Income Tax Appellate Tribunal - Delhi
Dy. Commissioner Of Income Tax, Circle, ... vs Synergy Waste Management Private ... on 20 December, 2024
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'G', NEW DELHI
Before Sh. Satbeer Singh Godara, Judicial Member
&
Sh. S. Rifaur Rahman, Accountant Member
ITA No. 3557/Del/2023 : Asstt. Year : 2017-18
DCIT, Vs Synergy Waste Management Pvt.
Circle, Ltd., #168, Sector-27-28, Hisar,
Hisar, Haryana-125001 Haryana-125001
(APPELLANT) (RESPONDENT)
PAN No. AAICS9088H
Assessee by : Sh. S. K. Gupta, CA
Revenue by : Sh. Sahil Kumar Bansal, Sr. DR
Date of Hearing: 12.12.2024 Date of Pronouncement: 20.12.2024
ORDER
Per Satbeer Singh Godara, Judicial Member:
This Revenue' s appeal for Assessment Year 2017-18, arises against the C IT(A)/NFAC, Delhi's D IN & order No. ITBA/NFAC/S/250/2023-24/105727025(1) dated 20.10.2023, in proceedings u/s 143(3) of the Income Tax Ac t, 1961 (in short "The Act").
2. Heard both the p arties at length. Case file perused.
3. The Revenue's r aises the fo llowing revised substantive grounds in the instant appeal:
"1 . W het he r Ld . CI T (A ) er r ed in ad m it t in g t h e -a pp ea l of t he as s es s es by c o ns id er ing his s u b m i s s io n t hat i ss u e in th e pr ec ed in g y e a rs ha s be e n d ec id ed in fa v o ur o f a s s es s ee a t hi ghe r a p p ea l f o r um , w it h o u t c on s id e rin g t h e fact s t hat dep a rt m e n t has c h a lle ng ed t h e d e c is io n o f t h e I T AT b ef or e H o n 'b l e P& H H i gh c our t on t h e s am e is s u e fo r t h e A .Y . 2 0 1 2 - 13 a nd A. Y . 2 01 3 -1 4 w h ic h i s p e nd in g f or a dj ud ic a t i on as o n da t e. I n t h e A.Y . 2 00 9 -1 0 a nd A.Y . 2 0 1 0 -1 1 a ls o d ep a r t m ent c ha lle nge d t he o r d er o f 1 T AT b e fo re H on ' b le P& H H igh C o urt 2 ITA No. 3557/Del/2023 Synergy Waste Management Pvt. Ltd.
bu t d u e t o re v is e d m o ne ta ry li mi t v id e C BD T 's c ir c u l ar N o . 17 /20 19 d a t ed 0 8.0 8 .2 01 9 d ep ar t m e n ta l a p p e als w er e w i t hd r a w n la t e r o n. I n t he A.Y . 201 1 -1 2 a nd A. Y. 2 0 14 - 15 du e t o low ta x ef f ec t ap p e a l w e re no t fi l ed b ef o r e H o n' b le P &H H igh Co ur t .
2. W het he r L d. CI T (A ) er r ed b y n ot c o ns id e r ing t he fa cts t ha t a s p er t he ex pl a na t io n t o s ec t i on 8 01 A ( 4 ) of t h e Ac t , de f init io n o f in fra s t ruc t ur e m ea ns ' S o lid W as t e Ma na g em ent Sy s t em ' . T h e Bi o - M ed ic a l W as t e T re atm e nt p la n t of t h e a ss e s s e e d o es no t c om e w it h i n t he m ea n in g o f ' S o l id W a s t e Ma na ge m e nt Sys t e m' . It is no w h e r e m e nt io ned i n t h e pr ov is i ons o f s e c t io n 8 0 I A (4 ) o f t h e Ac t t ha t t he Bi o - m ed i c al wa s t e t r ea t m ent c om es un d e r t h e ' So li d W as t e Ma na g em ent Sy s t em ' .
3. W het he r L d . C I T (A) e r re d in no t c o nf e rr i n g t h e s t a nd o f t he re ve nu e as it is o n e o f t he e ss e nt ia l c o nd it io ns o f t h e Ac t t ha t t he as s es s e e e nt er s int o a n a gr ee me nt w it h t he C en t ra l G ov t. , o r t he St a le Go vt . , o r loc a l bo d y o r an y o t he r s ta t u t o ry b od y f o r c a r ry ing o ut inf ras t r uc t u re fac i lit ie s . W it h o ut c o m p ly ing w it h t hes e c o nd it ion s , t h e ass e s s e e c a n not be a llo w ed t o e nj oy ded u c t io n u/s 8 0I A . I n t h e ins t a nt c as e , a ss e s s e e ha s n ot e nt e r ed int o s uc h a gr e e me nt w it h (c e nt r al G ov t. , St a t e Go vt ., o r an y o t he r s t at ut o r y b o dy no r c op y of a gre em e nt fu r nis h ed by a ss es s ee f u lf ill t he r eq u ir em e nt o f s ec t i on 80 I A(4 ) o f t h e Ac t as p e r d e ta il ed d is c us s i on he ld b y t he AO d ur i ng a s s es s me nt .
4. W het he r Ld . CI T ( A) er r ed i n n ot a dm itt in g v er s io n o f t he AO t ha t t he a ss es s es is n eit he r c a r ry ing o n no r e nga ged in t h e b us in es s o f ( i) D e v e lo p i ng o r ( i i) O p e ra t in g & m a i nt a ini n g of (iii) de ve lo p ing , o p e ra t ing an d m a i nt a ini ng a ny inf ra s tr uc t u r a l fa c ilit y a nd n ot en te r ed i nt o a g r e em ent w i t h t h e C e nt ra l G ov t. , S t a l e G o vt ., o r L oc al a ut h o r it ie s o r a ny ot he r s ta t ut o ry bo d y f o r p ro v id in g s uc h fa c ili t ies . T h e c o nd it i ons s t ip u la t e d in s e c t io n 8 0 I A( 4 ) of t he Act r e ma in ed un fu lf ille d a s as s es s e s is on ly e ng age d i n t h e b us in es s o f t r ea t i n g b io m e d ic a l w a s t e w h ic h is n ot in fr as t r uc t ur al fac ili t y a s d ef i ned i n ex p la n a t io n t o s ub s e c t io n 4 o f s ec t i on 8 0I A .
5. W h et he r Ld . C I T( A) er r e d and fai l ed t o a pp r ec ia t e t h e v ers i on o f t h e AO w h o a ft e r el ab o rat e d is c us s io n, h e ld t ha t r ec e ipts o f s upp l y of ma t e ria l d id no t q u ali f y for d ed uc t io n u/s 8 0I A(4 ) a nd a s s es s ed a s n o rm a l b us i n es s i nc om e . A O du r in g a s s es s m ent c onc l u d e d t ha t ac t iv it y o f s up p ly of m at er ia l is n ot i nc lu de d in t he obj ec t s o f t h e a s s es se e.
6 W het he r I d. C I T (A ) e r r ed and fai led t o ap p r ec ia t e t o t he fac t s t ha t , as s es s e e ha s in v es t ed Rs . 2 C r o re i n p l ants lo c at ed a l L uc k no w, M ee r u t, D e lhi a nd G ur g a o n as pe r ba la nc e s hee t a n d s eq u enc e o f eve nts , am oun t o f in v es tm ent in p la n t a nd m ac hin er y an d nat ur e o f p la nt a nd m ac hi ner y c r eat es d oubt fo r e lig ib ili ty for d e d uc t ion u /s 8 0 1 A (4 ) o f th e Ac t . As p e r p ro v is io ns of s ec t i on 80 I A (4 ) o f t he Ac t , t h e a ss e s s e e s ho u ld b e i n t he b us i n es s o f e it h er ' d ev e l op i ng' o r ' o p e rat e a n d m a in ta in ' o f ' in fr as t ruc t u re fac ili t y' . C ar e f ul 3 ITA No. 3557/Del/2023 Synergy Waste Management Pvt. Ltd.
r ea d in g o f s ec t io n 80I A( 4 ) of t h e Ac t s ho w s t h at w o rd 'D ev e l o p i n g' i nc l ud es hu ge i nv es t m e nt s uc h a s c r ea t in g of in fra s t r uc t ur e , r oa d s etc . Suc h s t r uc t ur es w o u ld b e inc ap ab le o f i ns t a ll ing a t s om e ot h er p lac e b y u n -i ns t al li n g f r o m pr ev io us loc a t io n a nd t ra ns po rt ing t o n ew l oc a t io n. B ut in t h e c as e of a s s es s e e , t h e m ac h ine ry ins t a l le d is l ik e inc in er at o r, a ut o c lav e a nd m ic ro w a ve s y s t em s are m a n ufac t ur ed m ac h i ne ry w hic h is c a p ab l e o f un- ins ta lla t io n, tr a ns p o rta t io n a nd ins t a l ling a t s o me o t h e r p lac e ."
