18- M/s Altruist Technologies Pvt Ltd, Shimla 3
business activity of the assessee does not fall under schedule XIV of the Income-tax Act, 1961.
On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in holding that assessee is entitled for deduction u/s 80IC(2)(b) of the Income-tax Act, 1961.
It is prayed that the order of Ld. CIT(A) be set-aside and that of the Assessing officer restored
The appellant craves leave to add any other ground of appeal which may arise at the time of hearing.
The brief facts relevant to the issue are that assessee is engaged in
the business of Information and Communication Technology since
assessment year 2006-07. The assessee is functioning from two units’
i.e Unit -II and Unit-III. The assessee claimed deduction u/s 80IC of the
Act in respect of income from both the units, however, the Assessing
officer denied the same observing that assessee did not qualify for
exemption u/s 80IC of the Act. To properly adjudicate the issue, we
deem it fit to reproduce the relevant provisions of section 80IC of the Act,
which read are as under:-
“Special provisions in respect of certain undertakings or enterprises in certain special category States.
“80-IC. (1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (2), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains, as specified in sub-section (3).
Since interpretation of the statute (the Act) is involved, we deem it appropriate to reproduce the relevant clauses thereof:
“80-IC. (1) ………………….
This section applies to any undertaking or enterprise,-
ITA No.447 to 449 & 793-794-c-18- M/s Altruist Technologies Pvt Ltd, Shimla
(a) which has begun or begins to manufacture or produce any article or thing, not being any article or thing specified in the Thirteenth Schedule, or which manufactures or produces any article or thing, not being any article or thing specified in the Thirteenth Schedule and undertakes substantial expansion during the period beginning- (i) …………….. (ii) on the 7th day of January, 2003 and ending before the 1st day of April, 2012, in any Export Processing Zone or Integrated Infrastructure Development Centre or Industrial Growth Centre or Industrial Estate or Industrial Park or Software Technology Park or Industrial Area or Theme Park, as notified by the Board in accordance with the scheme framed and notified by the Central Government in this regard, in the State of Himachal Pradesh or the State of Uttaranchal;”
“(b) which has begun or begins to manufacture or produce any article or thing, specified in the Fourteenth Schedule or commences any operation specified in that Schedule, or which manufactures or produces any article or thing, specified in the Fourteenth Schedule or commences any operation specified in the Schedule and undertakes substantial expansion during the period beginning- (i) ……………. (ii) on the 7th day of January, 2003 and ending before the 1st day of April, 2012, in the State of Himachal Pradesh or the State of Uttaranchal;”
Relevant portion of the Schedule is extracted as under: “[THE FOURTEENTH SCHEDULE [See section 80-IC(2)] LIST OF ARTICLES OR THINGS OR OPERATIONS” “PART C FOR THE STATE OF HIMACHAL PRADESH AND THE STATE OF UTTARANCHAL
S.No. Activity or 4/6 digit Sub-clause ITC(HS) article or thing excise under NIC classifica- or operation classifica classificati tion 4/6 tion on on1998 digit 13 Information 84.71 300006/7 and communication Technology Industry, Computer hardware, Call Centre
ITA No.447 to 449 & 793-794-c-18- M/s Altruist Technologies Pvt Ltd, Shimla 5
The assessee claimed that it was covered by the item mentioned at
Sr.No.13 of Part ‘C’ of the XIV Schedule (as reproduced above) and
hence, was eligible for deduction u/s 80IC(2) of the Act. The Assessing
officer rejected the claim of deduction u/s 80IC of the Act holding that
the assessee had not obtained Central Excise 4/6 Digit Classification or
National Industrial Classification (NIC) code on 1998, stipulated at point
No. 13 and, hence, was not eligible for statutory deduction. The Ld.
CIT(A), however, reversed the order of the Assessing officer and held
that the assessee was entitled to deduction u/s 80IC of the Act while
relying upon the decision of the Hon'ble Jurisdictional High Court of
Himachal Pradesh in the own case of assessee in 2017 (8) TMI 1299
‘Altruist Technologies Pvt Ltd Vs. DCIT’, wherein, the Hon'ble High
Court in para 14 of the judgement has observed as under:-
“14. That the activity carried out by the Assessee falls in the categories specified in the category so mentioned at Sr. No.13 of the Schedule, is not in dispute. The only objection being that since the Assessee does not possess NIC code and Excise Classification, it is not entitled to the statutory deduction. It is here, we find the Assessing Officer to have committed grave illegality in correctly and completely construing the provisions of the Schedule. In fact, from the observations of the Assessing Officer, reproduced supra, it stands admitted that the code / classification, reproduced supra, is required only for such of those activities, which fall under the category of ‘manufacture’. Assessee is running a Call Centre. It does not deal with computer hardware or is in the business of manufacturing information and communication technology. It is not into the business of manufacture or production of any articles referred to in item at Sr. No.13. It carries out operation of such items, which do not require registration or necessitate obtaining permission under the provisions of the Central Excise Act or National Industrial (Activity) Classification, 1998, vis-à-vis Code 30006/7. Sub-class under NIC classification on 1998 at 30006/7 reads as under: “3006: Manufacture of complete digital systems comprising a central processing unit, an input unit and an output unit; digital
ITA No.447 to 449 & 793-794-c-18- M/s Altruist Technologies Pvt Ltd, Shimla 6
systems which include peripheral units such as additional input/output units, additional storage units etc.
30007: Manufacture of computer peripherals like magnetic disc/floppy/Winchester disk drives, magnetic tape/cassette/cartridge drives; punchy tape readers, curve followers, graph plotters: serial/daisy wheel/line printers. Data entry equipment with or without visual display; magnetic or optical readers; machines for transcribing data onto data media in coded form; and so forth.”
Now, if the Assessee is otherwise not subjected to any of the provisions of the Statute, Rules, Notifications, circulars, under the said provisions, and when it does not relate to the activity of operations, so carried out by him, that of running a Call Centre, for which, in any event, the aforesaid provisions are not applicable, then obviously it would be incorrect and illegal to read the provisions relating to the code into the expression “Call Centre”, which is an activity, totally distinct and separate from “manufacture” or “production of information and communication technology”. It is in this backdrop, we find the Assessing Officer to have erred in forming its opinion/reason to believe that the Assessee, was not entitled to statutory deductions. The interpretation is perverse, resulting into travesty of justice.”
Since the issue is squarely covered by the decision of the Hon'ble
Jurisdictional High Court and Ld. DR could not point out any
distinguishing decision, hence, we do not find any infirmity in the order
of the CIT(A) while relying upon the decision of the Hon'ble High Court
of Himachal Pradesh (supra) on this issue.
There is no merit in the appeals of the Revenue and, hence, the same
therefore, dismissed.
The issue being common in all the captioned appeals, hence, all these
appeals of the Revenue are hereby dismissed. Order pronounced in the Open Court on 16.11.2018
Sd/- Sd/- (अ�नपूणा� गु�ता / ANNAPURNA GUPTA) (संजय गग� / SANJAY GARG) लेखा सद�य/ Accountant Member �या�यक सद�य/ Judicial Member Dated : 16.11.2018
ITA No.447 to 449 & 793-794-c-18- M/s Altruist Technologies Pvt Ltd, Shimla 7
“आर.के.”
आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File
आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar