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TMI Blog2018 (10) TMI 1099X X X X Extracts X X X X X X X X Extracts X X X X ..... equired under clause (iv) of Explanation 2 of section 10B of the Act. 4. The ld. CIT(A) has erred in law and on facts in holding that the assessee is eligible for exemption u/s 10A of the Act; though no such claim was made in the return of income. 5. On the facts and circumstances of the case, the Ld. Commissioner of Income tax (A) ought to have upheld the order of the Assessing Officer. 6. It is, therefore, prayed that the order of the Ld. Commissioner of Income tax (A) may be set-aside and that of the Assessing Officer be restored." 3. The revenue has raised as many as six grounds of appeal but the issue involved is that ld CIT(A) erred in granting the exemption to the assessee u/s 10B of the Act though the specified conditions were not fulfilled. 4. Briefly stated facts are that the assessee is a partnership firm and 100% Export Oriented Unit (EOU) registered under Software Technology Parks of India (STPI). The assessee has claimed deduction u/s 10B of the Act amounting to Rs. 1,27,84,850/- only. The AO during the assessment proceedings observed that the STPI unit of the assessee was not approved by the Board of Approvals as required u/s 10B of the Act. Accordingly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s claimed that necessary approvals have been taken from requisite authorities and Form 56G dated 18.10.2007 from CA has been filed alongwith return of income on 27.10.2007. The appellant is of the view that CBDT has clarified the matter of exemption u/s10A and STPI is the authority under law for such registration and claim and the same instructions also apply in case of deduction u/s.10B. It is submitted that for all practical purposes the STPI is the Development Commissioner as envisaged in law. As per CBDT in its Circular No. 149/194/2004/TPL dated 06.01.2005 and Circular No. 200/20/2006/Income Tax Act, 1961-1 dated 31.3.2006 it has been directed to treat the grant of registration by STPI as valid agency for purposes of Section 10B. Form No.56G says that the appellant (STPI) has got registration certificate on 29.11.2004. The appellant relied on the order of the ITAT in case of Cat Labs P. Ltd, Pune vs Department of Income Tax delivered on 20 February, 2014 in the Income Tax Appellate Tribunal Pune Bench "A", Pune ITA.No.131/PN/2013 (Assessment Year 2009-10) where in the approval by STPI is found to be proper approval for deduction u/s 10B. Further appellant relied on the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter-IX of Export and Import Policy (1992 - 97) applicable to export oriented units (EOUs) and units of Export Processing Zones (EPZs) also apply to the STP units subject to the following modifications:- (a) The word 'STP' shall be substituted for the word "EOU/EPZ" "EOU" or "EPZs", wherever they occur, in the paragraphs. (b) The words "Development Commissioner" wherever they occur shall be substituted by the words "Chief Executive of the STP Society". (c) The word "BOA" wherever it occurs, shall be substituted by the word "IMSC". Therefore, it is clear that STP units are treated at par with units established in export oriented units and export processing zones. Secondly, for the purposes of section 10B, such units require approval from IMSC instead of BOA. This issue has been further clarified by Inter Ministerial Committee Communication dated 23.03.2006 issued by Secretary, Ministry of Telecommunications and Technologies. The salient features of this communication dated 23.03.2006 are reproduced as under:- 1. Software Technology Park of India (STPI) is a society owned and f administered by the Govt. of India and therefore is state under Article 12 of the Consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 7, 8, 9, 10, 11 & 12 of appeal are allowed. 6. In the result, the appeal is partly allowed." Being aggrieved by the order of ld CIT(A) Revenue is in appeal before us. 6. Ld DR before us vehemently supported the order of authorities below. 7. On the other hand, ld AR submitted as under: "The appeal filed by the Revenue is prima facie not tenable and deserves to be dismissed as the grounds of appeal are settled in favor of the assessee by the Income Tax Department in earlier and subsequent years. Honourable ITAT has also upheld the allowability of exemption u/s 10B under the STPI approval scheme. In the earlier years and in the subsequent years, the claim of the assessee u/s 10 B are allowed by the Department on the identical facts in the case of the assessee himself. In the year under consideration also the claim was allowed by the Department, but with the change of the assessing officer the case was reopened u/s 147 without any reason. The case was reopened only on the basis of misinterpretation of facts and without understanding the procedure laid down by Govt. of India in implementing the law relating to exemption u/s 10B Of the IT Act. The matter was explained b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is apparent that the overwhelming view of the Tribunals have been to treat the approval granted by the STPI to be enough for the fulfillment of condition prescribed in sec. 10B for approval of the EOU unit under sec. 14 of Industries (Development & Regulation) Act, 1951 and on this ground the benefit cannot be denied has to be accepted despite the fact that the sec. 10B specifically talks of only registration u/s.14 of Industries (Development & Regulation) Act, 1951. Since the Assessing Officer in this case has only raised this issue, the same has to be not allowed in view of the discussions made above. Ground No. 1 therefore, is allowed. The Tribunal in the above relied cases have also allowed the benefit on the 'principle of consistency', which is applicable in this case also. It was demonstrated by the AR that similar benefit u/s 10B was allowed by AO in earlier assessment years and no action to J withdraw the same has been taken. Thus on this basis also Ground No. 1 is required to be allowed." 8.2 We also note that the ITAT Ahmedabad Bench has also decided the similar issue in favour of the assessee in the case of Quality BPO Services Pvt. Ltd. vs. ACIT in ITA No.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 & 2011-12 consistently, we are of the considered view that the assessee's claim of deduction under section 10B at Rs. 67,08,733/- is justified and accordingly the order of CIT(A) is quashed and the appeal of assessee is allowed." 8.3 In addition to the above, we also note that the ld CIT(A) in the own case of the assessee for the Asst. Year 2009-10 allowed the exemption u/s 10B of the Act after due verification. Against the order of ld CIT(A) for Asst. Year 2009-10, the Revenue has not preferred any appeal which implies that the order of the ld CIT(A) has reached to its finality. Learned DR has also not disputed the fact that the appeal was not preferred by the Revenue against the order of ld CIT(A) for the A.Y. 2009-10 on the issue of exemption u/s 10B of the Act. In such circumstances we are of the view that no appeal can be filed by the revenue, once, the order of ld. CIT(A) in any of the year has reached to its finality. In this regard, we find support and guidance from the judgment of Hon'ble Supreme Court in the case of Union of India and others vs. Kaumudini Narayan Dalal and another reported in 249 ITR 219 wherein, it was held as under: 1. The order under challenge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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