4. Suffice to say, the Revenue's first substantive grievance herein challenges correctness of the CIT(A)/NFAC's lower appellate find ings ho lding the assessee as eligible for Section 80IA(4) deduction which was disallowed by the As sessing Officer in his as sessment order dated 27.12.2019 to the tune of Rs.22,70,690/- thereby holding that the same would not be entitled for the relief here in.
5. We note in this factual backdrop that the instant issue of the assessee's section 80 IA(4) deduction claim entitlement is a recurring one between the parties. And the tribunal's last order dated 07.02.2023 in departmental appeal IT A Nos. 5701 to 5704/Del/2016, in assessment years 2011-12 to 2013-14, has upheld the assessee's claim as under:
11. On careful cons ider ati on of the abo ve rival submissi ons , first of all, we may poi nt out that the as sess ee filed wri tten submiss ions bef ore the ld.CIT(A) explai ni ng the reason for no n-filing/non-upl oadi ng the ret urn o f income wit hi n t he pr escribe d tim e limit for filing the return u/s 139(1 ) o f the Act whic h read a s follows :-
"Sir,
1) The c ompany has been filing all its r et urns i.e. Inco me Ta x ,TDS etc withi n t he statut ory d ue dates as is clear from the followi ng rec ords:
As s es s m e nt Y ea r D at e of f illi n g I nc o me Ta x R et ur n Due Date 200 6 - 07 20 .1 1 .2 0 0 6 30 . 1 1 . 20 0 6 200 7 - 08 29 .1 0 .2 0 0 7 31 . 1 0 . 20 0 7 200 8 - 09 25 .0 9 .2 0 0 8 30 . 0 9 . 20 0 8 200 9 - 10 29 .0 9 .2 0 0 9 30 . 0 9 . 20 0 9 201 0 - 11 28 .0 9 .2 0 1 0 30 . 0 9 . 20 1 0 4 ITA No. 3557/Del/2023 Synergy Waste Management Pvt. Ltd.
201 1 - 12 29 .0 9 .2 0 1 1 30 . 0 9 . 20 1 1 201 2 - 13 12 .1 0 .2 0 1 2 30 . 0 9 . 20 1 2
2) The turnover of the c ompa ny has a lso inc reas ed from 2.87 Crores in 2005-06 to 11.91 Cror es in 2011-
12 due to Joi nt efforts of a ll its ma na gement, empl oye es and all other rela ted pers ons .
3) During t he y ear under consideration als o the ass esse e got all its accounts audit ed before the due date. The fi nal Computation of Inco me was a ls o prepare d & the c omplete amount of ta x due on self ass essment i.e. Rs. 558280 was paid on 27.09.2012. The digital signature of Direc tor i.e. S h. Dheera j Aggarwal r equired for filling the return were a lso obtai ne d on 26th Sept 2012.
Thus t he ret urn was compl ete i n all respec t along with Tax on 27.09.20 12 & was gi ven to the c ompany 's cons ulta nt/C .A . for fil ling on 27.09.2012. The r etur n was uploaded /s aid to be uploa ded by the Tax Pra ctitio ner o n 28th S ept ember as c onfirmed on phone.
In our c ase all the formalities like pr epari ng the Bala nce She et, A udit Report u/s 44AB,115JB & Sec 80IB wer e c ompleted wel l before time i. e. 25.09.2012. Tax was als o depos ited a nd di gital signatur es re newed by 27t h S ep. 2012 As per the CA 'The r etur n of the par ty was upl oa ded on 28th S ept 2012, there was s ome pr oblem i n the Internet as well as D epartmenta l Si te hence we were frequently fac ing er ror i n uplo adi ng many ret urn a nd 'Server Time Out ' mess age wa s appea ri ng many times a nd when we tri ed to Logi n agai n t o file the return the message was app eari ng ' You hav e already filed the return so pl eas e sele ct the Revi sed Option ' i n many cas es. So in suc h cases we ha d to go to my retur ns col um n & downl oad the a ckno wl edgment from t here whic h c omes protect ed with passwo rd i.e. (PAN+ DOI) in s mall fonts.
With all this internet & site problems we uploaded the return of Synergy Waste Ma nagement Pvt . Ltd. on 29.09.2012 and dow nl oaded the ac knowledgement of the return but we c ould not open it as it was not acc epti ng the pa ss word so with the fa ir belief a nd confidenc e tha t we ca n downl oad the r eturn acknowl edgem ent a ny time from the department sit e, we proc eeded with our other returns a nd even confirmed the party on their t el ephoni c enquiry t ha t 5 ITA No. 3557/Del/2023 Synergy Waste Management Pvt. Ltd.
Yes y our return has bee n filed/upl oaded and you ca n take pri nt out from our of fi ce a ny time.
Al l the Tax Audit/Company Audit r eturns were uploaded from our syst em by 8 p.m. on 30th S eptember, 2012 a nd only two no n Ta x A udi t return of t wo ne arly clos ed/not in r unni ng busi ness compa ni es were upl oaded on 1st October , 2012.
To our shoc k/gr eatest sur prise when t he par ty ca me to collect the acknowl edgement on 07.10.2012 we ca me to k now tha t t he stat us is appeari ng as 'No Recor ds' found Then after all the disc us sion/inquiries with CP C Bangl ore etc. we again uploa ded the ret urn on 12.10.2012. ' Neithe r the a ss es see nor the C ounsel was a wa re t hat the return wa s not uploaded, there was no t a si ngl e reason for not filing the retur n i n time as per the provisions of s ec 139(1), 30th S ept 2012 was a Sunday hence the due date was extended to 01.10.2012, so if t he omissio n would have be en noticed, the Counsel co uld ha ve filed the r et ur n on 01.10.2012 als o.
You are ki ndly reques ted to condone the dela y in filing the retur n a s the assessee has compl eted all the for mal ities f or filing t he r etur n & it was j ust omitted to be uploaded by t he ass essee's c ouns el due to s ome tec hnical error/c onfusi on.
12. The ld.C IT(A ) ha s granted relief to the as s essee by obs ervi ng that the contentions of the appella nt that it was pr ev ented by sufficient caus e f rom fili ng the r eturn withi n the time spec ifi ed was a cc epted wit h the following obs erv ati ons a nd fi ndi ngs:-
"3 .3. Fr om t he per us al of fac ts in the c as e of the appella nt, it is appare nt that claim u/s 80IA has not bee n allowed to the ap pellant on a cco unt of t he fac t tha t t he return of inco me ha s not been filed as per the time allo wed for filing origi na l return of i nco me as per secti o n 139(1) of the Income Tax Act, 1961. Ho wever, appella nt has explained t hat it was on ac co unt of techni c al reasons that t he r eturn of i nc ome was not uploaded i n t he s ystem when t he a ppellant attempt ed to uploa d the same on 29.09.2012 i.e. withi n the time allowed to file retur n of inc ome u/s 139(1). The appe llant demo nstrated before me t hat they hav e filed returns for A Y 2006-07 to AY 2011-12 withi n time allowed for filing of r eturn and well withi n 6 ITA No. 3557/Del/2023 Synergy Waste Management Pvt. Ltd.
