TMI Blog2020 (7) TMI 625X X X X Extracts X X X X X X X X Extracts X X X X ..... egistration obtained by the assessee from the Director, STPI, Thiruvananthapuram constitutes as a valid approval for the purpose of deduction u/s 10A of the I.T.Act.The Delhi High Court in the case of CIT v. Technovate E Solutions P.Ltd. [ 2013 (3) TMI 372 - DELHI HIGH COURT] after considering the CBDT Instruction No.1 of 2006 dated 13.03.2006 and the letter issued by the Board dated 06.05.2009, held that when the EOU has obtained registration from the Director of STPI, the same is entitled to deduction u/s 10A of the I.T.Act. Therefore, the registration dated 23.03.2006 obtained by the assessee from the Director of STPI, Thiruvananthapuram is sufficient compliance for the purpose of claiming deduction u/s 10A of the I.T.Act. Deduction u/s 10B and 10A of the I.T.Act is pari materia. When claim u/s 10B of the I.T.Act was denied, the assessee made alternative claim u/s 10A of the I.T.Act. The alternative claim of deduction u/s 10A of the I.T.Act was not considered by the A.O. nor the CIT(A). In the interest of justice and equity, the issue of claim of deduction u/s 10A of the I.T.Act is restored to the A.O. The A.O. shall examine whether the assessee has satisfied the conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. The A.O. relied on the judgment of the Hon ble Delhi High Court in the case of CIT v. Regency Creations Ltd [(2013) 353 ITR 326 (Delhi)]. The assessee had made alternative claim u/s 10A of the I.T.Act before the A.O. when the assessments were reopened for assessment years 2007- 2008 to 2009-2010. The alternative claim made by the assessee u/s 10A of the I.T.Act was rejected by the A.O. by observing as under:- As regards the alternative claim, the same cannot be examined in the reassessment proceedings, as the same are meant for bringing to tax income which has escaped assessment and cannot be basis for assessee to make claims which are barred by limitation. 3.1 For the assessment year 2011-2012, the assessment was completed u/s 143(3) of the I.T.Act rejecting the claim of deduction u/s 10B of the I.T.Act. For rejecting the claim of deduction u/s 10B of the I.T.Act, the reliance was placed by the Assessing Officer on the judgment of the Hon ble Delhi High Court in the case of CIT v. Regency Creations Limited (supra). 4. Aggrieved by the orders passed by the Assessing Officer for assessment years 2007-2008 to 2009-2010 and 2011- 2012, the assessee preferred appeals t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Common point in all the Appeals- (I.T Appeal No.s 161, 162, 163, 164/Coch/2020 AYs 2007-08, 2008-09 2009-10 2011-12) The appellant is entitled to be granted deduction under Section 10A of the Act, going by the decision of the jurisdictional High Court in CIT v. Flytxt Technology P. Ltd., reported in (2017) 398 ITR 717 (Kerala) the order issued by this Hon'ble Tribunal following the said decision, in the case of Allianz Services Private Limited v. JCIT - (Refer: Paragraph NO.8 13 - 13.5 of the order dated 20.12.2019 in ITA No. 191/Coch/2015 for the A.Y.2010-2011) The first appellate authority failed to consider and apply the ratio of the decisions in Goetze (India) Ltd., v. CIT; reported in (2006) 284 ITR 323 (SC), NTPC Ltd. v. CIT, reported in (1998) 229 ITR 383 (SC). Additional points arising in I.T Appeal Nos. 161, 162, 163/Coch/2020 - AYs 2007- 08,2008-09 2009-10) A subsequent decision cannot be a justifiable ground for re-opening of the assessment. (Refer: DCITv. Simplex Concrete Piles India, reported in (2013) 358 ITR 129 (C). The decision of the High Court of Delhi came subsequent to completion of scrutiny assessment under Section 143(3), and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9-2010 and 2011-2012 confirmed the action of the A.O. in making the disallowance of deduction u/s 10B of the I.T.Act based on the judgment of the Hon ble Delhi High Court in the case of CIT v. Regency Creations Limited (supra). The alternative claim of deduction u/s 10A of the I.T.Act was not entertained by the CIT(A) primarily for the reason that the assessee had not claimed the same in original returns filed. 