DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), CHANDIGARH, CHANDIGARH vs. UNIPRO TECHNO INFRASTRUCTURE PVT LTD, CHANDIGARH

Order PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC, Delhi dt. 14/09/2023 pertaining to Assessment Year 2016-17. 2. In the present appeal, the assessee has raised the following grounds of appeal:

at the time of hearing.

3. Briefly the facts of the case are that the assessee company filed its return of income for impugned assessment year on 28/02/2017 declaring total income of Rs. 2,87,50,940/- after claiming deduction under section 80IA of Rs. 7,47,55,843/-. The matter was selected for scrutiny and notice under section 143(2) and 142(1) were issued and after calling for necessary information, documentation from the assessee, the assessment proceedings were completed and order under section 143(3) dt. 13/12/2018 was passed by the AO whereby the AO has disallowed the claim of deduction under section 80IA amounting to Rs. 7,47,55,843/- and the assessed income was determined at Rs. 10,35,06,783/-. The AO further stated that in assessee’s own case for A.Y. 2011-12, 2012-13, 2014-15 and 2015-16, similar view has been taken by the Department and deduction under section 80IA has been accordingly disallowed.

4. Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A) who has allowed the appeal of the assessee following the order of the Tribunal in the earlier years. Against the said order of the Ld. CIT(A), the Revenue is in appeal before us.

5. During the course of hearing, the Ld. CIT/DR submitted that the Ld. CIT(A) has erred in allowing the deduction under section 80IA as the assessee was only involved in various projects as a Works Contractor and not as a developer. It was further submitted that the Ld. CIT(A) has followed the decision of the Tribunal for A.Y. 2011-12, 2012-13 and 2013-14 and these cases were related to revisionary proceedings under section 263 of the Act and in respect of such decisions, the Revenue is in further appeal before the Hon’ble High Court which are pending adjudication. In this regard, our reference was drawn to the findings of the Ld. CIT(A) which have been assailed by the Revenue and the contents thereof read as under:

“7.1 The contention of the Appellant, Grounds of appeal, the statement of facts, online submissions of the appellant the case laws relied upon and the assessment order have been considered carefully. The grounds of appeal number 1 to 4 pertain to the core issue of disallowance of deduction u/s 80IA to the assessee. The appellant has assailed the AO on denying the claim amounting to Rs. 7,47,55,843/- of deduction u/s 80IA of the Income Tax Act, 1961 on the plea that the assessee is a contractor not a developer. The appellant has claimed that orders of the AO are against the law and facts of the case on account of Judicial inconsistency as the cases of the assessee and its sister concern Kaveri Infrastructure Pvt. Ltd. JV Unipro Techno Infrastructure for the last many years are being assessed u/s 143(3) by different assessing officers treating the contracts as development contracts eligible for deduction u/s 80IA of the IT. Act, 1961 The appellant has further claimed that the issues are covered matters as Hon'ble ITAT has adjudicated the matter in favour of the assessee in the case of the appellant for its order u/s 263 for the A/Y 2011-12 and 2012-13 and in the case of sister concern of the assessee Kaveri Infrastructure Pvt Ltd. JV Unipro Techno Infrastructure U/s 143(3) for the A/Y 2012-13.The submission of the appellant is perused in the light of various case laws cited by the appellant and the case laws used by the AO while denying the deduction.

