Asstt.Commissioner of income Tax, Shimla V. M/S East Bourne Hotels Pvt. Ltd, Shimla

MA 22/CHANDI/2020

AI Insights

The case involves M/s East Bourne Hotels Pvt. Ltd., which filed a return declaring nil income for the Assessment Year 2010-11, claiming a deduction under section 80IC amounting to Rs. 1,19,92,957 for profits derived from eco-tourism. The Assessing Officer (A.O.) rejected this claim, stating the business did not qualify under the eco-tourism criteria as per the state's policy. The CIT(A) upheld this decision, leading the assessee to appeal to the ITAT, which initially ruled in favor of the assessee without addressing the eco-tourism qualification issue. The Revenue filed a Miscellaneous Application seeking to rectify this oversight, arguing that the Tribunal's decision did not consider the A.O.'s rejection based on the lack of eco-tourism activities, which was a critical factor in denying the deduction.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135471 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 6 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-09-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-09-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 08-03-2020
• Other Referred Cases: DCIT V/s. M/s. Hotel Landmark, Aanchal Hotels Pvt. Ltd., M/s Symbiosis Pharmaceuticals P. Ltd. Vs. DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 80IC; 139(1); 80IC

Judgement Text

आयकर अपीलीय अिधकरण,च᭛डीगढ़ ᭠यायपीठ “ए” , च᭛डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH ᮰ी आकाश दीप जैन, उपा᭟यᭃ एवं ᮰ी िवᮓम ᳲसह यादव, लेखा सद᭭य BEFORE: SHRI. AAKASH DEEP JAIN, VP & SHRI. VIKRAM SINGH YADAV, AM Miscellaneous Application No. 22/Chd/2020 In आयकर अपील सं./ ITA NO. 301/Chd/2015 िनधाᭅरण वषᭅ / Assessment Year : 2010-11 The ACIT, Circle, Shimla बनाम M/s East Bourne Hotels Pvt. Ltd. Khalini, Shimla H.P. ̾थायी लेखा सं./PAN NO: AAACE3602K अपीलाथᱮ/Appellant ᮧ᭜यथᱮ/Respondent िनधाᭅᳯरती कᳱ ओर से/Assessee by : Shri Ashish Aggarwal, C.A राज᭭व कᳱ ओर से/ Revenue by : Smt. Amanpreet Kaur, Sr. DR सुनवाई कᳱ तारीख/Date of Hearing : 11/09/2023 उदघोषणा कᳱ तारीख/Date of Pronouncement : 12/09/2023 आदेश/Order PER VIKRAM SINGH YADAV, A.M. : The present miscellaneous application has been filed by the Revenue against the order passed by the Coordinate Bench dt. 09/08/2019 in ITA No. 301/Chd/2015 for Assessment Year 2010-11. 2. In the Miscellaneous Application, it has been submitted as under: Brief Facts of the Case and reason for filing of Miscellaneous Application Return declaring Nil income was e-filed by the assessee on 26.03.2011 after claiming deduction u/s 80IC amounting to Rs. 1,19,92,957/- for the A.Y. 2010- 11. The same was processed u/s 143)(1) of the Act. The case was selected for scrutiny through CASS. Assessee's claim of deduction u/s 80IC to the tune of Rs. 1,19,92,957/- being profit derived from hotel business was rejected by the A.O, considering the fact that business of assessee is not eligible for claim of deduction u/s 80IC, as the business activities of the assessee does not fall under Eco-tourism. Further the Assessing Officer also invoked the provisions of section 80AC, since assessee failed to furnish return u/s 139(1). 2. Aggrieved, the assessee preferred an appeal before Ld. CIT(A), Shimla at Solan, who adjudicated the matter as under:- "I have perused the facts of the case, the action of the A.O and the submissions of the appellant and relevant provisions of law. Since the appellant has failed to fulfill the basic requirement of law i.e. to submit the return of income in time, as provided in section 80AC, definitely it does not qualify for deduction u/s 80IC of the Act. As such disallowance made by 2 the A.O at Rs. 1,19,92,957/- is confirmed and appeal of the assessee is dismissed". 