TMI Blog2016 (3) TMI 1020X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer, Department of Information Technology and by the Inter-ministerial Standing Committee (IMSC). Hence, the approval granted under STP Scheme complies with all the requirements contemplated u/s. 10B of the Act when read with Industrial (Development & Regulations) Act, 1951, Foreign Trade Policy 2004-2009, Hand book of Procedures (Volume-I) & Appendix to the Handbook As find that the contents of audit report in form no. 56F and 56G together with the computation mechanism remains the same for claiming the deduction u/s. 10A/10B of the Act.the assessee is entitled to claim the benefit of deduction under the provisions of section 10A as well as section 10B of the Act. Hence we find no infirmity in the impugned orders of the ld.CIT(A) in deleting the disallowance as made by the ld.AO on this issue. We uphold the impugned orders of the ld.CIT(A). - Decided against revenue - ITA No. 628/Kol/2011, ITA No. 65/Kol/2012, C.O No. 133/Kol/2013 - - - Dated:- 4-3-2016 - Shri Mahavir Singh, Judicial Member, and Shri M. Balaganesh, Accountant Member For The Appellant : None appeared on behalf of the revenue For The Cross Objector/Assessee : Shri Subash Agarwal, Advocate, ld.AR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 10B of the Income Tax Act, 1961 as appellant has commenced Call Centre operations from Software Technology Park (STP) with effect from 16th February, 2006 set up in accordance with STP Scheme of the Government of India. 2. That on the facts and in circumstances of the case and in law, the Ld. Commissioner of Income tax (Appeals) ought to have allowed deduction under section 10A of the Income Tax Act, 1961 and not under section 10B of the Income Tax Act, 1961 as appellant was approved by the Director under the Software Technology Parks scheme and the said Director was functioning under the delegated authority of the Inter- Ministerial Standing Committee. CO No. 133/Kol/2013 A.Y 2008-09 [ ITA No.65/Kol/2012 ] (by the assessee) 1. That on the facts and in circumstances of the case and in law, the Ld. Commissioner of Income tax (Appeals) ought to have allowed deduction under section 10A of the Income Tax Act, 1961 and not under section 10B of the Income Tax Act, 1961 as appellant has commenced Call Centre operations from Software Technology Park (STP) with effect from 16th February, 2006 set up in accordance with STP Scheme of the Government of India. 2. That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2005- 06: 1548 dt. 10.01.06 and the legal agreement executed on 20.01.2006 will be considered as 100% EoU activity with effect from the date of its registration under STP i.e. 10.01.2006. v) Form No. 56G [Rule 16E], a report required u/s 1O B of the Income Tax Act, 1961. vi) Copy of certificate of Importer-Exporter Code (IEC) dt. 12.03.2003. vii) Copy of form of application for grant of licence for Public Private Bonded Warehouse- viz. Section 57/58 of the Customs Act. viii) Copy of a letter dt. 03.04.2007, issued by the Asstt. Director, Dept. of Telecom, Govt. of India, New Delhi on the subject, i.e. Registration for setting up an International Call Centre at Kolkata by the Company. 7. The ld.AO observed that the assessee did not have certificate of approval from the Board as 100% Export Oriented Unit (EOU)/ undertaking approved by the Board appointed in this behalf by the Central Government and in accordance with section 14 of the Industries (Development Regulation) Act (IDRA), 1951 and the rules made under that Act for the purpose of getting exemption allowable u/s. 10B of the Act. Accordingly, the assessee was asked to show cause why the deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the revenue is rejected by the bench as the Learned Senior DR had sought adjournment for 16 cases out of 21 cases listed in the bench. So we proceed to dispose off the appeals and cross objections after hearing the ld.AR and perusing the materials available on record on merits. 9. The ld.AR vehemently supported the orders of the ld.AO in granting deduction and the submissions made therein. He also placed his reliance on the decision of the ITAT Chandigarh in the case of Bebo Technologies (P) Ltd Vs. JCIT in ITA Nos. 1115/Chd/2008, 116/Chd/2009 dated 29-04-2011 reported in 2011 (4) TMI 870-ITAT, Chandigarh, in support of its contention. 