9911796707
TMI Blog2019 (12) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... "(3) The profits and gains referred to in sub-section (1) shall not be included in the total income of the assessee in respect of any ten consecutive assessment years, beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce articles or things, specified by the assessee at his option." (b) The petitioner has set up a Unit engaged in the manufacture and export of computer software in the Financial Year 1996-97 i.e. the Assessment Year 1997-1998. The provisions of Section 10B, as it stood prior to 01.04.1999, granted to an assessee, a tax holiday benefit in respect of any five consecutive assessment years from within a block of eight years, of income derived from the manufacture and export of computer software. The period of five years was extended to ten years, vide amendment to Section 10B(3) vide Finance Act, 2000 with effect from 01.04.1999 which reads as follows :- "(3) The profits and gains referred to in sub-section (1) shall not included in the total income of the assessee in respect of any [ten] consecutive assessment years, [***] beginning with the assessment year relevant to the previous year in which th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o relief under Section 10B. In respect of other issues arising out of draft assessment order, the petitioner filed their objections before the Dispute Resolution Panel. The said authority, while deleting the transfer pricing adjustment, has however decided the adjustment relating to methodology of computation of deduction under Section 10B was decided against the petitioner. The said order was challenged before the Income Tax Appellate Tribunal. By order dated 11.05.2012, the Tribunal allowed the appeal of the petitioner. Thus, the adjustment made and confirmed by the Dispute Resolution Panel relating to the computation relief under Section 10B was reversed by the Income Tax Appellate Tribunal, insofar as it related to ensuring parity between the export turnover and import turnover while computing the deduction under Section 10B of the Act. At this juncture, it is relevant to point out that the Income Tax Department did not, at any stage of proceedings before any of the authorities, raise any dispute regarding the eligibility of the petitioner herein to claim or be granted the relief under Section 10B of the Act. (f) While this is so, the petitioner was surprised to receive a noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessment Year 2007-08 itself was wrong, he issued the notice under Section 148 of the Act rightly as per the provision under Section 147 of the Act. (c) While inserting the Section 10B in the Finance Act, 1988, w.e.f. 01.04.1989, the petitioner have option to seek relief for the year when the activities of manufacture resulted in income between the block of 8 years and not in the years where the activities of manufacture resulted in loss. Later, this Section was amended, which restricted the petitioner's relief for ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture, irrespective of income or loss eared by the petitioner. When there was an option to the petitioner to pick any five assessment years falling within a period of eight years, the petitioner enjoyed the relief whenever it earned income. But, when the act amended so that relief will be allowed for a ten consecutive years from the commencement of manufacture, the petitioner refused to accept the eligibility of claiming deduction under Section 10B of the Act automatically expired by the Assessment Year 2006-07 even though thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... W.A.No.200 of 2019 dated 24.06.2019. 5. Per contra, Mr.A.P.Srinivas, learned standing counsel appearing for the respondent after reiterating the contentions raised in the counter affidavit further submitted as follows :- The petitioner is not entitled to seek benefit under Section 10B of the Act, both under the said provisions as existed prior to 01.04.1999 and after the amended Act in 1999. The petitioner, infact, has not disclosed true and full materials fact while filing the return. The petitioner has wrongly claimed the number of consecutive year as 10th year for claiming the deduction for unit No.1 while infact, it is only 11th year. He further submitted that in view on the decision made by the Apex Court in "Commissioner of Income Tax, Delhi Vs. Kelvinator of India Limited" case reported in "2010 320 ITR 561", the Assessing officer has rightly reopened the assessment and therefore, the same need not be interfered by this Court. The learned counsel further pointed out that the decision relied on by the learned counsel appearing for the petitioner in MBI Kits International case, is factually distinguishable and therefore, the same cannot be applied to the present facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to only see that as to whether these two relevant dates referred to at Serial Nos.7 and 8, are factually incorrect, so as to derive a conclusion that the petitioner has not truly and fully disclosed the material facts. As this Court finds that there is no dispute with regard to the date of commencement of manufacture of the product namely 01.04.1996, when the petitioner has chosen to claim direction from the second year onwards, the number of consecutive years for which deduction is claimed referred to at Serial No.8 is certainly the 10th year and therefore, such statement by the petitioner at Serial No.8, cannot be termed as false statement or claim. 11. When such being the position, I find that the Assessing Officer is not justified in reopening the assessment in the absence of failure on the part of the assessee to truly and fully disclose the material fact. At this juncture, it is relevant to note that the finding rendered by this Court in MBI Kits International case at paragraph Nos.15 and 16 which reads as follows :- "15. According to the Revenue, if the date of commencement of manufacture or production referred to in the Column No.7 in Form No.56G as 28.03.2000 is take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation regarding the date of commencement of manufacture as 28.03.2000 alone, had obtained deduction under Section 10B. Thus, it is seen that the Assessing Officer, who has originally chosen to allow the deduction based on the materials filed already, has now changed his opinion and has chosen to reopen the assessment, which in my considered view, cannot be done after a period of four years." 12. It is further seen that the said order of this Court was confirmed by the Division Bench in writ appeal in W.A.No.200 of 2019 dated 24.06.2019 wherein, it is observed as follows :- "Keeping aside all these issues, we have examined the correctness of the order passed by the learned Single Bench and we note with approval the findings of the learned Single Bench in paragraphs 16 and 17 of the impugned order. The above finding rendered by the learned Single Bench is just and proper. As pointed out by the learned Single Bench every non-disclosure of material facts will not or cannot be a justifiable reason for reopening an assessment. We reiterate that what was required to be considered is that, substance over form. Therefore, we are of the considered view that the learned Single Bench was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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