the due date . Appellant ha s stat ed that final computa tion of inc ome was pre pared a nd self as sessment tax due of Rs. 5,58,280/- wa s paid on 27.09.2012. The digital signatur e of Direct or i.e. Sh. Dheeraj Aggarwal require d for filling the return were als o obtai ned on 2 6.09.2012. The r eturn alongwi th tax was gi ven t o the c ompa ny's cons ul ta nt/C .A. for filling on 27.09.2 012. The r etur n was uploaded /sai d to be uploaded by the Tax Prac ti tioner on 28th September as c onfirmed on phone. Appella nt has stat ed that all the formalities like preparati on of Balanc e S heet, Audit R eport u/s 44AB, 115JB & Secti on 80IB were c ompleted before 25.09.2012. The appella nt has st ated tha t their CA infor med them t ha t "the ret urn of the party was upl oa ded on 28th S ept 2012, ther e was s ome problem i n t he Int ernet as well as D epa rt mental Site hence we were frequently fa ci ng err or i n uploa di ng many return a nd 'S erv er Time Out' mess age wa s a ppea ri ng ma ny ti mes a nd w hen we tr ied to L ogi n a gain to file the return the mess age was appea ri ng 'You ha ve a lrea dy filed the return so please s elect the Re vised Option ' in ma ny cas es . So in s uc h cases we had to go to my ret urns c ol umn & downl oad the ac knowl edgment fr om t here whic h comes protecte d wit h pa ss wor d i.e. (PA N+ DOI ) i n small fonts. "
3.4 The a ppellant has sta ted tha t with int ernet & site pr oblems, t hey uploaded the retur n of Synergy Waste Ma na geme nt Pvt . L td. on 29.09.2012 and downl oaded the ack nowl edgem ent of the ret urn. Ho wever, they could no t open the acknowl edgement as it was not accepti ng t he pass word. The a ppell ant has st ated that with the fai r belief a nd co nfidenc e tha t t hey ca n downl oad the re turn acknowl edgement a ny time fr om the depa rtment site, they pr oceeded with their other returns. The appellant has s tat ed t hat they ev en got co nfi rma tion t hat thei r return ha s been filed and uploaded from t heir CA. However, on 07.10.2012, on tryi ng to obtai n ac knowl edgement, their status a ppe ared as 'N o R ec ords ' found. After enquir y with CPC Ba ngalor e, t he return was agai n upl oa ded o n 12.10.2012, 3.5 The a ppel lant has furnis hed c opies of 'C omputation of Total Inc ome for AY 2012- 13', c opy of auditor's r eport which is signed dated 29.08.2012, Annexure to the A udit Re port which is s i gned 29.08.2012. The Anne xure i ncl udes bala nc e s heet a nd stat ements of Prof it & L oss acc o unts dul y verifi ed by the Audit ors a nd the ma na gement . Copy of Form N o. 3CA si gned and dat ed 25.09.2012, Annex ure to the 7 ITA No. 3557/Del/2023 Synergy Waste Management Pvt. Ltd.
Form No. 3CA si gned by direc tor of the compa ny a nd ma nagement dated 25.09.2012, co py of F orm N o. 10CCB which is also s igned a nd dat ed 25.09.2012, Form No. 29B signed and dated 25.09.2012. The appella nt has also furnished c opy of Form No. 26 AS ev idenci ng pay me nt of taxes (s elf as sess ment ta x) on 27.09.2012.From the abov e ev idenc es furnis he d, the contentions of t he appellant t hat it wa s pr event ed by sufficient ca use from filing of re turn withi n ti me spec ified is accepted. T he order of the AO u/s 143(1) of t he I.T. Act disal lowi ng claim for deduc ti on u/s 80IA on ac count of the fac t t hat return of i nc ome w as not filed is set aside a nd the cl aim made by the appella nt in its return of i nc ome shall be c onsidered allowa ble s ubject to exa mi na ti on of the clai m for deduction u/s 80IA on merits , if a ny , by the Ass es si ng Officer duri ng any ot her pr oceedi ng as per pr ovis ions of this Act."
13. No w, we fi nd it appropria te t o c onsi der the decisi on r elied upon by the ld. Counsel of the ass ess ee in the cas e of Dalmia Power Ltd. (supr a). In t his judgement , their Lordships has hel d that t he D epar tment was to consider the revised ret urn filed by the ass es see bey ond the pr escri bed time limit a fter ta ki ng i nto ac co unt t he s che me o f a mal gama tion a s sa ncti oned by NC LT. Fro m the j udgement r elied upon by the ld. Couns el of the assessee in the c ase of S. Se vugan C hettiar (s upr a), we obs erv e t hat the Hon'ble Hi gh C ourt of Ma dras has held that where defa ul t i n complyi ng the requirement was due to circ umstances beyond the control o f the asses se e, t hen, the as sess ee c ould not hav e been deni ed t he benefit of exempti on u/s 10(1 0C) of the Act.
14. In the prese nt ca se, it is a peculiar situation t hat the return of the as sess ee fo r A Y 2012-13 was proc ess ed by CPC, Bengal uru and the i ntimation u/s 143(1)(a ) of the Act was rec eived by the asse ssee informing the deni al of clai m of exempti on u/s 80IA of the Act on ac co unt of non-filing of the ret urn withi n the presc ri bed ti me limit a s per section 139(1 ) of the Act. We are in agre ement wi th the c ont enti on of the ld. C ouns el tha t in this pr oc ess unde rta ke n by the CPC, the ass ess ee was not provided oppor tunity of bei ng hea rd as it was a mec ha nic al proc ess and t he assessee s hould get an opportunity to explain the caus e for not filing t he return withi n the prescribed time limit bef ore the ld.CI T(A). On bei ng as ked by t he Bench, the ld. Sr. DR did not contro vert t he fac tual pos ition that for AY 2012-13, the balanc e s heet of the as sessee was s igned on 29.08.2012, report i n 10CCD was o btai ned from the 8 ITA No. 3557/Del/2023 Synergy Waste Management Pvt. Ltd.
audit or o n 25.09.2 012, Form No . 29B for MAT u/s 115JB was si gned by the auditor on 25.0 9.2012, Audit r eport u/s 44AB was si gned by t he a uditor on 25.09.2012 and the S elf as sessment t ax of Rs. 5,5 8,280/- was paid on 27/28.09.2012. The a ssessee has al so file d the a ffida vit of Mr. As hok Kumar G oy al, CA (Hisar ) depos ed on 17.11.2021 stating the fa ct ual posi tion of no n-uploadi ng the return bef ore the prescribed time limit, but, it was not filed before the authoriti es below.
15. No w, we proc eed to c onsider t he or der o f the ITAT, Na gpur B enc h (A T e-C ourt, Pune) in the cas e of Kr ushi Vibhag Karmc hari Vrund Saha kari Pat Sans tha v s. ITO (s upra) wher ei n the c oordina te B enc h of the Tr ibunal, after c onside ring t he p rovisions of sec tion 80AC of the Act a nd c onsideri ng t he j udgem ents of t he Hon'bl e Supreme Court i n the cas e of C IT vs . GM Knitting Indus tri es Pvt. Ltd., (s upra ) a nd PCI T vs . Wipro L td. , 446 ITR 1 (SC) hel d as follows:
"5 . I have heard both the sides and sca nned thr ough the rel evant mat erial on record. It i s a n undis puted fac t t hat the ass essee di d not fil e return of inc ome for t he year under co nsiderati on either origina lly or purs uant to notice u/s 148. C omputa tion of income was fil ed during the course of assess ment proc eedi ngs in whic h the deducti on u/s 80P was c laimed. Whereas , the aut horities bel ow ha ve ca nvassed a vi ew that the as sess ee violated s ection 80A(5 ) a nd henc e the deduc tion was not available; the ass es se e has ma de out a case that s ecti on 80A(5) does not a pply where no ret urn is furnishe d and r ather it is s ecti on 80AC whi ch woul d gov ern the case a nd beca us e of omiss ion of s ection 80P i n the list of s ections given i n s ecti on 80AC, the deduction s houl d be gra nt ed. In order to appr eciate the cont ention of the l d. AR , it would be apposite to re pr oduce section 80AC, befor e i ts substituti o n by the Fi na nce Act , 2 018 w. e.f 1 .4.2018, whic h reads a s under :
" Where in computing the t otal income of an ass ess ee of any prev i ous yea r releva nt t o the a ss essme nt y ear commenc ing on the 1st day of April, 2006 or any subsequent as ses sment y ea r, a ny deduc tion is admissible under secti on 80-IA or sec ti on 80- IAB or s ection 80-IB or secti on 80-IC or s ecti on 80- ID or s ection 80-IE, no s uch deducti on s hall be allowed to hi m unl ess he furnishe s a return of his inc ome for such ass essment yea r o n or before the due da te specified under s ub-section (1 ) of s ection 139."9 ITA No. 3557/Del/2023
Synergy Waste Management Pvt. Ltd.
