Boggaram Krishnamurthy Ramakrishna Vs DCIT (ITAT, Bangalore Bench)
Solar Panels on One Roof, Deduction Claimed in Another Name: Approval Mismatch Sinks ₹9.67-Lakh Claim u/s 80-IA—Bangalore ITAT
Summary: The Bangalore ITAT denied deduction of ₹9,67,138 u/s 80-IA claimed by an individual through his proprietary concern, M/s Azure Energy, in respect of a solar rooftop power plant. The statutory approvals, power-purchase agreement & completion certificate were all issued in the name of another entity, M/s Viswas Textile Processors. The Tribunal held that filing Form 10CCB alone was insufficient when it was not accompanied by the requisite approval, agreement or permission in the name of the undertaking claiming the deduction.
Delay of 177 Days Condoned
The assessee’s appeal before the Tribunal was delayed by 177 days. He explained that the CIT(A)’s order was neither received by post nor delivered through email. He came to know about the order only when the Demand Management Centre, CPC, Mysuru, telephoned him regarding payment of the outstanding demand.
The assessee contended that the delay was unintentional & occurred due to circumstances beyond his control.
Relying upon the Supreme Court’s decision in Collector, Land Acquisition, Anantnag v. Mst. Katiji, the Tribunal reiterated that procedural rules are the handmaids of justice. Where substantial justice conflicts with a technical consideration, the former should ordinarily prevail. Since the assessee did not benefit by filing the appeal late & had supported his explanation with an affidavit, the delay was condoned.
Deduction Claimed by Azure Energy
The assessee carried on business through his proprietary concern, M/s Azure Energy. He filed his return for AY 2018-19 declaring total income of ₹42,77,990 after claiming aggregate Chapter VI-A deductions of ₹11,52,138. This included a deduction of ₹9,67,138 u/s 80-IA from the alleged business of generating electricity through solar energy.
During scrutiny, the AO noticed that the approvals, permissions & agreements connected with the solar project were not in the name of Azure Energy. They were issued in the name of M/s Viswas Textile Processors, a partnership firm constituting a different taxable entity.
Bangalore Electricity Supply Company Limited had granted its approval & permission to Viswas Textile Processors. The power-purchase agreement was also executed with that firm. Even the certificate recording completion of the solar rooftop power plant was issued in its name.
Assessee Was Proprietor Here & Partner There
In response to the show-cause notice, the assessee explained that he was the proprietor of Azure Energy & also a partner in Viswas Textile Processors. According to him, Azure Energy had made the entire investment in the solar rooftop power-generation system & was actually engaged in generating electricity.
The solar project was installed on the rooftop of premises controlled by Viswas Textile Processors. Since that firm held the power licence from BESCOM & Azure Energy could not obtain a separate meter, the BESCOM approvals were necessarily issued in the firm’s name.
The assessee further claimed that an agreement existed between Azure Energy & Viswas Textile Processors, under which electricity generated by the solar plant was sold by Azure Energy to the firm at the rates prevailing with BESCOM. On this basis, he argued that Azure Energy was the actual electricity-generating undertaking & was eligible for deduction u/s 80-IA.
AO & CIT(A) Rejected the Claim
The AO found that the assessee did not dispute the fact that the essential approvals & agreements were not in the name of Azure Energy. Since the undertaking claiming deduction had not independently satisfied the prescribed conditions, the claim of ₹9,67,138 was disallowed.
The CIT(A) confirmed the disallowance. He observed that although Form 10CCB had been filed, it was not accompanied by any agreement, approval or permission granted to the assessee or Azure Energy by the appropriate Government or authority.
Form 10CCB Cannot Travel Without Its Supporting Approval
The Tribunal examined the requirements governing deduction u/s 80-IA. An assessee claiming the deduction must furnish an audit report in Form 10CCB in accordance with the prescribed Rules. Under Rule 18BBB, the audit report must be accompanied by the agreement, approval or permission issued by the Central Government, State Government or local authority for carrying on the eligible activity.
Although Azure Energy had furnished Form 10CCB, the approval for installation of the solar rooftop project was issued in the name of Viswas Textile Processors. The completion certificate issued by RenXSOL Eco Tech on 24.03.2016 also mentioned only Viswas Textile Processors, with no reference to Azure Energy.
More importantly, the record showed that electricity from the solar plant was sold by Viswas Textile Processors to BESCOM. This weakened the assessee’s contention that Azure Energy was independently carrying on the eligible power-generation business.
The fact that the same individual was proprietor of Azure Energy & partner of Viswas Textile Processors did not cure the statutory mismatch. The undertaking claiming the deduction had to establish its own entitlement through the prescribed documents.
Accordingly, the Tribunal held that in the absence of the requisite approval, agreement or permission in the name of Azure Energy, the deduction u/s 80-IA had been correctly disallowed. The assessee’s appeal was dismissed.
