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TMI Blog2019 (3) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... rom which has been claimed as exempt u/s 10B of the Act. The assessee was registered under the Software Technology Park (STP in short) scheme as 100% Export Oriented Unit (EOU in short) on 28.1.2005. The same was subsequently renewed on 27.7.2010. The green card was issued to the assessee by the designated officer for Secretary to the Government of India, Department of Information Technology and Chairman Inter Ministerial Standing Committee on Software Technology Park Scheme. The assessee does not have any approval from the Board of Approval for EOU Scheme. The claim of deduction u/s 10B of the Act was disallowed by the ld AO. 4. The entire debate and argument of the A.O. who has disallowed the benefit u/s 10B and the assessee who has argued his case for eligibility of exemption of its income u/s 10B revolves around certain provisions of Sec. 10B which is clearly mentioned in CBDT Instruction No. 2/2009 dated 09.03.2009 as rectified by Instruction of even number on 08.05.2009. The following is extract of instruction: "Section 10B of the Income Tax Act provides for exemption of income in case of hundred per cent export oriented undertakings subject to prescribed conditions. Expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offered by the assessee gives simplistic interpretation that few constituents of the Board constitute the entire Board. 7. The revenue pointed out that the above cited Instruciton of the Board dated 8.5.2009 was much more subsequent to the year 1999, the delegation of which has been made the basis of the opinion of the Deputy Director, STPI has been considered by the Board., as it mentions - "Subsequent to the delegation of this power by the Ministry of Commerce and Industries" Accordingly, the ld AO observed that it could be concluded that in order to avail the exemption of income u/s 10B of the Act, the assessee must fulfill the two conditions mentioned above i.e. it should be approved by Deputy Director STPI and subsequent to the same, the approval must be ratified by the Board of Approval. As no such approval has been obtained by the assessee in the instant case, the exemption sought by them u/s 10B of the Act is to be denied. This action of the ld AO was upheld by the ld CITA. Aggrieved, the assessee is in appeal before us. 8. We have heard the rival submissions. We find that this issue is already settled in favour of the assessee by the decision of this tribunal which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T ORIENTED UNIT FOR COMPUTER SOFTWARE. THIS UNIT IS ENTITLED TO TOP PRIORITY TREATMENT FROM ALL CONCERNED CENTRAL AND STATE GOVERNMENT DEPARTMENTS AND OTHER ORGANISATIONS IN ALL MATTERS RELATING TO THE PROJECT TAXPUNDIT.ORG Sd/- DESIGNATED OFFICER FOR SECRETARY TO THE GOVT OF INDIA DEPARTMENT OF INFORMATION TECHNOLOGY AND CHAIRMAN, INTERMINISTERIAL STANDING COMMITTEE ON SOFTWARE TECHNOLOGY PARK SCHEME." 11.1 The above green card approval has to be understood in its true and fullest sense in the larger interest and purpose behind setting up a unit and the allied benefits it is likely to bring. These export benefits would automatically be eligible for deduction u/s. 10B of the Act. Otherwise, the purpose of granting the same for setting up a unit and registering with STP as 100% EOU status would get defeated. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormation Technology, Dept of IT, Govt. of India Plot No.5/1 DP Sector-V, Salt Lake, Kolkata-700 091 Ph: 91-33-2367- 3598/99-2367 3798/99, Fax 91-33- 2367-3597 Email:[email protected]/URLhttp://www.kol.stp.in To The Director Wizard Enterprises Pvt. Ltd. 5, Lake Avenue, Kolkata - 700026 SUB: YOUR STP UNIT APPROVAL RATIFICATION REG. REF: Your letter dt: 29.08.2011 Sir, With reference to above and discussions with your officials, the facts w.r.t, your STP unit registration is produced below: 1. Your unit 'Wizard Enterprises Pvt. Ltd.' is registered as a 100% Export Oriented Unit under STP scheme vide LOP no. STPK:DIR:441:2005-06:1548 dt: 10.01.2006 as per notification no. 33/(RE)(92-97 dt: 22.03.1994 read with subsequent 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 St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id committee was also empowered to consider the proposals for industrial license, foreign technical collaboration, agreement and import of .capital goods. The assessee has furnished the Registration under the Software Technology Park Scheme of India vide approval No. STPIM/PCMG/PSE/02/199-7492 dated 17.2.2003 registering the assessee as an 100% EOU. The copy of the said certificate is enclosed at pages 105 to 109 of the paper book alongwith the copy of the agreement entered into by the assessee company with STPI on 17.2.2003, a copy of which is enclosed at pages 111 to 113 of the paper book. In view of the above said evidence, upholding the order of CIT(A), we hold that the assessee is entitled to 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:- Whether applies Whether applies 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision of the ld.AO is to educate the assessee of its rights and entitlements as per law and cannot take advantage of ignorance of assessee. In this regard, he cited the relevant extract of the decision of the Hon'ble Bombay High Court in the case of Sanchi Software & Solutions Pvt. Ltd Vs. CIT reported in (2012) 349 ITR 404 (Bom), wherein it was held as under:- "Income-tax Department cannot take advantage of the assessee's mistakes in not claiming the exemption in the Income-tax Return and not deny him exemption. The entire object of administration of tax is to secure the revenue for the development of the country and not to charge the assessee more tax than that which is due and payable by the assessee." 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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