10. We have heard the ld.AR and perused the materials available on record including the paper book as filed by the assessee before us. The facts as stated herein above remain undisputed and hence the same are not reiterated for the sake of brevity. We find from page 43-46 of the assessee s paper book containing an agreement entered into by the assessee for software export technology park with the Central Government on 20th day of January, 2006, wherein the following clauses require careful consideration:- WHEREAS the Government hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. We also find lot of force in the alternative argument made by the ld.AR that the assessee company being registered with STP is entitled for claiming deduction u/s. 10A of the Act. In this connection, the CBDT s instruction no. 1/2006 dated 31-03- 2006 assumes great significance. The same is reproduced herein below for better appraisal :- SECTIONS 10A AND 10B FREE TRADE ZONES / 100% EXPORT ORIENTED UNDERTAKINGS, EXEMPTION FOR NEW INDUSTRIAL UNDERTAKINGS IN [SECS.10A AND 10B] Deduction to STPs - Instances have been brought to the notice of the Board that a large number of units registered/ approved by the Directors of the STPI are claiming deduction under section 10A whereas the STP scheme requires approval by the Inter-Ministerial Standing Committee of the Department of Electronics. Accordingly, the cases of such claimants have been reopened by the authorities. The matter has been examined in consultation with the officers of the Department of Information Technology (earlier, Department of Electronics). In view of the ambiguity in the legal status of the approval by Director of STPs, the Inter-Ministerial Standing Committee will meet to consider the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uent amendments and EXIM Policy ( Foreign Trade Policy. 2. As per Para 6.26 of Foreign Trade Policy 2004-2009: 'In the case of units under EHTP /STP Schemes, necessary approval/ permission under relevant paragraphs of this Chapter shall be granted by the officer designated by the Ministry of Communication and Information Technology, Department of Information Technology instead of the Development Commissioner and by the Inter-Ministerial Standing Committee (IMSC) instead of BOA: 3. Approval of your unit is granted by Director, STPI as per powers delegated on him by the IMSC. Thanking you. Yours faithfully, Sd/- [Manjit Nayak] Officer- In -Charge Copy to: 1. The Director, STPI-Kolkata / Guwahati 15. It was also brought to our attention by the ld.AR that the Instruction (F.No.178/19/2008-IT-I) dated 9th March 2009 issued by CBDT clarifies that the power to grant approval u/s. 14 of industrial (Development Regulations) Act, 1951 has been delegated to Development Commissioners and approval granted by the Development Commissioner shall be considered valid for the purpose of exemption u/s. 10B. It would be pertinent t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o deduction u/s 10B of the Act as a 100% EOU on being registered with STPI. In the entirety of facts and circumstances of the case and in view of our observation in paras hereinabove, we uphold the order of CIT(A) in holding that the assessee is eligible to the exemption claimed u/s. 10B of the Act. Accordingly, ground No.2 raised by the revenue is thus dismissed. 16. We also find glaring similarities between Section 10A and 10B of the Act as below:- 17. We find that the assessee is also entitled for benefit of deduction u/s. 10A of the Act in the facts and circumstances of the case, though the assessee had not claimed the same under that section in the return of income. In this regard, we would like to place reliance on the decision of the co-ordinate bench of the ITAT Mumbai in the case of ITO Vs. Accentia Technologies Limited in ITA No. 1871/Mum/2011 dated 08- 05-2014, wherein it was held that : 6. Having regard to the circumstances of the case the learned CIT(A) called for a remand report. Upon obtaining the remand report he noticed the following undisputed facts i.e., (a) there is no dispute regarding the amount which is claimed as exempt under section 10A o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19. We find that the decision of the Hon ble Jurisdictional High Court in the case of CIT Vs. India Capacitors Ltd reported in 180 ITR 641 also supports this proposition. We further find that the alternative argument of the ld.AR has got lot of force as it may be appreciated that there was no mala fide intention on the part of the assessee in not claiming the deduction under the correct section. In fact, it could be appreciated that the assessee had only run the risks of not having been able to avail the benefit of justice and not gained anything by not claiming deduction under the correct section. The Hon ble Supreme Court in the case of CIT Vs. Mahalaxmi Sugar Mills Co. Ltd reported in (1986) 160 ITR 920(SC) has observed as under:- There is a duty cast on the Income-tax Officer to apply the relevant provisions of the Indian Income-tax Act for the purpose of determining the true figure of the assessee's taxable income and the consequential tax liability_ That the assessee fails to claim the benefit of a set-off cannot relieve the Income-tax Officer of his duty to apply section 24 in an appropriate case. Hence, we find that the above principle holds good and i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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