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Exemption under Section 80(1A) of Income Tax Act, Delhi High Court upheld decision of ITAT

4 December, 2017


A Bench of Justice S. Ravindra Bhat and Justice Sanjeev Sachdeva of High Court of Delhi dismissed the appeal filed by income tax department questioning decision of the ITAT in favour of the respondents regarding exemption under section 80(1A) of the Income Tax Act 1961. The following questions of law were framed:


(i) Whether the Tribunal was correct in holding that for purposes of deduction U/s 80 (1A) of the Income Tax Act, 1961, the assessee should be a small scale undertaking on the last day of the previous year relevant to the initial/first assessment year and that the said requirement need not be satisfied in the subsequent assessments?

While passing order the court opined that the merits of the issue is covered by the common judgment of 20.07.2017 in the other appeals (Commissioner of Income Tax v. M/s International Tractors Ltd., ITA No.1082/2005 and connected appeals noticed earlier).
The court said that with respect to permissibility of the deduction under Section 80-1A, all the appeals by the Revenue, urging common questions with respect to admissibility of the benefit/deduction under Section 80-1A of the Act, were dismissed; the questions of law were answered against the Revenue.


While dismissing the appeal filed by Income Tax Department, the Bench decided question No.1 framed for this appeal is answered against the Revenue and in favour of the assessee and in the peculiar circumstances of the case, question No.2 is kept open for the parties to contend. 




Read the Order of Delhi High Court dated 30.11.2017



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