6. O n going through t he abov e provis ion, it is crys tallized that t he requireme nt of fil ing r eturn before the time u/s 139(1) is sine qua non for claiming deduc tion under t he s ix s ecti ons (80-IA o r 80- IAB or 80-IB or 80-IC or 80-ID or 80 -IE). In other words, i f a ret urn is fil ed belat edly u/s 139(4) or under a ny o ther sec tion, claimi ng deduc ti on under any of t he s ix sec tions, the writ of the s ection 80AC will oper ate to prev ent its granti ng. This section does not deal wi th granti ng or non-granting of deductio n under a ny other sec tions of Part C of Cha pter VI-A, includi ng s ecti on 80P. Thus , t o i nfer t hat si nc e s ection 80AC does not cover s ecti on 80P, the latter secti on is immune from a ny ot her s tat utory requi r ement, is wholly i nc orrect. In fac t, secti on 80AC is alien to deducti on under a ny sec tion exc ept the specifi ed six sec tions.
7. Now, I t ur n to s ecti on 80A(5), which has been press ed into serv ice by the A O for denyi ng the benefit of deduc tion u/s 80P of t he Ac t, which runs as under:
`Wher e the asses se e fa ils to make a cl aim in his retur n of inc ome f or a ny deduction under secti on 10A o r s ec tion 10AA or s ecti on 10B or section 10BA or under any prov ision of this Cha pter under the headi ng "C.-- Deductions in respect of c ertai n income s", no deduc ti on shall be allo wed to him t hereunder.'
8. This s ec tion provides that whe re an ass ess ee fails to ma ke a claim i n his return of i ncom e for any deduc tion, amo ngst others , the s ecti ons enshrined in Par t C to C hapter V I-A (i ncludi ng secti on 80P a nd six s ec tions a s given i n secti on 8 0AC), then the deduc ti on s hall not be allowed. A perus al of the ma ndate of s ection 80A(5) div ul ges that the claimi ng of deduc ti on under vari ous s ec tions of par t C of C hapter VI-A i n the return of inc ome is esse ntial . The refer ence in this prov ision is only to retur n of i ncome, without a ny furthe r qualificati on. The retur n ma y be u/s 139(1) or 139(4) or any ot her releva nt s ecti on.
9. On a conj oi nt readi ng of secti ons 80A(5) a nd 80AC, it gets manifest t hat clai ming of deduction under va rio us sec tions of Part C of Cha pter VI-A in the r etur n o f inc ome is es sential. However, a n a dditiona l require ment for claiming deduc tion under sections 80-IA or 80-IA B or 80-IB or 80-I C or 80-ID or 80 -IE is t ha t s uc h deduc tion mus t be cl aimed i n a return filed u/s 139(1) of t he A ct. In one se nse, sec tion 80AC is an excepti on t o s ec tion 80A(5), maki ng the mandat e of the l atter s ecti on more stri ngent i n the prescribed c as es . Wher eas other deduc tions of Part C of C hapt er V I-A , incl uding s ec tion 10 ITA No. 3557/Del/2023 Synergy Waste Management Pvt. Ltd.
80P, can be cla i med i n t he return filed under any sec tion, i ncl udi ng sec ti on 139(4 ); the six deducti ons as ref erred to i n section 80AC must necessari ly be claimed in the return filed u/s 139(1) onl y. Ex consequenti , the contention tha t s ince s ection 80P is not c ov ered under s ec tion 80AC, the d educ tion under this s ec ti on bec omes a utomati cally allowabl e without a dhering to the requirement of s ection 80A(5 ), i s bereft of forc e a nd henc e dismissed.
10. Now I advert to the requirements of s ecti on 80A(5), whic h stipulates that no deducti on under ot her s ectio ns incl udi ng 80P s hall be allowed if the as s ess ee fai ls to ma ke s uc h a clai m in the re turn of incom e. Thus , ther e are twi n co ndi tions , viz., first, cla iming ded uction u/s 80P and sec ond, cl aiming suc h deduc tion i n the return of inc ome. Ther e is no dispute on the first c ondition, whi ch has been satisfie d in thi s case a s the ass ess ee did c laim the deduction albeit during the course of ass es sment proc eedi ngs. The whol e c ontrov ersy rev olves around the sec ond c ondition, whic h s ays that the cla im should be made i n the r eturn of i ncome. The as s ess ee in the extant c as e did not file a ny return of income, but ma de a c laim of t he deduc ti on i n computa tion of i nc ome filed duri ng t he cour s e of the a ss essme nt pr oceedi ngs. The moo t questi on is whether the requi rement of ma king a claim in the return of i nc ome i s a ma ndator y or a directory requirement. If i t is held as mandatory , then the claim must be ma de in the return of inc ome, failing whic h the bene fi t of deductio n woul d be los t. Au contraire, if it is hel d as directory , t hen the claim ma de eit her in t he return of income or i n any manner before the c onclusi on of ass essment proceedi ngs, a s is the c as e under c onsidera tion, would validate the entitle ment.
11. T he Hon'ble S upre me C ourt i n CIT vs . G.M. Knitti ng Indus tri es (P.) Ltd. (2015) 376 ITR 456 (SC) c ame ac ros s a situation i n whic h the ass essee c lai med additi onal deprec i ation i n Form 3AA but the Form was not fur nished along with the r eturn of i ncome. S uch Form was s ubmi tted d uri ng the c ourse of as sessment proc eedi ngs. The AO denied the claim on t he gr ound t hat the Form 3AA was requi r ed to be statutorily filed along with the return of income. The view of t he A O was rev ers ed by the Tribunal as well as the H on'ble Hi gh Court by holdi ng that e ven if t he Form was filed duri ng the course of assessm ent proceedings, it amounted to sufficient c ompl iance. The Hon'ble Supr eme C ourt , ta ki ng note of the judgm ent i n CIT Vs . Shiva nand El ectro nics (1994) 209 ITR 63 (Bom), approve d the view of t he Hon'ble Hi gh Court havi ng the effect t hat the requirement of fi ling Form 3AA was a nec ess ary 11 ITA No. 3557/Del/2023 Synergy Waste Management Pvt. Ltd.
ingredient for claiming additi onal depreciati on, but the ti ming of filing the Form was a directo ry requirement, whic h was fulfilled on filing it even duri ng the c ours e of as sessment proc eedi ngs . The Hon'ble B ombay Hi gh Court in Shivanand Electronics (s upra) dealt wi th the requirement of fil ing a udit report for the purpos e of claiming deduc tio n u/s 80J, which req ui red that the report shoul d be filed "along with return of i nc ome'' under s . 80J(6A ). It held that suc h requi rement of filing the a udit repo rt along with the return of i nc ome was not ma ndatory , but di rect ory i n the s ense that if as sess ee complied wi th t he sa me before c ompl eti on of as sessment , deduc tion under s . 80J, on the basis of s uch report, was allowa ble.
12. Rece ntly, the Ho n'ble S upreme Court was c onfronted with t he claim o f benefit u/s 10B in Pr. CIT vs. Wi pro Limited (2022) 446 ITR 1 (SC ). The ass es see furnis hed ori gi nal return ta king t he benefit of secti on 10B a nd did not carry forwa rd the loss. Therea fte r, a revis ed return was filed fore goi ng the claim of deducti on u/s 10B. The AO r eject ed t he withdra wal of exemptio n under S ection 10B by holdi ng that assessee di d not fur nish the nec essary declara tion i n writing before due da te of filing ret urn of income , whic h was a n essential requirement for not cl aimi ng the benefit of s ecti on 10B. The Hon'ble High Court deci ded the issue i n fa vour o f the as sess ee by holdi ng that the r equi r eme nt of filing the declara tion was ma ndatory but filing it along wit h the r eturn of i nc ome u/s 139(1 ) was a directory r equireme nt. The mat ter was br ought by the R evenue before the H on'bl e Supreme C ourt. The assessee, i nter alia, r elied on the judgment of the Apex Co urt i n G.M. K nitti ng Industries (s upra). Their Lords hips held that the r equirement of filing the repor t i n s upport of deduction u/s 10B was not a direc tory but a manda tory requir ement . It furthe r hel d tha t bo th t he c onditions of - filing the dec larati o n and filing it before the time limit u/s 139(1 ) - were ma ndatory and had t o be cumula tiv ely satisfi ed. Rej ecti ng t he relianc e on G.M. Knitti ng Industries (s upra), the Hon'ble S upreme C ourt held t hat t hat decisi on was rel eva nt in the cont ext of deduc ti on prov isions a nd not the e xempti on pr ovis ions as given under C ha pt er III of the Act. As the H on'ble Summit Court in Wipro Li mited (s upra) was deali ng wit h s ec tion 10B, fall ing under Cha pter II I of the Act, it held qua G.M. K nitti ng Indus tri es (supra) that: `Therefore, the said decision s hall not be appli cable to the facts of the case on ha nd, whil e considering t he exempti on prov isions. Ev en ot herwis e, C ha pter III a nd Chapter VI- A of t he Ac t op era te i n diff erent real ms and pri nciples of C hapter II I, whi ch dea ls with "inc omes whic h do not 12 ITA No. 3557/Del/2023 Synergy Waste Management Pvt. Ltd.
form a part of total i ncom e", ca nnot be equated with mechanis m provided for ded uctions in C hapter VI- A, which deals with "deduc tions t o be made i n c omputi ng to tal i nc ome". Ther efor e, no ne of the decisions whi ch are relied upon on beha lf of t he a ss ess ee on inte rpretation of C ha pter V I-A sha ll be applicable whil e consideri ng the claim under S ecti on 10B (8 ) of the IT Act.'