Author’s Comments
Section 80-IA grants an incentive linked to an eligible undertaking, but the undertaking must establish that the approvals, operations & income belong to it. Investment in the equipment or an internal arrangement with the premises owner may not be enough where every external document identifies another entity as the approved generator or seller.
The ruling underscores the importance of structuring renewable-energy projects correctly from inception. The sanction, metering arrangement, commissioning certificate, power-purchase documentation, invoices & Form 10CCB should tell one consistent story.
Here, the solar panels may have generated electricity—but the paperwork generated the disallowance. For s.80-IA, sunlight is universal; approval is decidedly name-specific.
Cases Discussed
- Collector, Land Acquisition, Anantnag v. Mst. Katiji — relied upon for condonation of the 177-day delay in filing the appeal.
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT, BANGALORE BENCH
The assessee has filed the present appeal against the impugned order dated 25.04.2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“learned CIT(A)”] for the assessment year 2018-19.
2. The present appeal is delayed by 177 days. Along with the appeal, the assessee has filed an application seeking condonation of delay. As per the assessee, the impugned order was not received by post, and therefore he was not aware of the passing of the order by the learned CIT(A). It was further submitted that even the order was not received by e-mail and only upon receiving a phone call from the Demand Management Centre, CPC, Mysore, regarding the payment of outstanding demand for the year under consideration, the assessee came to know about the passing of the order by the learned CIT(A). Accordingly, the assessee has submitted that the delay in filing the present appeal is not intentional and has occurred due to circumstances beyond the control of the assessee. Thus, the assessee has prayed for condonation of delay in filing the present appeal.
3. We find that the reasons stated by the assessee for seeking condonation of delay fall within the parameters for grant of condonation laid down by the Hon’ble Supreme Court in the case of Collector Land Acquisition, Anantnag vs. MST Katiji and others, reported in 1987 SCR (2) 387. It is well-established that the Rules of procedure are handmaid of justice. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. In the present case, the assessee does not stand to benefit from the late filing of the present appeal. In view of the above and having perused the affidavit filed by the assessee, we are of the considered view that there exists sufficient cause for not filing the present appeal within the limitation period, and therefore, we condone the delay in filing the appeal by the assessee, and we proceed to decide the appeal.
4. In this appeal, the assessee has raised the following grounds: –
Grounds of Appeal No. 1.0:The learned Commissioner of Income Tax (Appeals), National Faceless Centre has erred on facts and law by confirming the disallowance and additions of Rs. 9,67,138/- claimed by the appellant u/s. 80IA of the Income Tax Act, 1961.
5. The solitary issue that arises for our consideration pertains to disallowance of deduction claimed under section 80-IA of the Act.
6. The brief facts of the case pertaining to this issue, as emanating from the record, are: The assessee is an individual and has a proprietary concern in the name and style of M/s. Azure Energy. For the year under consideration, the assessee filed its return of income on 12.10.2018, declaring a total income of Rs. 42,77,990/-, after claiming deduction of Rs. 11,52,138/- under Chapter VI-A of the Act, which, inter alia, includes the deduction of Rs. 9,67,138/- claimed under section 80-IA of the Act. The return filed by the assessee was selected for scrutiny, and statutory notices under section 143(2) and section 142(1) of the Act were issued and served on the assessee. During the assessment proceedings, it was noticed that the proprietary concern of the assessee, i.e., M/s. Azure Energy, is claiming deduction under section 80-IA of the Act. On perusal of the record, it was further noticed that the assessee does not satisfy the conditions for claiming deduction under section 80-IA of the Act, as the approval, agreement and permission were not in the name of M/s. Azure Energy, the unit which is claiming deduction under section 80-IA of the Act. It was noticed that the approval, agreement and permissions were all in the name of M/s. Viswas Textile Processors, which is a partnership firm and other entity, which was not generating electricity. It was further noticed that the Bangalore Electricity Supply Company Ltd. has given approval, permission and has also executed the agreement for power purchase with M/s. Viswas Textile Processors. Further, the certificate of completion of Solar Rooftop Power Plant Work was given in the name of M/s. Viswas Textile Processors. Accordingly, the assessee was asked to show cause as to why the deduction claimed under section 80-IA of the Act should not be disallowed. In response, the assessee submitted that he is a proprietor of M/s. Azure Energy and also a partner in M/s. Viswas Textile Processors. Further, it was submitted that M/s. Azure Energy is generating solar energy electricity and selling the same to M/s. Viswas Textile Processors. It was submitted that the M/s. Azure Energy had installed the solar rooftop generation system on the roof of M/s. Viswas Textile Processors and an agreement was entered into between M/s. Azure Energy and M/s. Viswas Textile Processors for supply of energy to the latter by M/s. Azure Energy. The assessee submitted that M/s. Viswas Textile Processors was the holder of a power license from Bangalore Electricity Supply Company, and therefore, the approval sanctioned by Bangalore Electricity Supply Company was issued in the name of M/s. Viswas Textile Processors.
