Ambit of S.80IC of Income-tax Act, 1961 and Special Category States : High Court Explains the Provision

Ambit of S.80IC of Income-tax Act, 1961 and Special Category States : High Court Explains the Provision

From S. 80IC of Income -tax Act, 1961 it becomes apparent that there is clearly no requirement of an entity which claims coverage under S. 80IC(2)(b)(ii) to have in place an agreement with either the Central or State Government or for that matter any local authority and appeal was allowed in Legacy Foods Pvt Ltd v. DCIT [2025] GCtR 1385 (Delhi). 

While Section 80IC(2)(a) does refer to the Central Government, the same is confined to the aspect of the manufactory having been set up pursuant to a scheme notified by that government. However, subclause (b) clearly avoids reference to any of those species of authorities. All that sub-clause (b) requires is for the undertaking to be engaged in the manufacture or production of any article or things specified in the Fourteenth Schedule and having commenced operations in the periods prescribed therein and in States of the Union mentioned therein. This must necessarily be contrasted with what obtains under Section 80IA(4)(i)(b) and where an agreement with the Central or State Government has been recognized as being a precondition for the purposes of claiming benefits under that provision itself. In the absence of S. 80IC requiring an agreement between the assessee and the Central/State Government or local authority or mandating such an agreement as being a mandatory precondition for claiming benefits, the Tribunal has clearly erred in reading such a requirement in respect of an assessee which may have been claiming benefits under Section 80IC.