7.2 The Hon'ble ITAT, Chandigarh in appeal AY 2012-13 vide order dated 01.12.2017 has quashed the order passed u/s 263 dated 30.03.2017 by the Pr. CIT on the issue relating to grounds of appeal of the case.The relevant extract of the ITAT order dated 01.12.2017 is reproduced as under:- A) "5.2 Before parting, we may also refer to the decision of the Allahabad High Court in the case of CIT VsGoyal Private Family Specific Trust 1988) 171 ITR 698, 701-702 (All). A perusal of the said decision would show that the Court has held in unambiguous terms that merely because the orders of the Assessing Officer are brief and cryptic, the said fact by itself cannot be a ground for branding the assessment orders as erroneous and prejudicial to the interests of the Revenue. The Court was careful to observe that writing a detailed order no doubt may be a legal requirement, but the order not fulfilling this requirement, cannot be said to be erroneous and prejudicial to the interests of the Revenue. The Court in unambiguous terms has fastened the responsibility for exercising the Revisionary Power of the Commissioner to necessarily point out as to what error was committed by the Assessing Officer in having reached the conclusion which was sought to be set aside. The said effort was found to be missing in the facts of the said case as in the facts of the preset case also. In the facts of the present case, the Pr. CIT having failed to point out any error, let alone an error which is prejudicial to the interests of the Revenue as the necessary exercised for addressing the error has not been done, in the order nor has the Ld. CIT-DR been able to demonstrate that there were clauses and conditions in the Contracts entered into with Executive Engineer, IPH Dehra (HP), Executive Engineer Uttrakhand Peyjal Nigam, Construction Division, Rudraprayag and Executive Engineer, Uttrakhand Peyjal Nigam, Construction Division, Pauri vis-à-vis the contract entered into with Executive Engineer, IPH Thural (HP) on the basis of which they could not be said to be composite Infrastructure Development Contracts on a BOT basis with added responsibilities towards its maintenance for specific period. The order passed, accordingly for the detailed reasons given herein above is held to be arbitrary and the order is quashed. Accordingly the grounds raised are allowed.

6. In the result, appeal of the assessee is allowed. B) The relevant extract of the ITAT order dated 29.01.2020 in appellant M/s Unipro Techno Infrastructure Private Ltd.'s, own case for the AY 2013-14 against orders u/s 263 is reproduced as under :- "After considering the observation and objections made by the Ld. PCIT and in the light of the proposition laid down in the case laws, as discussed above, we find that neither the Ld PCIT could even point out how the fact and nature of the projects carried out during the year under consideration different from the projects earlier taken by the assessee which have already been held to be eligible for deduction u/s 80IA (4)of the Act being Infrastructure Facility Development Project nor the Ld. PCIT could point out from the clauses of the agreement that they would not fall within the definition of infrastructure development project as provided u/s 80IA(4) of the Act. In our view, the Ld. PCIT has exercised her jurisdiction u/s 263 of the Act totaling by passing and in contradiction of the findings given by the Tribunal in the own cases of the assessee for earlier assessment years i.e. 2011-12 and 2012-13 vide orders dated 6.2.2017 and 1.12.2017 (supra). Further, it is found that all the material was put before the Assessing Officer including the copies of the contracts. The Assessing officer has duly taken note of the nature of contact entered into by the assessee and held that the same were infrastructure facilities development contracts and eligible for deduction w/s 80IA of the Act. Hence, it cannot be said that the order passed by the Assessing Officer was erroneous or prejudicial to the interest of Revenue on this issue." C) The relevant extract of the ITAT order dated 13.10.2020 in appellant M/s Unipro Techno Infrastructure Private Ltd.'s, own case for the AY 2014-15 against orders u/s 143(3) is reproduced as under :- "

5. Ld. DR has not pointed out any distinguished fact for the assessment year under consideration.

6. Moreover, the deduction w/s 80 IA of the Act for the relevant projects i.e. "Thural" and "Dehra" has already been allowed in the earlier years and this year being a subsequent year, the findings arrived for the same project in earlier years will mutatis-mutandis apply to the subsequent assessment year also with the condition that the total number of years for claiming deduction will be subject to the other conditions relating to the time period of claiming deduction and percentage of the deduction as provided w/s 80IA of the Act. In view of the above discussion. The appeal of the assessee stands allowed.” D) The relevant extract of the ITAT order dated 23.12.2020 in appellant M/s Unipro Techno Infrastructure Private Ltd.s own case for the A.Y 2015-16 against orders u/s 143(3) is reproduced as under:-

We have considered the submissions of both the parties and pursued the material available on the record. It is noticed that a similar issue relating to the deduction under section 80IA of the Income Tax Act, 1961 (herein after referred to as 'Act') has already been decided by this bench of the tribunal in assessee's own case vide order dated 13.10.2020 in for the A.Y. 2014- 15 in assessee's own case wherein by following the earlier order Dt. 29.01.2020 in ITA No. 749/Chd/2018 for the A/Y 2013-14 in assessee's own case, the relevant findings have been given at page No 3 to 21 of the order Dt. 13.10.2020 which read as under…...... Para 7 Accordingly, we do not see any merit in this appeal of the department Para 8 In the result, appeal of the department is dismissed.