3. Against the orders of the Ld CIT(A), the assessee further filed appeal before Hon'ble ITAT and the Hon'ble ITAT decided the issue in favour of the assessee vide order dated 09.08.2019 in ITAT No. 301/ Chd/2015. Hon'ble ITAT while making decision in favour of the assessee has not discussed the very point of fact on the basis of which the assessing officer has denied the claim of deduction of the assessee company u/s 80IC of the Income tax Act. In the present case the hotel run by the assessee is located in the most urbanized and prime location of the capital city and is not located in the area as per 'eco- tourism' policy of the state of Himachal Pradesh. The hotel run by the assessee company is neither approved as eco-tourism hotel by the Department of tourism (H.P.) nor approved by the H.P. state Environment Protection & Pollution Control Board. The assessee has not been carrying on community based eco-tourism activity. 4. In the present case Hon'ble ITAT has adjudicated the appeal on the issue of claim of deduction u/s 80IC of the Income Tax Act, 1961 in contravention to section 80AC of the Income Tax Act. However, the main reason for disallowance of claim of deduction under section 80IC by the Assessing Officer was failure to prove Eco-tourism activities of the assessee which remained not discussed in the appeal order. Hence, there is a apparent mistake in the order of the Hon'ble ITAT. 5. Moreover, in the light of Hon'ble Uttarakhand High Court Judgement in the case of Anchal Hotel Pvt. Ltd. the assessee does not fulfill the conditions laid down to qualify a hotel under Eco-tourism. The Assessing Officer has made additions mainly holding that the activities of the assessee do not qualify to be involved in Eco-tourism. The assessee's contention to obtain Objection Certificate from Himachal Pradesh State Environment Protection Pollution Board, to establish that it was carrying out eco tourism activity, as is in the present case, was not accepted by the Hon'ble ITAT in ITA No.418/Chd/2017 dated 30.05.2019 in the case of DCIT V/s. M/s. Hotel Landmark wherein, appeal of the revenue was allowed on the issue of disallowance u/s 80IC by the AO, in favour, holding the decision of the Hon'ble Uttarakhand High Court in the case of Aanchal Hotels Pvt. Ltd. 6. In view of above stated facts there appears to be mistake apparent from the record and it is prayed that the same may be rectified. 3. The ld DR is heard who has taken us through the misc. application and prayed for recall of the order. Ld. AR is heard who has relied on the order passed by the Coordinate Bench. 4. We have heard the rival contentions and perused the material available on the record. We find that the limited grievance which has been considered by the Coordinate Bench relates to rejection of claim of the assessee under section 80IC of the 3 Act, for the reason that the returned income was filed late beyond the due date prescribed under section 139(1) of the Act, and thereafter, the matter was decided following the decision of the Coordinate Bench in case of M/s Symbiosis Pharmaecuticals P. Ltd. Vs. DCIT. Now, coming to the Revenue’s contention that the deduction under section 80IC of the Act was denied by the AO not just for delayed filing of return of income but also for failure to prove eco-tourism activity of the assessee, we find that there is nothing on record that the said issue was raised before the Coordinate Bench or anywhere emanating from the order so passed by the Coordinate Bench, in view of the same, where the matter is neither contested by either of the parties nor anywhere referred or brought to the notice of the Coordinate Bench, we do not see any mistake apparent on the face of the record in terms of the order passed by the Coordinate Bench. 5. In the result, Miscellaneous Application filed by the Revenue is dismissed. Order pronounced in the open Court on 12/09/2023 Sd/- Sd/- आकाश दीप जैन िवᮓम ᳲसह यादव (AAKASH DEEP JAIN) ( VIKRAM SINGH YADAV) उपा᭟यᭃ / VICE PRESIDENT लेखा सद᭭य/ ACCOUNTANT MEMBER AG Date: 12/09/2023 आदेश कᳱ ᮧितिलिप अᮕेिषत/ Copy of the order forwarded to : 1. अपीलाथᱮ/ The Appellant / 2. ᮧ᭜यथᱮ/ The Respondent 3. आयकर आयुᲦ/ CIT 4. आयकर आयुᲦ (अपील)/ The CIT(A) 5. िवभागीय ᮧितिनिध, आयकर अपीलीय आिधकरण, च᭛डीगढ़/ DR, ITAT, CHANDIGARH 6. गाडᭅ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar