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2015 (1) TMI 1010 - AT - Income TaxRevision u/s 263 - claim of deduction u/s.10B was allowed by AO without proper investigation - Held that:- In a situation when the admitted factual position was that the order of the AO was a cryptic order without considering the substantial claim of exemption u/s.10B of ₹ 3,26,27,651/- then in our humble opinion such an order can be reviewed by learned Commissioner u/s.263 of IT Act. Although certain notices u/s.143(2)/142(1) were issued but we have found that the issue was not examined in the light of the provisions of Section 10B, Explanation 2(iv) of IT Act by the AO. Facts have revealed that the assessee was granted approval as 100% export oriented unit (EOU) by the Director of the Software Technology Parks of India (STPI) Gandhinagar for IT enabled services. Learned Commissioner has therefore raised objection that STPI was not competent to grant such approval being simply a Society and the approval was required to be granted by Development Commissioner under Ministry of Chemicals and Industry as prescribed in one of the CBDT instruction dated 9th March, 2009. Due to these reasons, we hereby hold that the order passed u/s.263 of IT Act is an order sustainable in the eyes of law. We uphold the order u/s.263 for a limited purpose that the claim of deduction u/s.10B was allowed by AO without proper investigation. But simultaneously we are also of the view that learned Commissioner has exceeded the jurisdiction by unilaterally directing the AO to pass a fresh order by disallowing the claim u/s.10B of IT Act. According to us, learned Commissioner could have examined both the aspects of the issue that whether the assessee is entitled for the exemption as prescribed u/s.10A of IT Act, especially under the circumstances when this legal argument was raised before him. According to us, learned Commissioner could have referred the issue of alternate claim of exemption u/s.10A back to the AO to be decided afresh after considering the provisions of the Act in the light of the evidences filed. We hereby modify the directions of learned Commissioner that instead of disallowing the claim of deduction u/s.10B, the AO is hereby directed to examine the alternate legal claim of the assessee and thereupon pass an appropriate assessment order. - Decided partly in favour of assessee.
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