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2015 (9) TMI 287

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..... AT while hearing appeals and cross objections have been explained by this Court in CIT v. Edward Keventer (Successors) Pvt. Ltd. (1979 (11) TMI 73 - DELHI High Court) wherein held he Tribunal, in deciding an appeal, is not confined to the grounds set forth in the memorandum of appeal or those which the appellant may urge with its leave. It can decide the appeal on any ground provided only that the affected party has an opportunity of being heard on that ground. Also see NTPC v. CIT (1996 (12) TMI 7 - SUPREME Court) as held reason to restrict the power of the Tribunal under Section 254 only to decide the grounds which arise from the order of the Commissioner of Income-tax (Appeals). Both the assessee as well as the Department have a right t .....

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..... owing question is framed: Whether the ITAT was correct in law in not examining the Assessee's cross objections? 6. The background facts are that the Assessee is engaged in the business of software development and is registered with the Software Technology Park of India ( STPI ) Noida. The Assessee is a hundred percent export oriented unit ( EOU ) having been duly approved as such by the Joint Director, STPI, Ministry of Communication and Information Technology, Government of India. 7. The Appellant Assessee filed its return of income for AYs 2008-09 and 2009-10, declaring nil income and claiming deduction under Section 10B of the Act in respect of the profit derived from export of computer software. 8. The Assessing Office .....

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..... tion could not be granted on the basis of the certificate issued by the Joint Director. 11. The Respondent Assessees in the above cases, including Valiant Communications Ltd. and Regency Creations Ltd. filed applications before this Court for clarification that even though they may not be entitled to the benefit under Section 10B, they should not be denied the benefit under Section 10A as they satisfied the requirements for availing the benefit under Section 10A. On these applications, this Court passed the following order on 4th January 2013: Issue notice. Sh. Kiran Babu, Sr. Standing Counsel accepts notice on behalf of the Revenue. The applicant assessee had succeeded before the Tribunal in the contention that it was entitled to .....

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..... ing up the cross-objections, although the delay in filing was condoned, the ITAT declined to permit the Assessee to maintain the cross objections by following the decision of the Coordinate Bench of the ITAT in ITO v. Neetee Clothing (P)Ltd. [2010] 129 TTJ 342 (ITAT [Del]), on the ground that since the Assessee had not urged the plea of being entitled to the benefit under Section 10 A of the Act before the CIT (A), it could not be permitted to urge such plea for the first time before the ITAT. 14. Having heard the learned counsel for the parties, the Court is of the view that ITAT was in error in declining to examine the cross objections filed by the Appellant Assessee. The powers of the ITAT while hearing appeals and cross objections ha .....

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..... owers of the Tribunal while disposing of the appeal. Rule 12, earlier referred to, also lays down that the Tribunal, in deciding an appeal, is not confined to the grounds set forth in the memorandum of appeal or those which the appellant may urge with its leave. It can decide the appeal on any ground provided only that the affected party has an opportunity of being heard on that ground. But it has been laid down in a number of cases that this rule does not enable the Tribunal to raise a ground, or permit the party who has not appealed to raise a ground, which will work adversely to the appellant and result in an enhancement. 15. The Supreme Court in NTPC v. CIT(1998) 229 ITR 383 SC has also explained that the power of the Tribunal in de .....

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..... the matters in Valiant Communications Ltd. cases to the ITAT was precisely to consider whether the benefit under Section 10A could be granted to those Assessees notwithstanding that they may not be entitled to the benefit under Section 10B. It was, therefore, open to the Appellant Assessee herein to seek support of the order of the CIT (A) on the ground which was not urged before the CIT (A) as long as it was not going to be adverse to the case of the Appellant i.e. the Revenue before the ITAT. The ITAT in considering such plea was not going to be persuaded to come to a different conclusion as far as the appeal of the Revenue pertaining to the benefit under Section 10B of the Act was concerned. Particularly in the light of the order passed .....

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