7.3 In view of the above. Since the issue raised in the appeal has been adjudicated by the Hon’ble ITAT in appellant’s favour in earlier assessment years, the disallowance made by the AO is not sustainable. Considering the facts of the case and following the order of Hon’ble ITAT in appellant’s own case in earlier assessment years, the appeal of the appellant is allowed.”

6. Per contra, the Ld. AR has supported the order so passed by the Ld. CIT(A). It was submitted that the matter is squarely covered by the various decisions of the Coordinate Benches in assessee’s own case for earlier assessment years which has been duly referred to by the Ld. CIT(A) while deleting the disallowance under section 80IA and allowing the necessary relief to the assessee. It was further submitted that the order so passed by the Coordinate Bench are not just in relation to revisionary proceedings but the issue on merits has already been discussed and in this regard, our reference was drawn to the order passed by the Coordinate Bench for A.Y. 2014-15 in ITA No. 1582/Chd/2018 and the relevant findings therein read as under:

“4. The brief facts relating to the issue are that the assessee is primarily engaged in developing / providing Lift Irrigation Scheme/ Lift Water Supply Scheme for different state governments. The assessee claims that the said development work carried out by the assessee falls within the definition and scope of Infrastructure development, maintenance and operation activity, hence, assessee is eligible for deduction u/s 80IA(4) of the Act. The assessee, had entered into agreements in earlier years for developing / providing Lift Irrigation Schemes / Lift Water Supply Scheme at different places with respective State Authorities such as Irrigation and Public Health Department of Himachal Pradesh Govt. and that of Govt. of Uttrakhand and also with Govt. of Rajasthan. Admittedly, the issue relating to the eligibility of the assessee to claim deduction u/s 80IA of the Act in respect of the above projects including similar types of other projects / contracts entered into by the assessee has already been considered by the Tribunal in the own case of the assessee for earlier assessment years. The Tribunal in identical circumstances though while adjudicating upon the action of the PCIT to invoke revision jurisdiction u/s 263 of the Act has already discussed the issue on merit also. The Tribunal in this respect has also relied on another decision of the Tribunal in the own case of the assessee for assessment years 2011-12 & 2012-13 also and after detailed discussions it has been held that the works carried out by the assessee fall with the scope and purview of infrastructure development facility eligible for deduction u/s 80IA of the Act. For the sake of completeness, the relevant part of the order dated 29.01.2020 of the Tribunal passed in for assessment year 2013-14 is reproduced as under:- “13. Before proceeding further it is pertinent to mention here that as per provisions of section 80IA(4), deduction has been allowed to an assessee who has entered into an agreement either with the Central or a State Government or a Local Body or any statutory body for – (i) Developing or (ii) Operating and maintaining or (iii) Developing, Operating and maintaining a new Infrastructure facility. The assessee, admittedly, had entered into nine agreements up to the year under consideration for developing / providing Lift Irrigation schemes/ Lift Water Supply Scheme with various State Authorities such as Irrigation and Public Health Deptt, of Himachal Pradesh Govt. and that of Govt. of Uttrakhand. The contracts were composite contracts requiring the assessee not only to develop facility but also to operate and maintain the facilities for specific number of years i.e. firstly, the development of project which would take 1 to 3 years and then to operate and maintain projects for one to five years. So far as the ‘Thural Project’ is concerned, the question as to whether the project developed by the assessee was an Infrastructure development project / contract awarded by the Government, came into consideration before this Tribunal in the appeal of the assessee for assessment year 2011-12 and the Tribunal after considering the facts and circumstances of the case held that the ‘Thural Project’ was developed by the assessee as per the composite contract awarded by the Government and would be eligible for deduction u/s 80IA(4) of the Income-tax Act. Then in the next year relevant to AY 2012-13, the assessee was awarded three more contracts of similar nature. The Ld. PCIT citing similar reasons as were given in her order for