M/S. Sarvotham Care Ltd, A Company vs Deputy Commissioner Of Income Tax
2025 Latest Caselaw 4301 Tel

Telangana High Court

M/S. Sarvotham Care Ltd, A Company vs Deputy Commissioner Of Income Tax on 26 June, 2025

Author: P.Sam Koshy

Bench: P.Sam Koshy

     THE HONOURABLE SRI JUSTICE P.SAM KOSHY
                     AND
     THE HONOURABLE SRI JUSTICE NARSING RAO
                 NANDIKONDA
            I.T.T.A.Nos.223 OF 2008 & 210 OF 2010

COMMON JUDGMENT:

(per Hon'ble Sri Justice P.Sam Koshy)

Heard Ms. B. Nishitha, learned counsel representing

Mr. S. Ravi, learned counsel for the petitioner and Ms. B. Sapna

Reddy, learned Senior Standing Counsel for Income Tax

Department appearing for the respondent. Perused the record.

2. These appeals have been filed by the assessee under Section

260-A of the Income Tax Act, 1961 (for short 'the Act'), assailing

the orders, dated 29.02.2008 and 18.06.2009, passed in

I.T.A.Nos.871/Hyd/06 and I.T.A.No.804/Hyd/06, by the Income

Tax Appellate Tribunal, Hyderabad, (for short, 'the Tribunal'),

Bench 'A', for the Assessment Years 2003-04 and 2004-05

respectively, so far as the petitioner is entitled for the benefit under

Section 80IB of the Act, even after losing its character of small

scale industry.

3. Today, when the matter is taken up for hearing, learned

counsel for the parties brought to the notice of this Court that the

Three Judge Bench decision of the Hon'ble Supreme Court dealt

with the said issue in Deputy Commissioner of Income Tax,

Circle 11(1), Bangalore v. Ace Multi Axes Systems Limited 1,

and where the Hon'ble Supreme Court, in paragraph Nos.21 to 23

has held as under:

"21. In view of the above judgments, we do not see any difference in the situation where the assessee, is not initially eligible, or where the assessee though initially eligible loses the qualification of eligibility in subsequent assessment years. In both such situations, principle of interpretation remains the same.

22. Thus, while there is no conflict with the principle that interpretation has to be given to advance the object of law, in the present case, the assessee having not retained the character of "small-scale industrial undertaking", is not eligible to the incentive meant for that category. Permitting incentive in such case will be against the object of law.

23. For the above reasons, we hold that the assesee is not entitled to benefit of exemption if it loses its eligibility as a small scale industrial undertaking in a particular assessment year even if in initial year eligibility was satisfied".

The Hon'ble Supreme Court in the above case decided that

the assessee, in such circumstances would not be entitled for the

(2018) 2 SCC 158

benefit under Section 80IB from the moment it loses its character

from the small-scale industry.

4. In view of the above, these two appeals stand decided

against the assessee in favour of the revenue.

5. Accordingly, both the appeals stands rejected. There shall be

no order as to costs.

Consequently, miscellaneous petitions pending, if any, shall

stand closed.

__________________ P.SAM KOSHY, J

_______________________________ NARSING RAO NANDIKONDA, J

26.06.2025 Pvt