Section 80HH l Newly Established Industrial Undertakings in Backward Areas
Circular No. 484 was issued by the Central Board of Direct Taxes on 1 May 1987. Its subject is Section 80HH l Newly Established Industrial Undertakings in Backward Areas.
Protects the section 80HH benefit for areas dropped when the Eighth Schedule went. The Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 replaced the Explanation below section 80HH(10) with sub-section (11) and omitted the Eighth Schedule with effect from 1 April 1984, leaving 'backward area' to be notified by the Central Government with retrospective effect from a date not earlier than 1 April 1983. Notification No. SO 165 dated 19 December 1986, effective from 1 April 1983, notified the new list and left out certain blocks and talukas where investment had exceeded Rs. 30 crores as on 31 March 1983. The Board decides the benefit will not be withdrawn retrospectively: notwithstanding that notification, all areas specified in the Eighth Schedule keep the section 80HH benefit for an industrial undertaking that begins to manufacture or produce, or a hotel that starts functioning, before 10 September 1986, the date the amending Act received assent. It adds that district references in the notification are to the areas comprised in those districts as on 1 October 1970, before recategorisation, so areas later carved out of them qualify unless specifically excluded in brackets, and that 'Hind' against entry 5 for Haryana is a typographical error for the district of Jind, which is entitled to the benefit.
The retrospective omission of the Eighth Schedule and the new notified list would have taken away, from a back date, a benefit undertakings had already set up on, and the Board acted in the interest of administrative convenience.
| Under the 1961 Act | Now |
|---|---|
| s.1 | s.1 |
| s.80HH | no counterpart recorded |
SECTION 80HH l NEWLY ESTABLISHED INDUSTRIAL UNDERTAKINGS IN BACKWARD AREAS
541. "Backward area" for the purpose of section 80HH - Whether areas included in the Eighth Schedule which has been omitted with retrospective effect, will continue to enjoy benefit of this section
1. By an amendment brought about by the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986, Explanation below sub-section (10) of section 80HH, was substituted by sub-section (11) and the Eighth Schedule was omitted. The said Explanation provided that in this section "backward area" meant an area specified in the list in the Eighth Schedule. The newly inserted sub-section (11) provides that for the purposes of this section "backward area" means such area as the Central Government may, having regard to the stage of development of that area, by notification in the Official Gazette specify in this behalf. The Schedule was omitted with effect from 1-4-1984 and it was provided that notification under sub-section (11) could be issued so as to have retrospective effect to a date not earlier than 1-4-1983. In pursuance of the new provisions of sub-section (11), a Notification No. SO 165, dated 19-12-1986 effective from 1-4-1983 was issued notifying the list of backward areas. In this notification, certain blocks/talukas, where investment had exceeded Rs. 30 crores as on 31-3-1983 were excluded.
2. In the interest of administrative convenience, it has been decided that the benefit of section 80HH in respect of any area will not be withdrawn retrospectively. The Taxation Laws (Amendment and Miscellaneous Provisions) Bill, 1986 received the assent of the President on 10-9-1986. It is, therefore, clarified that notwithstanding the aforesaid notification, all areas specified in the Eighth Schedule will continue to enjoy the benefit of section 80HH in respect of an industrial undertaking which begins to manufacture or produce articles before September 10, 1986 or in respect of the business of a hotel which starts functioning before September 10, 1986.
3. It may further be clarified that the reference to the districts in the Schedule to the aforesaid notification is to the areas comprised in the respective districts as on October 1, 1970, i.e., prior to their re-categorisation and, therefore, the areas carved out of these districts thereafter (except those specifically excluded within brackets) will be entitled to the benefit under this provision.
4. On account of a typographical error, the name of district "Jind" has been mentioned as "Hind" under column No. 3 against entry No. 5 (pertaining to Haryana State) of the Schedule to the said notification. The area comprised in the Jind District of Haryana State will, therefore, be entitled to the benefit of this provision.
Circular : No. 484 [F. No. 178/171/86-IT (A-I)], dated 1-5-1987.
In an assessment or appeal where a section 80HH claim has been refused because the area was dropped from the list notified on 19 December 1986.
Source: the Income Tax Department’s own published text — its page for this instrument.