Case Law Details
PCIT Vs BT Global Communications India Pvt. Ltd. (Delhi High Court)
Introduction: The Delhi High Court, in the case of PCIT vs. BT Global Communications India Pvt. Ltd., addressed the contentious issue of denying Section 80IA benefits in the fourth assessment year. The Revenue challenged the ITAT’s decision, which had allowed the assessee’s appeal. This article delves into the facts, legal aspects, and the court’s reasoning.
Detailed Analysis: The respondent, a telecommunication service provider, filed its return of income claiming deductions under Section 80IA for the assessment year 2010-11. The case involved a U-turn by the Department on the eligibility of the deduction. The Principal Commissioner invoked revisional jurisdiction under Section 263, disputing the eligibility under Section 80IA(4)(ii). The crux was the migration of the respondent’s license from IP-VPN to NLD-ILD in 2006.
The court considered the scope of Section 263, emphasizing that the revisional power can’t be exercised for a mere difference of opinion. The legal position, as laid down in various judgments, clarified that the order should be both erroneous and prejudicial to the revenue. The court cited the Circular No. 1 of 2016 to support the respondent’s argument that the initial assessment year should be determined when the deduction is claimed.
The court further scrutinized the migration of licenses, highlighting that the PCIT didn’t establish the creation of a new undertaking. Referring to precedent, the court emphasized that a mere expansion of services doesn’t negate Section 80IA(4)(ii). The judgment in Shasun Chemicals and Drugs Ltd vs CIT was cited to underscore the continuity of deductions.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