13. On going t hrough the j udgments in G.M. Knitti ng Indus tri es (s up ra ) in juxtapositio n to Wipr o Limited (s upra), the pri ncipl e whic h emer ges is that the fulfillme nt of requirement o f ma king a c laim for exemption under the rel evant sec ti ons of C ha pt er III in the return of i nc ome is ma nda tory, but when it com es to the cl aim of a deducti o n, i nter alia, under the rele vant sec tions of C ha pter VI-A , s uc h requirem ent be comes directory. In the l atter cas e, the ma king of a clai m ev en after t he filing of ret urn but bef ore c ompleti ng the as sessment , meets t he directory requirement of ma ki ng a claim i n the ret urn of income . The instant cas e involv es deduc ti on u/s 80P and hence , would be gov erned by the pri nciple laid down i n G.M. Knitting Indus tri es (supra), as per whic h the ma ki ng of a claim of deduc tion is ma ndat ory but t he timi ng is direc to ry. Even if the claim is made duri ng the c ours e of ass ess ment proc eedi ngs, suc h a cl aim has to be a llowed. I n view of the f oregoi ng discussio n, I am sati sfi ed that the aut horities below were not j ustifi ed i n rejecti ng the as sess ee's claim of deduction u/s 80P only on the ground tha t s uc h a claim was not mad e i n the return but duri ng the cours e of assessment proceedi ngs . The impugned order is ergo set asi de and t he ma tter is remitted to t he file of t he A O for exami ni ng the claim of deduc tion u/s 80P on merits .
16. In vi ew of t he foregoi ng, first o f all, from the prop ositi on rendered by ITA T, P une Benc h i n the ca se Krushi Vibhag Karmc ha ri Vrund S aha kari Pat Sanstha vs . ITO (supra), we respect fully note t hat the c oordi na te Bench of the Tribunal, a fter consideri ng the pr opos iti on rend er ed by the H on'ble S uprem e C ourt i n t he cas es of G.M. K nitti ng Industries (s upra ) a nd Wipro Ltd. (s upra) held that the Chapter III and C hapter VI-A of the Act ope rate i n dif fere nt realms a nd pri nci ples of c hapter II I, whic h deals with 'i nc omes which did not fo rm par t of to tal i nc ome' c a nnot be equat ed wi th mec ha nism prov ided for deduc tions in C hapter V I-A whic h de als wit h 'deducti ons to be made i n c omputi ng the total i ncome .' Ther efore, it was held that the f ulfillment of requirement for ma ki ng a claim of exem pti on under the relev a nt sec tions of C hapter III i n t he return of i nc ome is 13 ITA No. 3557/Del/2023 Synergy Waste Management Pvt. Ltd.
ma ndatory , but, when it comes to the claim of a deduc tion, i nter alia, under the rel evant s ec tion o f C hapter VI-A, s uch re quireme nt bec ome direct ory. In a case wher e the as sessee claims deduc tion under Chapter VI-A of the Ac t, the ma ki ng of a cl ai m ev en a fter filing of return, but , before completion of the ass es sment proc eedi ngs and passing of assess ment order meets the directory requirement of maki ng a claim i n the r eturn of inc ome.
17. In the pres ent case, t he ass es see is claiming deduc tion u/s 80I A of the Act which was dis allowed by the A O/CPC und er i ntim ati on u/s 143(1) of t he Ac t. Aggriev ed, t he ass ess ee car ried the ma tt er before the ld. Firs t app ellate authorit y a nd t he ld.CIT(A), a fter consideri ng the totality of the facts a nd circumstances of the cas e, first of all, observed t hat the a ppellant furnished c opi es of the computation of t otal i ncome, copy of auditor's report si gned on 29.08.2012, Annexures to audi t report si gned on 29.08.2012, whi ch incl udes bala nce s heet and sta tement of P rofit & L oss Account duly verifi ed by the a uditors and the ma nagement . It is also not i n dispute that the c opy of Form-3CA, annexure to t he Fo rm-3CA si gned by the Direct or of the c ompa ny a nd ma nagement, c opy of f orm 10CCB, c opy of form 29B were si gned on 25.09.2012. It was also obs erve d by the ld.CIT(A ) that t he ass es s ee has als o furnished c opy o f For m N o.26AS evidenci ng the pay ment of tax (s elf ass ess ment t ax) on 27.09.2012. Ther eafter, the ld.C IT(A) not ed tha t the appellant was prev ented by sufficient ca us e fro m fil ing the r eturn withi n the prescri bed time limit u/s 139(1) of the A ct. Ther efore, the expla nati on was found plausible and ac cepted by the l d.CIT (A). The ld.C IT(A) fi nally held tha t the order of C PC /AO u/s 143(1) of the Act disal lowi ng c laim u/s 80IA on a cc ount of the f act t hat the retur n of i nc ome was not filed withi n the presc ribed ti me limit wa s set a side a nd the claim made by the appella nt i n the r eturn of i ncom e was allowed s ubject to exami nati on of cl ai m for deducti on u/s 80IA of t he Act by the AO.
18. No w, the grieva nce of t he R eve nue in this a ppeal is tha t the ld.CIT(A) ha s wrongl y held that t he ass ess ee is entitled to claim deducti on u/s 80IA(4) of the Act, bec a use, the cl aim was not made i n t he r eturn of i nc ome filed wit hi n t he presc ribed ti me limit provided u/s 139(1 ) of the Ac t. At the cos t of repetition, we may point out tha t i n the pres ent ca se, t he a ssesse e is claimi ng deduc tion u/s 80IA of the Ac t, therefore, the s ame would be go verned by the pr opos ition re nder ed by the Hon'bl e Supreme Co urt in the cas e of G.M. Knitti ng Industries 14 ITA No. 3557/Del/2023 Synergy Waste Management Pvt. Ltd.
Pv t. Ltd. (supra), as per whic h the maki ng o f a claim of deduc tion is mandatory, but, timing is direct ory . Even if the claim is made duri ng the assess ment proceedi ngs , such a claim is to be allo wed. In vi e w of the a bove, we are i nclined to hol d t hat t he A O was not ri ght i n hol ding tha t the ass essee is not entitled to claim deduction u/s 80IA(4 ) of the Act o n ac count of bel ated filing of r eturn bey ond the prescribed time l imit u/s 139(1) of the A ct. The ld.C IT(A) wa s j us tifi ed a nd co rrec t i n holdi ng t hat the ass ess ee is entitled t o cl aim deducti on u/s 80IA(4 ) of the Ac t as it was prev ented by suffici ent c ause in filing the return of i ncom e withi n the pres cribed time limit. In vi ew of t he propositi on rendered by the Ho n'bl e S upreme Court i n the ca se of G.M. K nitting Indus tri es Pvt. Ltd. (s upra ), the cl aim of the ass es s ee has r eached to a hi ghe r pedestal beca us e the Hon' bl e Supreme C ourt has cate gorically held tha t fo r ma ki ng a claim under Chapt er V I-A of the Act whic h also incl udes prov ision of de duction u/s 80 IA of the Act a nd the ma ki ng of suc h claim for deducti on is permis sible even after filing of t he retur n, but , before compl eti ng the as sessment meets directory requirement i n the filing of ret urn of i nc ome.