AY 2011- 12, exercised her jurisdiction u/s 263 of the Act and held that the Assessing Officer had not properly examined the issue as to whether the contracts entered into by the assessee in respect of the three new projects were Infrastructure Development contracts allowable for deduction u/s 80IA or the same were simple works contracts specifically excluded from the applicability under the provisions of section 80IA as per explanation to sub section (13)of section 80IA of the Act. The Tribunal discussed the matter in detail and vide order dated 6.2.2017 in ITA No.361/Chd/2016 for assessment year 2011-12 & also vide subsequent order dated 1.12.2017 (ITA No. 867/Chd/2017) for assessment year 2012-13 and held that the Ld. PCIT had failed to differentiate the nature of the other three projects from the ‘Thural Project’. After detailed discussion, the appeals of the assessee were allowed and the order of the Ld. PCIT u/s 263 of the Act was quashed. From the above facts, it comes out that the nature of the contracts and development activities of the assessee have been examined by the Tribunal and after extensive discussion, it has been held that the contract of the development of the said project was an infrastructure development contract and, hence, eligible for deduction u/s 80IA(4)of the Act. In the year under consideration, as per the Ld. PCIT, the assessee has been awarded five new contracts, however, the PCIT has not pointed out or discussed as to how the nature of theese five new development projects undertaken during the year was different from the nature / facts of the ‘Thural Project’ as carried out by the assessee in the assessment year 2011-12 when it was in its development stage. She had not discussed as to why findings of this Tribunal for assessment year 2011-12, which was in relation to the nature of the ‘Thural Project’ when it was in development stage, would not be applicable to the new projects undertaken. However, she has taken an entirely inappropriate and illogical plea that this year ‘Thural Project’ is entered into the fourth year and, thus, the activity carried out by the assessee for the year under consideration in respect of the ‘Thural Project’ is only operation and maintenance, therefore, the facts of the ‘Thural Project’ for the year under consideration are different from other projects. It is pertinent to mention here that the nature of the ‘Thural Project’ and the activity carried out by the assessee for the assessment year under consideration, when the ‘Thural Project’ is reached in its fourth year was not under consideration or adjudication by the Tribunal in respect of the appeal of the assessee for assessment year 2011-12 and even in the appeal for assessment year 2012-13, since, the ‘Thural Project’ in those years was in its developmental stage, hence, the Tribunal considering the nature of the contract held that it was an Infrastructure development project. Since the Ld. PCIT has not brought any differentiating or distinguishing fact about the development activity carried in the ‘Thural Project’ as compared to the other eight projects undertaken by the assessee, hence, under the circumstances, the findings arrived at by the Tribunal in respect of ‘Thural Project’ are squarely applicable to the other projects also. It is also pertinent to mention here that the nature of the other three projects which were started in the year 2012-13 has also came for consideration in the appeal of the assessee against the order passed u/s 263 of the PCIT and it has been specifically held that the Ld. PCIT had failed to point out any difference between the ‘Thural Project’ and the other three projects carried out by the assessee in the said year. However, again vide impugned order, the Ld. PCIT though, fully aware of the earlier findings of the Tribunal, yet, proceeded to pass the impugned order u/s 263 of the Act without brining any distinguishing fasts regarding the nature of the new contract when compared to the earlier four contracts carried out by the assessee. Moreover, the Ld. PCIT has held that the assessee is eligible for deduction in respect of the ‘Thural Project’ for the year under consideration being the fourth year of the project and that the assessee has to only operate and maintain the said infrastructure facility namely ‘Thural Project. By saying so, the Ld. PCIT herself has impliedly admitted that the ‘Thural Project’ is an Infrastructure Development Project and as per the provisions of section 80IA(4) of the Act, the deduction has been allowed for developing or Operating and maintaining or for Developing, Operating and maintaining a new project facility.

