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2022 (4) TMI 1596 - AT - Income TaxRevision u/s 263 - Disallowance u/ 10AA - as per CIT assessee has incorrectly filed claim of exemption u/s 10AA of the Act in an incorrect format, which has been accepted by the Ld. AO - CIT observed that the assessee had incorrectly submitted form 56G (instead of form 56F) which is required for claiming exemption u/s. 10B - HELD THAT:- It is a well accepted principle of law that beneficial provisions should be given a liberal construction and once the assessee has satisfied the conditions laid down for claiming deduction/exemption under the relevant beneficial provision, the same should not be denied. We are of the view that exemption benefits u/s 10AA cannot be denied to the assessee on account of a procedural lapse committed by the Chartered Accountant of the assessee. We must always keep the object of the Act in view while interpreting the section. The legislative intention must be the foundation of the court’s interpretation. Once an assessee falls within the ambit of a beneficial provision, then the said provision should be liberally interpreted. Section 10AA of the Act is a beneficial provision aimed at encouraging exports of goods and services by setting up of industrial units in special economic zones. In our view, benefit of section 10AA should not be denied on account of a procedural/ technical default by the assessee or his chartered accountant by invoking revisionary jurisdiction u/s 263 of the Act, if otherwise the assessee is eligible to claim deduction under the said exemption provision. Whether there is sufficient compliance once assessee has filed the revised Form 56F in section 263 proceedings before Pr. CIT.? - CIT has initiated 263 proceeding only on account of an inadvertent error on the part of the chartered accountant of the assessee by filing form 56G instead of form 56F in support of claim of deduction u/s. 10AA of the Act. This error has also been rectified by the A.R. of the assessee during the course of 263 proceeding wherein revised form 56F for claiming deduction u/s. 10AA of the Act was produced before Pr. CIT during 263 proceeding. We are therefore of the view that there is sufficient compliance if the correct form 56F has been filed during the course of revisionary proceeding, there is no material objective to be achieved by directing revision of the original assessment order once the procedural lapse for which revisionary proceedings has been initiated has been rectified during 263 proceedings. Whether once the Ld. AO has examined the claim u/s 10AA of the Act and has accepted the same, on appreciation of documents placed on record, can it be said that the twin conditions of section 263 of the Act viz. order passed is erroneous and prejudicial to the interests of revenue are satisfied? - As in the instant case though there may be a procedural breach, but on the aspect of claim of deduction u/s 10AA, the issue has been analyzed by the Ld. AO in detail during the assessment proceedings and relied granted accordingly. Even in the 263 proceedings, the Ld. Pr. CIT has not challenged the assessee’s eligibility to claim deduction u/s 10AA of the Act nor has he pointed out any error in the findings of the Ld. AO with regards to the assessee’s claim u/s 10AA of the Act. The only contention of Ld. Pr. CIT is that the Ld. AO failed notice that claim of exemption u/s 10AA of the Act has been filed in an incorrect Form, which the assessee revised during the course of revisionary proceedings. In our considered view, in the instant facts, the twin conditions of section 263 of the Act viz. order passed is erroneous and prejudicial to the interests of revenue are not satisfied in the instant facts. In our view, Ld. Pr. CIT erred in law and in facts in invoking section 263 of the Act to revise the order of Ld. AO - Decided in favour of assessee.
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