7. The Assessing Officer (“AO”), vide order dated 29.01.2021 passed under section 143(3) read with section 143(3A) and section 143(3B) of the Act, disagreed with the submissions of the assessee and held that since all the approvals, agreements and permissions were in the name of M/s. Viswas Textile Processor and not in the name of M/s. Azure Energy, the deduction claimed under section 80-IA of the Act by the assessee cannot be allowed as the assessee has not fulfilled all the conditions laid down for claiming deduction under section 80-IA of the Act. The AO further held that the assessee has not denied any of the facts confronted to him and has admitted that necessary approvals and agreements were not in the name of M/s. Azure Energy, who was claiming deduction under section 80-IA of the Act. Accordingly, the AO disallowed the deduction of Rs. 9,67,138/- claimed under section 80-IA of the Act and added it to the total income of the assessee.
8. The learned CIT(A), vide impugned order, dismissed the ground raised by the assessee on this issue and held that since the assessee did not fulfil the requirements for claiming the deduction under section 80-IA of the Act, and Form No. 10CCB was not accompanied with the agreement, approval or permission to the assessee by the State Government, the deduction under section 80-IA of the Act by the assessee cannot be upheld. Accordingly, the learned CIT(A) affirmed the addition made by the AO. Being aggrieved, the assessee is in appeal before us.
9. We have considered the submissions of both sides and perused the materials available on record. In the present case, the assessee’s proprietary concern, M/s. Azure Energy, claimed deduction under section 80-IA of the Act on the basis that it was carrying on the business of generating electricity from solar energy. However, the Revenue denied the deduction claimed by M/s. Azure Energy on the basis that the necessary approvals and agreements are not in the name of M/s. Azure Energy, which is claiming deduction under section 80-IA of the Act, but the same are in the name of M/s. Viswas Textile Processors. As per the assessee, he is a proprietor of M/s. Azure Energy and also a partner in M/s. Viswas Textile Processors. It is a consistent plea of the assessee that M/s. Azure Energy is generating electricity through solar power, and M/s. Viswas Textile Processors is not in the business of generating electricity. As per the assessee, the entire investment for setting up the Solar Rooftop Power Plant was incurred by the assessee. It is the plea of the assessee that as the said Solar Rooftop Power Plant was installed on the roof of the premises under the control of M/s. Viswas Textile Processors, all the necessary licenses and approvals from Bangalore Electricity Supply Company were issued in the name of M/s. Viswas Textile Processors, since the assessee could not obtain a separate metre for selling electricity. As per the assessee, an agreement was entered into between the M/s. Azure Energy and M/s. Viswas Textile Processors, under which the electricity generated from the solar project installed on the roof of the building of M/s. Viswas Textile Processors was sold by M/s. Azure Energy to M/s. Viswas Textile Processors at the prevailing rates of Bangalore Electricity Company. Thus, as per the assessee, since M/s. Azure Energy was engaged in the activity of electricity generation through solar power and is entitled to claim a deduction under section 80-IA of the Act.
10. We find that for claiming deduction under section 80-IA of the Act, the assessee is required to furnish an audit report in Form No. 10CCB under Rule 18BB of the Income Tax Rules, 1961 (“the Rules”). From the perusal of the provisions of Rule 18BBB of the Rules, we find that the audit report in Form 10CCB is required to be accompanied by an agreement, an approval or permission to carry on the activity issued by the State Government or Central Government or local authority. However, in the present case, from the documents placed on record, we find that even though the assessee filed the said audit report in Form No. 10CCB, which forms part of the paper book from Pages 39 – 40, the approval for installation of Solar Rooftop Power Plant was issued in the name of M/s. Viswas Textile Processors, as is evident from the copy of the said approval placed in the paper book from Pages 42 – 44. It is pertinent to note that even the completion certificate issued by RenXSOL Eco Tech on 24.03.2016 was in the name of M/s. Viswas Textile Processors, and there is no mention of the name of M/s. Azure Energy in such a certificate. Thus, in the present case, it is evident that even though the assessee filed an audit report in Form No. 10CCB, the same was not accompanied by requisite approval or permission as required under Rule 18BBB of the Rules. Further, it is also pertinent to note that the electricity from solar power was sold by M/s. Viswas Textile Processors to Bangalore Electricity Supply Company.
11. Therefore, we are of the considered view that in the absence of requisite approvals/agreement/permission in the name of M/s. Azure Energy, the deduction claimed by M/s. Azure Energy under section 80-IA of the Act was correctly disallowed by the lower authorities. Accordingly, we do not find any infirmity in the order passed by the learned CIT(A) in upholding the disallowance made under section 80-IA of the Act. As a result, the sole ground raised by the assessee is dismissed.
12. In the result, the appeal by the assessee is dismissed.
Order pronounced in the open court on 01-Sept-2026.