9. On perusal of the order of the learned Pr.CIT we find that the first reason for invoking revisionary powers under section 263 was that the Assessing Officer had not examined the claim of the assessee of deduction under section 80IA of the Act vis-avis the applicability of the Explanation to sub-section( 13) of section 80IA of the Act. The learned Pr. CIT has held that as per the aforesaid explanation to the section work contracts are not eligible for deduction under section 80IA(4) and apparently the project undertaken by the assessee is covered under the definition of "works contract". Moreover the Assessing Officer has not examined this aspect during the course of assessment and no verifications were made by the Assessing Officer, therefore, as per the learned Pr. CIT, the assessee has been wrongly allowed deduction of its profits under section 80IA(4) of the Act causing prejudice to the revenue. Before us Ld. counsel for the assessee made arguments challenging the jurisdiction of the Pr.CIT to invoke revisionary powers on this aspect as also on the merits of the claim of deduction under section 80IA(4). Challenging the assumption of jurisdiction of the learned Pr. CIT, the Ld. counsel of the assessee stated that this issue had been examined during assessment proceedings and the Assessing Officer, after due application of mind, had allowed the assessee's claim of deduction under section 80IA(4). The Ld. counsel for the assessee stated that review of the order was only on account of change of opinion and could not be exercised under section 263 of the Act. In support of its contention that the issue had been examined by the AO during assessment proceedings the Ld. counsel for the assessee drew our attention to the following: a) The return of income for the impugned year accompanied by Audit Report under section 80 IA in form No. 10 CCB on the basis of which deduction under section 80 IA was claimed by the assessee placed at paper book page No. 1 to 26 The questionnaire received from the Assessing Officer and the relevant b) queries raised at serial No. 5,6,7 and 11 of the same relating to the claim of the assessee under section 80 IA placed at paper book page No. 29 to 35. The relevant queries raised in the questionnaire are as follows:”

“5. As per information filed by you, it has seen that you had undertaken contract for providing lift water supply scheme from Executive Engineer, IPH and claimed this income as exempt u/s 80IA and got sub-contract from NKG Infra in which income is taxable. Please provide the complete details in this regard alongwith copy of contract with them. Please also provide details how you are eligible for exemption u/s 801A when you are conducting activities under contract.

6. You have also claim exemption amounting to Rs.52,35,708/- u/s 10(2A) and Rs.12, 11, 810/- u/s 80IA. Please provide the complete details in this regard alongwith documentary evidence.

A copy of agreement as sub contractor of NKG Infrastructure Ltd is also enclosed herewith.” d) Reply dated 29.08.2013 for the purpose of claim of deduction under section 80IA placed at paper book page 41 number. The relevant portion of the reply is as follows: “Please refer to the Assessment proceedings in the case of Unipro Techno Infrastructure Private Limited, SCO 36, Sector 7, Chandigarh for the A/Y 2011-12 PAN AACFU1025F. The information/documents asked for is as under; 2. The partnership firm of Unipro Techno Infrastructure was converted into private limited company with effect from 13.04.2010 with all its assets and liabilities with the same sales tax registration number. The deduction u/s 8Q1A was first claimed in the A/Y 2010-11. The-year under reference is the second year for claiming deduction u/s 801A. e) The order passed by the Assessing Officer dealing with the issue of 80IA at paras 3 to 4.2 of the order as follows placed at paper book page Nos. 44 to 52: “ 3. The case of the assessee selected under CASS with the reasons that "AO to examine the reasons & genuineness for high claim of refund out of TDS". When confronted, the assessee vide its reply dated 13.08.2013, has submitted that in the year 2011-12 a refund of Rs.10,47,850/- was claimed as a part of the income of the company amounting to Rs. 12,11,810/- was exempt u/s 80IA and TDS was deducted on the total receipt of the company, the excess amount of TDS deducted was claimed as refund.

04.08.2015 The reply to the notices issued under Section 133(6) of the Act by respondent no. 2 to the Irrigation Department, H.P. Government was received on 03.08.2015 from the Executive Engineer (I&PH) Division, H.P. Government, by the said respondent no. 2, in pursuance of which the case of the petitioner was fixed for 04.08.2015. The Assessing Officer i.e. respondent no: 2, passed the following order in favour of the petitioner which rendered the very initiation of reassessment proceedings for the assessment year in question including ' the subsequent year as illegal and totally without jurisdiction:- "Present: Sh. A.K. Sood, CA. The Id. Counsel again submits that proceedings u/s 148 need to be dropped as there was no non disclosure by the assessee. He has again been told that the case is being proceeded with on merit as the matter is one of interpretation of the Statute. The clarification received from the Executive Engineer, l&PH, Division Barsar, Distt. Hamirpur vide letter dt. 1/8/2016 in response to query u/s 133(6) is on record. Perusal of the same shows that the assessee was awarded the complete project contract on BOT basis and no other agency was involved in the same. The Id. Counsel has also cited CBDT Circular No. 10/2005 dt. 16.12.2005 which though specific to ports interprets Section 80IA as being applicable to projects/ structures built under BOT basis. Perusal of clarification received from i H.P. Govt. Deptt. and the language of the contract agreement shows that the activity of the assessee is not in the nature of works contract for the purposes of 80IA. It appears that the assessee has implemented an Infrastructure Project for the Govt. on a turnkey basis and has also been engaged in its operation and mgt. Such arrangement is typical to Infrastructure Development Project of the Govt. and cannot be seen as mere works contract. Case adjourned to 17.08.2015. Insp. to place copy of file notings on all files of connected relevant assessment years in the case."

The only reason for exercising revisiqnary powers under section 263 in the 14. present case is that the Assessing Officer had not examined the claim of the assessee to deduction under section 80IA(4) vis-a-vis Explanation 13 to the said section which excludes profits earned from works contracts from deduction under section 80IA(4) of the Act.

15. On this account we are unable to agree with the learned Pr. CIT. It is amply clear from the pleadings and documents placed before us by the Ld.Counsel for the assessee that the said issue was raised during assessment proceedings, due inquiries were made and after proper application of mind the Assessing Officer allowed the claim of the assessee.

5. At this stage, it would not be out of context to quote from the decision of the Gauhati High Court in the case of Bongaigaon Refinery and Petrochemical 287 ITR 120 (Gau) where the Court at page 131 para 17 and 18 held as under: "17. Entertainment of a view different from the one adopted by the Assessing Officer, if plausible would not clothe the Commissioner with the power to interfere therewith under the said provision of the Act. Differently put, an error within the jurisdiction of the Assessing Officer on an evaluation of the materials available would not be exposed to interference in exercise of suomotu revisional powers under section 263 of the Act. The provision though permits the Commissioner to initiate an enquiry as he may deem necessary does not authorise a roving probe into the facts with the disposition to pick out errors to sustain the eventual interference. This assumes great significance in the context of the statutory frame work of the Act outlining the jurisdictional contours of different authorities to adjudicate the issues as legislatively stipulated. The Commissioner in exercise of his revisional powers cannot arrogate to himself a status to surrogate the other authorities and supplant their roles under the Act.

18. The jurisdiction exercisable under section 263 of the Act being supervisory in nature, permitting suo motu review of any assessment already made, the statutorily enjoined sanctions circumscribing the same have to be rigorously construed. The legislative intendment of conditioning the plenitude of the power conferred is manifest in the two preconditions lodged in the section. To sustain the delicate balance between this supervisory and other remedial jurisdictions, as designed by the lawmakers, a constricted connotation and purport of the enabling prerequisites for the exercise of the revisional powers is an imperative necessity. 5.1 Thus, no doubt the power to set aside has been vested with the Pr. CIT. However, the power has to be exercised judiciously and fairly. The Revisionary order cannot be silent in the face of the challenge of the assessee that the Contracts are identical composite Infrastructure Development Contracts on BOT basis i.e. were trunkey projects where after initially setting up, the assessee was tasked with making it functional post completion operation and maintenance of the same for a specific period. The Contracts were available with the Pr. CIT and the stated claim of the assessee if it was found to have been incorrect, should have been demonstrated in the order itself. Even in the course of the arguments, ld. CIT-DR could not bring any fact to our notice in support of the order passed. The power vested by the Statute comes with onerous responsibilities which cannot be allowed to be shirked. The assessee in the facts of the present case is able to demonstrate that full facts were available on record on which enquiries have been made and the assessment order itself shows that the calculations carried out even though for the purposes of depreciation by the AO qua the exempted units and non-exempt units demonstrate that facts have been seen. In the face of these facts and arguments, the Pr. CIT should have referred to some error in the order passed after considering the new three contracts and the earlier continuing contract of Thural Project which is not so in the facts of the present case. Nor has the ld. CIT-DR pointed out to any such error. Accordingly, the arguments of the Ld. CIT-DR that no prejudice is caused to the assessee if the matter is restored to the assessing officer as the assessee would still be at liberty to reargue the entire case cannot be countenanced. Unless and until the Revenue demonstrates that the order has been passed without due and adequate enquiry or an error which is prejudicial to the interests of the Revenue is pointed out only then the order passed can be upheld. Merely because the assessee would have an opportunity available before the Assessing Officer once again cannot be said to be a justifiable reason for setting aside an assessment order. If the said argument is accepted, then each and every assessment order can be set aside as opportunity to the assessee is any way granted by the Rule of Law. 5.2 Before parting, we may also refer to the decision of the Allahabad High Court in the case of CIT Vs Goyal Private Family Specific Trust (1988) 171 ITR 698, 701-702 (All). A perusal of the said decision would show that the Court has held in unambiguous terms that merely because the orders of the Assessing Officer are brief and cryptic, the said fact by itself cannot be a ground for branding the assessment orders as erroneous and prejudicial to the interests of the Revenue. The Court was careful to observe that writing a detailed order no doubt may be a legal requirement, but the order not fulfilling this requirement, cannot be said to be erroneous and prejudicial to the interests of the Revenue. The Court in unambiguous terms has fastened the responsibility for exercising the Revisionary Power on the Commissioner to necessarily point out as to what error was committed by the Assessing Officer in having reached the conclusion which was sought to be set aside. The said effort was found to be missing in the facts of the said case as in the facts of the present case also. In the facts of the present case, the Pr. CIT having failed to point out any error, let alone an error which is prejudicial to the interests of the Revenue as the necessary exercise for addressing the error has not been done in the order nor has the ld. CIT-DR been able to demonstrate that there were clauses and conditions in the Contracts entered into with Executive Engineer, IPH Dehra (HP), Executive Engineer, Uttrakhand Peyjal Nigal, Construction Division, Rudraprayag and Executive Engineer, Uttrakhand Peyjal Nigam, Construction Division, Pauri vis-à-vis the contract entered into with Executive Engineer, IPH Thural (HP) on the basis of which they could not be said to be Composite Infrastructure Development Contracts on a BOT basis with added responsibilities towards its maintenance for specific period. The order passed, accordingly for the detailed reasons given herein above is held to be arbitrary and the order is quashed. Accordingly, the grounds raised

are allowed.

6. In the result, appeal of the assessee is allowed.

16. The Ld. PCIT vide impugned order has tried to distinguish between the ‘works contract’ and a ‘Development contract’ by holding that since the development of the projects in question was to be carried out by the assessee as per the specifications / designs approved by the Government, hence, it would fall within the definition of ‘works contract’ and not ‘Infrastructure Development contract’.

17. We have gone through the discussion made by the Ld. PCIT on this issue and also considered the arguments of the Ld. DR on this point. The observation of the Ld. PCIT that only if the project is to be developed by the assessee as per the specifications and designs approved by the Government that would fall in a definition of simple works contract and not a ‘Infrastructure Development Contract’ as provided u/s 80IA(4) of the Act, in our view, would disentitle each and every assessee who would carry out infrastructure development project in a contracts with a Union Government or State Government or Local Authority. Such / stated projects are to be carried out as per the term of the Government. However, what distinguishes and work contract from Infrastructure Development Contract’ as per section 11A of the Act is that whether the contract has been granted for a specific work or it is a development of a facility as a whole and whether day to day control on the project and its manner of development is of the Government authorities or of the contractor. The Coordinate Lucknow Bench of the Tribunal in the case of ‘M/s Vijay Infrastructure Limited, Lucknow vs ACIT’, & Others, order dated 30.10.2015 observed that if the assessee's duty is to develop infrastructure whether it involves construction of a particular item as agreed to in the agreement or not and that the agreement is not for a specific work, it is for development of facility as a whole, the material required is to be brought in by the assessee by sticking to the quality and quantity irrespective of the cost of such material. The assessee utilizes its funds, its expertise, its employees and takes the responsibility of developing the infrastructure facility, the losses suffered in the process of such development would be that of the assessee. The assessee hands over the developed infrastructure facility to the Government on completion of the development and if the assessee has to undertake maintenance of said infrastructure for a particular period and during the said period, if any damages are occurred, it shall be the responsibility of the assessee , then such a contract would fall within the purview and scope of Infrastructure Development contract. Even on the identical issue in relation to the development of the irrigation project, the ITAT Koltka Bench of the Tribunal in the case of ‘DCIT Kolkata vs M/s Simplex Projects Ltd, Kolkata’ ITA No. 169/Kol/2016 order dated 8.11.2017 has observed that irrigation project is as infrastructure facility within the scope of section 80IA(4) of the Act. The Tribunal further relied upon the decision in the own case of the aforesaid assessee i.e. Simplex – Subhash JV and M/s Somdatt Builders JV vide ITA No. 1684/Kol/2011 and 1685/Kol/2011 dated 8.6.2013, wherein, it has been observed that if the project is a turnkey project involving the activity of development of infrastructure facility, it will be an activity as provided u/s 80IA(4) of the Act. The Tribunal considered that a perusal of the turnkey contract agreement entered into by the assessee with the irrigation department clearly showed that the construction of all the structure of whole of the canal system was to be as per the approved design, drawings of the Department etc. Survey is to be done as per the investigation and drawing criteria of the Irrigation Department. The assessee has to procure the material independently and those materials are to be conformed to the specifications provided. The assessee has also to make arrangement for storage of the materials. The Tribunal held that such work carried out by the assessee would fall in the exclusion provided to the meaning of the ‘work’ given in the explanation to section 194C of the Act and it would also be out of the scope of ‘explanation to sub section (13) of section 80IA’. The Koltaka Bench of the Tribunal in the case of ‘Adhunik Infrasture (P) Ltd vs JCIT’ has also held that deduction u/s 80IA(4) cannot be denied to an assessee merely because the assessee has been paid by the Government for development work.

7. It was further submitted that following the said order, the Coordinate Bench in for A.Y. 2015-16 has again allowed the necessary relief to the assessee and appeal filed by the Revenue has been dismissed. It was accordingly submitted that where the Ld. CIT(A) has followed the decision of the Coordinate Benches wherein consistently, the claim of deduction under section 80IA has been allowed, there is no infirminity in the said order. It was submitted that mere fact that the Revenue has not accepted the decision of the Coordinate Benches and appeals are pending for necessary adjudication before Hon’ble High Court, the same cannot be a reason for not following the said decisions as the orders of the Coordinate Bench have neither been reversed nor stayed by the Hon’ble High Court. It was further submitted by the ld AR that there are no change in the facts and circumstances of the case, same contracts/projects are continuing during the year and the decision of the Coordinate Benches for the earlier years squarely applies to the fact of the present case. It was accordingly submitted that the appeal so filed by the Revenue be dismissed and the order of the Ld. CIT(A) be sustained.

Order pronounced in the open Court on 03/09/2024 परेश म. जोशी िव"म िसंह यादव (PARESH M. JOSHI) ( VIKRAM SINGH YADAV) "ाियक सद" / JUDICIAL MEMBER लेखा सद"/ ACCOUNTANT MEMBER