19. In the pr es ent cas e, howev er, the ret urn of i nc ome of the as s ess ee for A Y 2012-13 was filed bey ond the prescribed time limit u/s 139(1) of t he Act. For t hat the ld.CIT (A) has rec orded a cat egoric al findi ng tha t the as sess ee wa s prevented by sufficient ca us e in filing the ret urn wi thin the pr escri be d time limit per ha ps due to weak responsive Depa rtmental websit e. Even in a situati on the return of i ncome of the ass es see for A Y 2012-13 is trea ted as belat ed return beyond the prescribed time limit provided u/s 139(1) o f the A ct, the n als o, as per t he j udgement of the Hon'bl e Supr eme Court in the cas e of G.M. K nitting Indus tri es P vt. Ltd. (s upra), which wa s follo wed by the coordi na te B enc h of the I TAT, Pune i n t he ca se of Kr ushi Vibha g Ka rmc hari Vrund Sa ha kari Pat Sa ns tha (s upra), the as sess ee is ve ry well entitled to claim de duction u/s 80IA(4) of the Act. Therefore, we are unabl e to find a ny valid rea son to i nterfere wit h the fi ndi ngs arriv ed at by t he ld.C IT(A ). Thus , we uphol d the same. Accordingl y, t he s ol e ground of the R ev enue i n ITA No.5701/D el /2016 for AY 2012-13 bei ng dev oid o f merits is dis missed.
Appeal of t he R eve nue in ITA No.5703/Del /2016 for AY 2012-13
20. As agreed by the ld. Representativ es of both the sides , t he is sue and grounds i n t he Depa rtm ental appea l for A Y 2011-12 to 2014-15, i.e., i n all four appeals are 15 ITA No. 3557/Del/2023 Synergy Waste Management Pvt. Ltd.
identical and similar a nd, t herefore, the c as e f or AY 2012-13 i.e. , ITA No.5703/Del /2016 can be t a ken as a lead cas e for adj udica tion of the s ole iss ue i nvolve d in all thes e four Departmental appeals. The grounds rais ed by the R evenue i n the said a ppeals a re as follows:-
"i ) On fac ts & i n the circumsta nces of t he cas e the Ld. CIT (Appeals ) has erred i n del eti ng the a dditi on of Rs.4,12,98,981/- made on acc ount of disallowanc e of deduc tion U /s 80IA of t he Act; even though the ass ess e e does not ful fill the conditi ons l aid down for claim of s uch deduc tion i.e. t he as sess ee is not e nga ged in the bus i nes s of Devel opi ng or (ii) Oper ati ng & mai ntaini ng or (i ii) Devel oping, operati ng a nd maintai ni ng a ny infras truc tura l fac ility a nd not ent ered i nt o a gr eement with t he C entral Govt, or a State Govt, or a Local Authority or any o ther st atutory body for providi ng s uc h faciliti es.
ii) On fac ts & i n the circums tances of the ca se the Ld.(A ppeals) has erred i n d eleti ng the a dditi on of Rs.4,12,98,981/- made on acc ount of disallowanc e of deduc tion U/s 80IA of the Act ev en t hough the ass ess e e is only engaged in the busi ness of tre ati ng bi o-medical waste, which is no t c ove red in the defi nition of infras truc ture faci lity as per expla nation to 80IA(4) o f the Ac t.
iii) On fact s & i n the circumstanc es o f the c as e the L d.
CIT (Appeals) has er red i n deleti ng the addition of Rs . 4,12,98,981/- ma de on a ccount of disa llowa nc e o f deduc tion U/s 80IA of the Act ev en t hough the ass ess e e has been payi ng rent for Pla nt & Machi nery , which s ho ws tha t the fa cili ty is not owned by t he asses se e.
iv) The appellant craves l ea ve to add, amend or modify the grounds of appeal s ubs equentl y during the pendenc y of the a ppeal. "
21. The ld. Sr. DR s ubmitted that the ld.C IT(A) has err ed i n deleti ng the additi on m ade on acc ount of disal lowa nc e of deducti on u/s 80IA of t he Act ev en tho ugh t he as ses see does not ful fill t he conditions laid down for claim of suc h deduction. He fur ther ex plained tha t the as sess ee is not e nga ged i n the busines s of (i ) Developi ng o r (ii) Opera ti ng & mai nt ai ni ng or (iii) Developi ng, operati ng a nd maintai ni ng any infras truc tura l fac ility a nd not ent ered i nt o a gr eement with t he C entral Govt, or a State Govt, or a Local Authority or any o ther st atutory body for providi ng s uc h faciliti es. T he ld. DR als o poi nted out that under the pec ulia r facts and circums ta nc es of the pres ent ca se, the 16 ITA No. 3557/Del/2023 Synergy Waste Management Pvt. Ltd.
ld.CIT (A) ha s a l so erred in deleting the Impugned additi on made on account of disallowanc e of deduc tion U/s 80IA of t he Act even though the ass es se e is onl y enga ged i n t he bus i ness of tr eatment of bi o-medical waste whic h is not c overed under the definiti on of 'i nfras truc tura l facility' as per the Expla na tion to s ec tion 80IA(4 ) of the Act. The ld. Sr. DR als o drew our attention t owar ds a ssessment order and s ubmitted t hat the ld.CIT (A) has also e rred i n deleti ng the additi on made on account of disall owa nc e u/s 80IA of the Act ev en tho ugh the as sessee has been payi ng rent for Plant & Mac hi nery, which shows t hat the i nfras tr uc tural facility is not owne d by the ass es se e. The ld. Sr. DR submitt ed that the AO was ri ght in ma ki ng disallowance of deducti on u/s 80IA o f the Act a nd the ld.CIT(A) has granted relief to t he as se ss ee wit hout any r eas ona bl e and jus tified bas is. Therefore, the impugned first appellate order may ki ndly b e set asi de a nd the order of the AO may be res tored.
22. Replyi ng to t he above , the l d. Co unsel of the as sess ee drew our attention to wards the or ders of the aut horities bel ow and submitt ed that the iss ue is squar ely c over ed by t he vari ous judge ments of the Ho n'bl e Hi gh C ourt o f B ombay in t he ca se of C IT vs . Conti nental Wareho usi ng C orpora tion (Nha va S heva) Ltd. (2015) 58 taxma nn.co m 78 (Bom) a nd s ubmitted tha t i n this cas e, t he AO had de ni ed deduc ti o n u/s 80IA(4 ) of the Act stati ng that t here was no s pecific agre ement wi th the Centra l G overnm ent, State Gov ernment or t he L oca l Aut hority a nd the Hon'ble High Court, consideri ng the simil ar fac ts and circ ums ta nc es , held t hat the re is no r equi rement of either a specific agre ement onc e the facility is not hi ng, but, 'i nfras truc tura l facility' set up withi n the precinc ts of the port , then, even otherwise the deduction admissible u/s 80IA(4 ) of the Act is a dmissible. The ld. C ouns el als o drew our att enti on towa rds the rel ev ant opera tiv e part of the first appellate or der, specific ally para 7.1 to 7 .6 of the first appellate ord er and submi tted that the enga gement of the as sessee i n trea tment of bi o medi c al waste cons tit ute ma intai ni ng or d evel oping of infras truc tura l facili ty with respect to s olid was te ma nagement sys te m and the same is eli gibl e infras truc ture facili ty as p er pr ovisions of s ecti on 80IA of the Act.
23. He furt her submi tted that even, i n absenc e of a ny specific agreement, the business operati on/a cti on of the as sess ee are r equired to be seen with respec t to performance of t he terms of agreement as wel l a s conditions pr escr ibed by t he a uthorit y with whi ch 17 ITA No. 3557/Del/2023 Synergy Waste Management Pvt. Ltd.
agre ement has be en ente red i nto . The ld. Counsel a lso submitt ed tha t it i s a gla ri ng fa ct that the ass ess ee is worki ng under the cont ract means that the ass ess ee has got c ontract for supervisio n of opera ti on and mai ntenanc e. The ld. C ouns el also s ubmitted t hat the AO has not co ntrov erte d a very re leva nt fact tha t the as sess ee has s et up bi o medical waste facility and the prov ision of s ecti on 80IA(4) of the Act do not put a ny bar or mo netar y restrictio n regarding i nves tment required t o be set up eligibl e infrastruc tural faci lity. The ld. Co unsel s ubmitted tha t the ass es s ee has undertake n contra ct wor k r elati ng to bio medic al was te disposal a nd trea tment as per t he ter ms and c onditio ns ent ered i nt o with vari ous a uthorities and it is not the allegati on of t he AO t hat any of t he presc ribed conditions have not been met or the a ppella nt ha s not carri ed out the work rela ti ng to bio medic al was te tr eatment i n accordance with the terms and c onditio ns prescribed i n the contracts .
