The court affirmed that an entity engaged in developing infrastructure projects, assuming all associated risks, qualifies for tax deductions under Section 80IA(4) of the Income Tax Act.

ORDER

PER LALIET KUMAR, J.M :

These appeals filed by the Revenue are directed against the common order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 09.05.2024for A.Ys. 2017-18, 2018-19 and 2020-21, respectively. Since facts are identical and issues are common, for the sake of convenience, all the appeals filed by the Revenue are being disposed of, by this consolidated order, by taking ITA No.682/Hyd/2024 for A.Y. 2017-18 as lead appeal.

2. Captioned appeals filed by the Revenue are barred by limitation by 8, 10 and 10 days, respectively. The Revenue has moved a condonation petition explaining reasons thereof. We have heard both the parties on this preliminary issue. Having regard to the reasons given in the petition, we condone the delay and admit all the appeals for hearing.

3. The grounds of appeal filed by the Revenue in ITA No.682/Hyd/2024 read as under :

“1. Both on the fact and in the circumstance of the case, the ld.CIT(A) is not justified in deleting disallowance of Rs.11,56,60,835/- made u/s 80IA(13).

2. Whether CIT(A) is justified in not considering the contract as a work contract?

3. Whether CIT(A) is justified in not considering the judgment of jurisdictional ITA T in the case of M/s NEC NCC MAYTAS in ITA No. 496/Hyd/2018, wherein issue is identical to the assessee’s own case?

4. Whether CIT(A) is justified in considering the business of the assessee company as developing of infrastructure instead of considering work contract as per section 80IA(13)?

5. Whether CIT(A) is justified in overlooking sub contract with M/s. BGR Mining & Infra Ltd?

4. Facts of the case, in brief, are that the assessee-AOP filed its Return of Income for Asst. Year 2017-18 on 27.10.2017, computing total income at Rs.11,56,60,835/- and claiming the same as a deduction u/s 80IA, with income u/s 115JC also computed at Rs.11,56,60,835/-. The case was selected for scrutiny under CASS, and a notice u/s 143(2), dated 11.08.2018, was issued, followed by a notice u/s 142(1), dated 31.08.2019, calling for details, to which the company responded. Another notice u/s 142(1), dated 26.11.2019, was issued, requiring the assessee to substantiate the claim of deduction u/s 80IA with necessary evidence and to provide details of other construction expenses, including the ledger account and TDS details, which the assessee duly furnished. After reviewing the submitted details, a show cause notice, dated 20.12.2019, was issued, requiring the assessee to explain why the deduction u/s 80IA should not be disallowed. Thereafter, assessee furnished his reply. After verification of the submissions made by the assessee, Assessing Officer completed the assessment u/s 143(3) of the Act dt.30.12.2019, determining the total income of the assessee at Rs.11,56,60,835/-.

5. Feeling aggrieved by the order of Assessing Officer, assessee filed appeal before the LD.CIT(A), who granted part relief to the assessee, by observing as under :

“5.13 I will now first proceed to deal with the financial involvement, risk factors and the liability involved in the project undertaken by the assessee for construction and development of infrastructure projects. As per the contract all the risk and responsibilities were borne by the appellant. Bank guarantee is to be provided by the appellant and in case of delay in competition of any individual milestone, the appellant was liable to pay liquidation damages to the Government. There was no fixed payment to be paid to the appellant. Payments were to be paid to the appellant upon completion of work on milestone basis and after certification of work completed. There was no fixed tenure in which payment was to be received by the appellant upon submission of the invoice. From each bill, the retention money was withheld, t