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2015 (9) TMI 287 - DELHI HIGH COURT

2015 (9) TMI 287 - DELHI HIGH COURT - [2015] 378 ITR 693 (Del) - Examine the cross objections filed by the Assessee declined by ITAT - ITAT restored the order of the AO disallowing the claim made by the Assessee under Section 10B - ITAT declined to permit the Assessee to maintain the cross objections on the ground that since the Assessee had not urged the plea of being entitled to the benefit under Section 10 A before the CIT (A), it could not be permitted to urge such plea for the first time be .....

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h 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 to file an appeal/cross-objections before the Tribunal.

Consequentl .....

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ellant : Mr. Ved Jain, Advocate with Mr. Pranjal Srivastava, Advocate For the Respondent : Ms. Suruchi Aggarwal, Senior Standing counsel with Ms. Lakshmi Gurung, Junior Standing counsel ORDER CM APPL No. 9115 of 2015(for exemption) in ITA 334 of 2015 CM APPL No. 9226 of 2015(for exemption) in ITA 338 of 2015 CM APPL No. 9227 of 2015(for exemption) in ITA 339 of 2015 1. Allowed, subject to all just exceptions. 2. The applications are disposed of. ITA Nos. 334 of 2015, 338 of 2015, 339 of 2015 and .....

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. 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 .....

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peal to the Commissioner of Income Tax (Appeals) [CIT(A)]. Meanwhile the ITAT, Delhi Bench in the case of Valiant Communication Ltd. v. DCIT (order dated 23rd April, 2010 in ITA No. 2706/Del/2008), allowed the claim of the Appellant therein under Section 10B by holding that approval by the Joint Director, STPI was sufficient to claim the deduction. On the basis of the above decision, the appeals of the Assessee herein were allowed by the CIT (A) vide order dated 26th October 2012. Since the orde .....

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vailing the benefit of Section 10B of the Act, the certification by the Board was mandatory and that such exemption 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 .....

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ctin 10A and that such approval was sufficient to entitle it to the benefit of Section 10B. But judgment, this Court negatives the plea with regard to the approval vis-vis Section 10B and has ruled that separate regime exists. The applicant contends that the CIT(A) and the Tribunal had, in the present case, not gone into the merits of the alternative claim for entitlement under Section 10A. This fact is apparent from a reading of the order of CIT (A) as well as that of the Tribunal in the order .....

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ls of the Revenue against the order of the CIT(A) for AYs 2008-09 and 2009-10. 13. In the impugned order, the ITAT relied on the decision of this Court in Regency Creations Ltd. (supra) and allowed the Revenue s appeals. The ITAT restored the order of the AO disallowing the claim made by the Assessee under Section 10B of the Act. While taking 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 .....

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Appellant Assessee. The powers of the ITAT while hearing appeals and cross objections have been explained by this Court in CIT v. Edward Keventer (Successors) Pvt. Ltd. (1980) 123 ITR 200 in the following words: Now, adverting to the rights of the respondent in an appeal, we start with the basic idea that, if a party appeals, he is the party who comes before the Appellate Tribunal to redress a grievance alleged by him. If the other side has a grievance, he has a right to file a cross-appeal (and .....

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e objection may be such that it is not only a defence to the appeal itself but goes further and may affect the validity of the entire proceedings. But the entertainment of such a ground would be subject to the restriction that even if it is accepted, it should be given effect to only for the purpose of sustaining the order in appeal and dismissing the appeal and cannot be made use of, to disturb or to set aside, the order in favour of the appellant (See Bamasi v. CIT). This liberty to the respon .....

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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 dealing with the appeals under Section 254 of the Act is expressed in the widest possible terms . It was further observed as under: 5. …..The purpose of the assessment .....

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hat item. We do not see any 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 to file an appeal/cross-objections before the Tribunal. We fail to see why the Tribunal should be prevented from considering questions of law arising in assessment proceedings although not raised earlier. 16. It is pointed out by learned counsel for the .....

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