Finest Promoters (P.) Ltd. Vs ACIT (ITAT Delhi)
Once 80IA is Allowed & Approval Restored by High Court, Revenue Cannot U-Turn in Later Years – Consistency Triumphs Over Withdrawal Drama
M/s Finest Promoters (P) Ltd developed an Industrial Park approved under the Industrial Park Scheme, 2002, & was duly notified by CBDT, making it eligible for deduction u/s 80IA. The deduction was allowed in AYs 2008-09 & 2009-10 in scrutiny assessments after full verification. However, in AY 2010-11 & later years, AO disallowed the claim solely because the Central Government withdrew the approval in 2014 alleging deviation in constructed area. CIT(A) confirmed the disallowance.
Assessee challenged the Government’s withdrawal before the Delhi High Court. The High Court, relying on Silverland Developers (Bom HC) & noting absence of any minimum area requirement or suppression of facts, quashed the withdrawal & restored the original approval, holding that minor delay or deviation cannot defeat 80IA benefit. The Court directed reconsideration only on limited issues, but no fresh order was passed thereafter.
Before ITAT, the assessee argued that once deduction was allowed in the initial year, the rule of consistency (Radha Swami Satsang, SC) mandates allowance in later years. The ITAT agreed that the sole basis of disallowance-withdrawal of approval-no longer existed after the High Court order. There was no change in facts & no fresh adverse order.
Accordingly, 80IA deduction was allowed for AY 2010-11, & the CIT(A)’s allowance for AYs 2011-12 to 2015-16 was upheld. Since the deduction itself was valid, penalty u/s 271(1)(c) was also rightly deleted. Assessee’s appeal was allowed & all revenue appeals were dismissed.