7.1 The claim of deduction u/s 10A and 10B of the I.T.Act is para materia except that the registration u/s 10B and 10A of the I.T.Act are done by different authorities. Further, the claim u/s 10B and 10A of the I.T.Act are to be made in Form No.56G and 56F respectively. The basis of denying the claim of deduction u/s 10B of the I.T.Act is on account of the dictum laid down by the Hon ble Delhi High Court in the case of CIT v. Regency Creations Limited (supra), wherein it was held that the assessee not having got the necessary approval from the appropriate authority under the statute, was not entitled to deduction u/s 10B of the I.T.Act. However, the above said judgment of the Hon ble Delhi High Court was modified in the Review Petition in the case of CIT v. Valiant Commun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court placed reliance on the judgment of the Hon ble Apex Court in the case of National Thermal Power Co. Ltd. v. CIT [(1998) 229 ITR 383 (SC)]. The Hon ble High Court further held that even though the powers conferred on the Commissioner u/s 263 of the I.T.Act is limited to examine the orders passed by the Assessing Officer whether it is erroneous and prejudicial to the interests of the revenue, that restriction of power could not affect powers of Tribunal which was bound to exercise u/s 254 of the I.T.Act. 7.5 The Tribunal in the case of M/s.Allianz Services Private Limited v. JCIT [ITA No.191/Coch/2015 order dated 20th December, 2019] had also considered an identical issue and held that the alternative claim of deduction u/s 10A of the I.T.Act is necessarily to be considered when the assessee s claim of deduction u/s 10B of the I.T.Act was denied. The relevant finding of the Tribunal which followed the judgment of the Hon ble jurisdictional High Court in the case of CIT v. Flytxt Technology P. Ltd. (supra) reads as follow:- 13.1 The facts of the issue are that the Assessing Officer rejected the alternate claim of granting deduction u/s. 10A of the I.T. Act by relying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim for exemption u/s. 10A of the Act granted by the Tribunal was upheld. 13.4 We have heard the rival submissions and perused the record. A similar issue was considered by the Jurisdictional High Court in the case of CIT vs. Flytxt Technology (P) Ltd. 87 taxmann.com 77 where it was held as follows: 6. We have considered the submissions made. Admittedly, the assessee initially claimed the benefit of Section 10B which was allowed by the Assessing Officer. Only when the Commissioner was seized of the proceedings under Section 263, the assessee raised an alternative claim for the benefit of Section 10A. The Commissioner did not examine that plea and on the other hand, directed the Assessing Officer to withdraw the exemption under Section 10B. It was this order which was challenged by the assessees in the appeals filed by them before the Tribunal. Such an appeal filed by the assessee is liable to be considered by the Tribunal exercising its power under Section 254 of the Act which obliged the Tribunal to consider appeal and pass such orders thereon as it thinks fit. It was this power of the Tribunal which considered by the Apex Court in National Thermal Power Co. Ltd.'s cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age of ignorance of the assessee and the A.O. shall assist the tax payer for claiming of his legitimate allowance / disallowance. As mentioned earlier, deduction u/s 10B and 10A of the I.T.Act is pari materia. When claim u/s 10B of the I.T.Act was denied, the assessee made alternative claim u/s 10A of the I.T.Act. The alternative claim of deduction u/s 10A of the I.T.Act was not considered by the A.O. nor the CIT(A). In the interest of justice and equity, the issue of claim of deduction u/s 10A of the I.T.Act is restored to the A.O. The A.O. shall examine whether the assessee has satisfied the conditions mentioned for claiming deduction u/s 10A of the I.T.Act and accordingly grant deduction. The assessee had filed audit report in Form No.56F for claiming alternative claim of deduction u/s 10A of the I.T.Act. The provision regarding the filing of audit report along with the return of income is only directory and not mandatory. The audit report can be filed either during the course of assessment proceedings or during the appellate proceedings. In this context, I rely on the judgment of the Hon ble Delhi High Court in the case of CIT v. Web Commerce (India) Private Limited reported ..... X X X X Extracts X X X X X X X X Extracts X X X X
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