24. The ld. C ounsel lastly submit ted t hat the AO did not appreciate the rel eva nt facts and c ircums ta nces whic h were ri ghtly co nsidered by t he l d.C IT(A ) before granti ng relief to the ass essee. Ther efore, the first appellate aut hority was ri ght i n granti ng r elief t o the as sess ee. The ld. AR als o submitt ed that the a ss es see, in s upport of hi s claim for deductio n u/s 80IA(4) submitt ed detailed s ubmissions before the aut horities bel ow, whic h has bee n reproduced by the ld.C IT(A ) i n para 4 of the firs t appell ate ord er which c lea rly reveal s tha t the is sue is cover ed i n favour of the ass es see by vari ous judgements. Therefore, the first appella te order may ki ndly be upheld by dismissing t he a ppe al of the Revenue .
25. The main allegation of the AO i n dismiss ing the claim of the a ss es see is t hat the conditions pres cribed for claimi ng deduc tions u/s 80IA ha s not been c omplied with by the ass ess ee beca use: (i ) t here was no dev elopment of a ny i nfrastructure fac ility; (ii) the appella nt had been tr eati ng bi o medical w ast e whic h was not c overed in the defi niti on of 'infrastr uc ture facility' as per Expla na tion t o s ection 80IA(4) of the Ac t and (iii) the appella nt wa s paying r ent for pla nt & ma c hi nery whic h i ndica te t hat the fac ility wa s not owned b y the appella nt. From the c opi es of t he a gr eements plac ed before t he AO, he also noticed tha t the a ctiviti es of the appella nt we re not c overed as per the pr ovisi ons of sec tion 80IA(4) of the Act and the a greeme nt wi t h Ut tar Pra desh P olluti on Contr ol Board, col umn N o. (i ii ) contai ns onl y authoriza tion from the Pollution Co ntrol Board for v arious peri ods, the a greem ent wit h Delhi 18 ITA No. 3557/Del/2023 Synergy Waste Management Pvt. Ltd.
Gov ernment only s peci fy terms a nd condi tions for plot o f land pr ovided to the app ella nt by the Delhi G over nment for limit ed period and the a greement wi th the General Hospital, Sirsa is no an a greeme nt wit h a ny authority as per the re quirement o f sectio n 80 IA of the Ac t.
26. Furthermore, the ld. C IT(A ) has gra nted r elief to the as ses s ee wi th the followi ng obs erv ati ons and findi ngs:-
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27. On c areful c ons ideratio n of the riv al s ubmissions , first of all, we not e tha t the ld. Counsel of t he as s ess ee, duri ng the argume nts s ubmi tt ed c opy of the order of ITAT, 'G' B enc h reported a s (2017) 88 taxma nn.c om 4 05 (Del . Trib) in as sess ee's own cas e named as Syne r gy Waste Management Pvt. Lt d. vs. ACI T, wherei n t he Tri bunal held that where the AO ha d specifically all owed the c laim u/s 80IA(4) aft er reducing it by other inc ome not bei ng eligible for claim of deduction, the provis ions of s ecti on 263 of the Act co uld not b e i nvoked on t he ground tha t t here had be en no applicati on of mi nd by the AO m erely becaus e he ha s not ma de l engthy disc ussi on on t he i ssue in the ass es sment order. On perusa l of the said order, we observ e tha t the ld.CIT, Hisar , i nvo ki ng the pro vis ions of secti on 263 of the Act revis ed t he order of assessment for AY 2009-10 wherei n the AO held tha t the as sessee is entitl ed to claim deduc tio n u/s 80IA(4 ) of the Act. The Tribunal, a l lowi ng the appeal of the assessee, hel d that t he provisions of s ec tion 263 of the Act c oul d not be invoked on t he ground that there had bee n no a pplication of mi nd by the A O mer ely bec a use he ha d not i ncl uded l engthy dis cussi on or deliberati ons on the iss ue i n the as sess ment order. This order s upport the claim of the ass es se e tha t he was held entitled to claim deducti o n u/s 80IA(4) of t he Ac t by t he AO which was approved by the coordi na te B enc h of t he Tri bunal setti ng a side the revisiona ry order u/s 263 of the Act. Furt her, from a not her order of ITAT 'G ' B enc h dat ed 24.04.2018 in ass es see's own case fo r AY 2010-11 in ITA No.1116/Del/2015, we further obse rve that t he ld.CIT (A), Hisar al so revi sed the assessment order for AY 2010-11 u/s 263 and t he Tribunal, al lowi ng t he a ppeal of the as ses s ee, hel d tha t the Re venue di d not bri ng to t he notice of the Benc h any c ha nge in t he circumstances for AY 2009-10, 2011-12 a nd 2013-14 on the one ha nd a nd 33 ITA No. 3557/Del/2023 Synergy Waste Management Pvt. Ltd.
AY 2010-11 on the other. It wa s also held t ha t it is diffic ult to take a different view from the one ta ke n in the order dated 30.05.2016 i n ITA No. 2560/Del/2 015. The rel eva nt fi ndings of the Tribunal in its ord er are bei ng repr oduce d bel ow for the sake of c ompliance:-
"11. We ha ve per used the ma terial papers on rec ord i n the light of t he submiss ions on eit her si de . Relevant c ontents of the ass es sme nt order dat ed 26/12/2011 for the AY 2009-10 re ad t hat-
"R equis ite informa tion/doc ument s have been furnished, which are plac ed on rec ords . Bo oks of ac co unts produc ed wer e tes t c hecked. The cas e wa s discuss ed wi th t hem. The as sessee has fi led a revis ed ret urn on 26.03.2011. The co mpa ny has omitt ed to claim a de ducti on under sec tion 80IA for whic h it was eligibl e being infrastr uct ure compa ny c arryi ng on s olid waste mana gement activiti es . Thus, the as s es see has claimed deduction of Rs.1,72,76,5 60/-under secti on 80IA of the Inc ome tax Act , 1961 in the r evis ed ret urn. The claim of the assessee is acc epte d subj ect to t he observati ons that t he as ses see is entitl ed to deduction of Rs. 1,66,73,315/-a nd other i nc ome of Rs.6,03,245/-is not eligibl e for deducti on und er section 80IA of t he I ncome ta x Act, 1961. H oweve r tax is cha rgeable und er sectio n 115 JB (MAT) s i nce ta x on book pr ofit of Rs .1,78,09,927/-is more t ha n tax on norm al i nc ome."
12. A readi ng of the a bov e porti on of t he as sessment o rder for A Y 2009-10 ma kes it clea r that the fac ts ar e identi cal for both the a ss essme nt y ea rs 2009 10 and 2010-11. In the ca se o f a ss es sment year 2009-10 als o, L d. ClT exercis ed powers under s ec tion 263 of t he Ac t and set aside the matter t o t he A O with s imilar obs er vati o ns as thos e for as sessment year 2010-11. A reading of the orde r dated 30/05/2016 in ITA No. 2560/Del /2015 passed by a coordi nate benc h of this Tribunal shows that the gr ounds on whic h t he lear ned CI T r evised the orders ar e not tenabl e and suc h a n exercise was blatantly illegal a nd liabl e t o be crashed. For the assessment year 2010-11 als o C IT rev ise d the ass ess ment order on almost simil ar grounds lik e the order passed by the ass es sing offic er is witho ut determinati on of tota l inc ome and ta x pay abl e, lear ned assessi ng officer had not made prop er e nquir y etc .
13. Fac ts being c ontinued to be simila r for both these y ears includi ng wordi ng of the a ss ess me nt order, we are of the co nsidered opi ni on that t he 34 ITA No. 3557/Del/2023 Synergy Waste Management Pvt. Ltd.
findi ngs of the co ordi nate benc h of t hi s tribunal f or the a ssessme nt yea r 2009-10 ar e ver y much applicabl e for this assessment y ear also.
14. Further, ther e is no denial from the rev enue tha t t he a ss esse e had submitted all the releva nt doc uments a t the time of ass essm ent pr oce edi ngs a nd suc h doc uments i ncl ude the c omputati on of i nc ome, copy of the audited bala nc e sheet, copy o f the ta x a udit report under section 44 AB, a nd the copy of t he a udit or's report in form 10 CCB als o. Moreov er as sessment or der clearly reads tha t all the r equi site informati on/doc uments i ncl udi ng the books of ac co unts were pr oduced a nd wi th a spec ific ref erenc e to the eligibility of the assess ee bei ng an infras truc ture co mpa ny ca rr ying on solid waste ma nagement activ ities, l earned AO acc epted the clai m of the a ss ess ee.
15. Further it goes uncontrove rted tha t for t he as sessment y ears 2011-12, 2012-13 and 2013-14 the Assessi ng Offic er deni ed exempti on under section 80IA to the assess ee a nd ma de addi tions but in a ppeals t he CIT(A) cl early giving a fi ndi ng that t he infra st ruct ur e facility set up by the ass essee in the form of biomedical wast e treatme nt pla nt is entitled to deduction under s ecti on 80IA of t he Ac t, al lowed t he appeal of the a ssessee.
16. Rev enue does not bri ng t o our notice any cha nge of circ umsta nc e; for the ass essment yea rs 2009-10, 2011-12 to 2013-14 on one hand a nd 201. 11 on the other. Fa cts bei ng c onti nued t o be s imilar, we fi nd it di ffic ult to take a di ffer ent vi ew from t he one tak en in orde r da ted 30/05/2016 in ITA do . 2560/Del/2015 by the Tribunal or by the firs t appellate authorit y i n r es pect of the as ses s ment y ears 2011-12 to 2013-14.
17. In these ci rcumsta nces, we fi nd tha t t he impugned acti o n of t he CIT under sec tion 263 of t he Act being bla ta ntly illegal, the impugned orde r is liable to be quas hed, a nd we direc t accordingly."
28. No w, we proc eed to adjudicate the griev anc e of the Revenue r egardi ng s us ta inability of first a ppellate or der of t he ld.CIT(A ). From the relev ant pa rt of the fi rst appellate order a s reproduced her ei na bove, we clea rly obs erv e that he ld.C IT(A ) first of al l note d the provisions of section 80IA (4 ) of the Act al ong wi t h Expla nati on thereto. Ther ea ft er, he exa mi ned the definiti on of bi o- medical waste a nd also considered the Bio-medic al Waste 35 ITA No. 3557/Del/2023 Synergy Waste Management Pvt. Ltd.
Mana ge ment R ul es , 2016 and N otifica ti on dated 08.04.2016. After a na lyzi ng the Sol id Waste Mana geme nt Rul es, 2016, t he ld. C IT(A ) proc eeded t o consider t he prop ositi on rendered by the ITAT, Mumbai B ench i n t he case of ITO v s. EA Infras truc ture Opera ti ons Pvt. L td., order dated 09.07.2010 and al so adjudicate d the obj ec ti ons rai sed by the AO i n dismissing the claim of deduc tion u/s 80IA of the Ac t by t he ass ess ee. The ld.CIT (A), in pa ra 7 .3 c onsider ed the propositi on rend er ed by the Hon'ble B ombay High C ourt i n the c ase of C IT vs. Conti nental Wa rehousi ng Corpora tion (Nha va Sheva ) Ltd. (supra) a nd also c onsider ed the proposi tion rend er ed by the coordi nate Bench of the ITAT, Ahmedabad i n the case of En-Vision Enviro Engi neers (P) Ltd., 150 TTJ 621 (A hd). The ld.C IT(A ) finall y held that the engage ment of the ass ess ee i n t he treatment of bio- medical waste constit utes maintai ning or devel opi ng of infras truc tura l facility with r espect to solid was te ma nagement sy st em whic h is an eligible infr ast ruct ural facility as per the provisions of s ecti on 80IA(4).
29. He also concluded that i n a bs ence of spec i fic agre ement, the actions of the assessee are required to be seen wi th respect to perf ormance of terms of agre ement as well a s c onditi ons pres cribed by t he as sess ee with whi ch agre ement has been enter ed i nt o. It was also rightly observed that when the as sess ee is worki ng under the contrac t me ans that t he assess ee has got c ontra ct of s upervision and ma intena nc e a nd it will be far-fetched or bey ond i magi na ti on to st ate t hat the proj ect i n s uch a case has been dev el oped by t he Municipal Corporation. On being as ked by the B ench, rebutti ng the allegati on of the A O t ha t the ass ess ee do not own any plant a nd mac hi nery a s it had paid re nt thereon, the ld. Counsel submitted the copies of t he financia l statements incl uding bala nce she et a nd c ha rt of rel evant FY showi ng claim of d epreciation whic h r eveals tha t the as sessee has depl oyed a nd set up pla nt a nd mac hi nery a nd had also claimed depreciation ther eon whic h was allowed by t he AO without any dis pute or doubt, thus, i nadvert ent menti o ni ng of rent pa yment in P&L Acc ount on pl a nt & machi nery does no t ra ise any bar regardi ng claim of deploy ment of plant & mac hi nery by the as se ss ee for setti ng up of i nfrastruc ture fac ility on whic h c laim of ded ucti on u/s 80IA (4) has been ma de . In view of t he above, we a re i n a greement t hat t he conclusi on dr awn by t he ld.CIT (A) t hat t he appella nt as sess ee has s et up bio-medical facility as p er the prov isions of sec tion 80IA (4 ) of t he Ac t, there is no monetary restriction on the a mount of i nv estment required to se t up el i gible infra struct ure fa cility t he appella nt ass ess ee has ca rried out the work c ontrac t wi th 36 ITA No. 3557/Del/2023 Synergy Waste Management Pvt. Ltd.
vari ous hospitals and l oca l government bodies relati ng to tr eatment, management and disposal of bi o-medical waste a s per the terms a nd conditions ent ered w ith vari ous aut horities which has been noted by the ld.C IT(A ) in the firs t appell at e order . He ri ghtly note d t hat it is not an allegation of t he A O t hat a ny of the presc ribed conditions have not been met or else the appellant has not car ried out the work relati ng to bi o-medical waste tr eatment i n acc orda nce with the terms and c onditions prescribed in the contracts. After r ecordi ng t he above findi ngs, the ld.C IT(A ) fi na lly observed tha t the infras truc ture facil ity set up by the appellant i n t he fo rm of bio-medical wast e treatment pla nt is entitled to deduc tion u/s 80I A(4) of the Ac t.
30. At the cost of repetition, we ma y al so poi nt out tha t the Tribuna l i n the consistent orders for A Ys 2009-10 and 2010-11 dated 30.05.2016 and 24.04.2018 respec tiv ely, has held t ha t the Revenue does not bri ng t o the notice of t he Bench any change of c irc umstanc es for AY 2009- 10, 2010-11 to 2013-14 a nd 2010-11 a nd the facts being conti nued to be i denti cal and s imilar. Therefor e, after allowi ng appeal of the ass es see against the order of CIT, Hisar for AY 2009-10 a nd 2010-11, we saf ely pres ume tha t the assess ment order allowi ng claim u/s 80IA of the Act has been uphel d by the Tribunal se tti ng aside t he report of the a ction u/s 263 of t he Act. On being as ked by the Bench, the ld. Sr . DR could not assist us a s to whether any appeal has been filed by the Department aga inst t he said orders of the Tribunal and t hes e orders hav e been set as ide or modi fi ed i n any ma nner. In view of the for egoi ng, we reac h to a fi nal lo gical co nclusion tha t ther e is no a mbi guity, perv ers i ty or a ny other valid rea son to interfere with t he fi ndi ngs arrived at by the ld. CIT(A) a nd, therefore, we uphold the s ame. Consequently , t he appe al of the R eve nue for A Y 2012-13 bei ng dev oid o f merits is dis missed.
31. Since , in the begi nni ng of t he hearing, the ld. Repres entatives of both the sides have a greed t hat t he fac ts a nd circumsta nces of all four ap peals of t he Revenue are ident ical a nd si milar, therefore, o ur abo ve not ed findi ngs rec orded for AY 2012-13 woul d apply, mut atis m utandi s, to o ther appea ls pertai ni ng to AY 2011-12, 2013-14 and 2014-15. Resul ta ntly, t hese three appeals of t he R evenue a re a lso dismissed, followi ng the findi ngs arriv ed at for A Y 2012-13."
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6. It is thus clear that once there is no change in the relevant facts or material so far as the assesse e entitlement sec tion 80 IA(4) deduction claim is concerned, we do not see any reason to adopt any different approach and therefore, learned CIT(A) impugned find ing s reversing Assessing Officer disallowing the section 80IA(4) deduction herein, stand upheld. Ordered accordingly.
7. This Revenue's appeal is dismissed in above terms. Order Pronounced in the Open Court o n 20/12/2024.
Sd/- Sd/-
(S. Rifaur Rahman) (Satbeer Singh Godara)
Accountant Member Judicial Member
Dated: 20/12/2024
*Subodh Kumar, Sr. PS*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR