TMI Blog2021 (1) TMI 1007X X X X Extracts X X X X X X X X Extracts X X X X ..... be erroneous and prejudicial to the interest of the revenue. The view taken by the AO cannot be said to be a plausible view. It is also pertinent to mention here that no reasons have been assigned by the Assessing Officer for holding the assessee eligible for benefit of deduction under Section 10A - Since, the issue with regard to eligibility of the assessee for deduction under Section 10A of the Act for Assessment Year 2008-09 beyond a period of 10 consecutive years was not subject matter of order of assessment itself. Therefore, the same could not have been the subject matter of the appeal before the Commissioner of Income Tax (Appeals) and thus, in the fact situation of the case there was no bar in invoking the powers under Section 263 - The income of the assessee from staffing, which was not an income from export of computer software was also allowed by the Assessing Officer without any application of mind and without any enquiry. Therefore, the Commissioner of Income Tax has rightly invoked the powers under Section 263 of the Act in the fact situation of the case. - Decided against assessee. - I.T.A. NO.353 OF 2014 - - - Dated:- 7-1-2021 - Hon ble Mr. Justice Alok A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a private limited company incorporated under the Companies Act, 1956 and is engaged in the business of development software and certain Information Technology Enabled Services(ITEs) activity. The assessee was initially accorded approval for setting up a unit under software technology park scheme on 06.09.1994. The licence granted to the assessee was valid upto 05.09.2009 which was renewed subsequently upto 05.09.2014. For the Assessment Year 2008-09, the assessee filed the return of income on25.10.2008, by which total income was declared as NIL after claiming exemption of ₹ 16,20,65,750/- underSection 10A of the Act. 3. The case of the assessee was selected for scrutiny and a notice under Section 143(2) and Section 142 of the Act was issued to the assessee. The assessee responded to the aforesaid notices by filing replies and by furnishing documents. The Assessing Officer by an order dated 24.12.2010 inter alia held that assessee is entitled to deduction under Section 10A of the Act and quantified the amount claimed as deduction under Section 10A of the Act. 4. The assessee thereupon filed an appeal before Commissioner of Income Tax (Appeals) who by an order dated 02. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Direct Taxes (CBDT) vide circular No.1/2013 dated 17.01.2013. The assessee thereupon filed an appeal before the tribunal. The tribunal by an order dated 14.03.2014 has dismissed the appeal. In the aforesaid factual background, the assessee has filed this appeal. 6. Learned counsel for the assessee submitted that the Assessing Officer had made enquiries during th scrutiny proceeding and the Assessing Officer has taken one of the plausible views. Therefore, the tribunal ought to have appreciated that the Commissioner of IncomeTax committed an error of law in invoking the powers under Section 263 of the Act in the fact situation of the case. It is further submitted that human resource services would qualify for deduction under Section 10A of the Act and the aforesaid view was taken by the tribunal was taken by the division bench of Delhi High Court vide decision dated 03.09.2014 passed in I.T.A.No.1255/2011, which was followed by this court in COMMISSIONER OF INCOME TAX AND ANR. MS. NTT DATE GLOBAL ADVISORY SERVICES PVT. LTD. IN ITA NO.544/2013 decided on 12.11.2020. It is further submitted that in view of Section 10A(8) of the Act, which begins with a non obstante clause. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acture or produce such articles, things or computer software. It is pointed out that in theinstant case, the assessee commenced manufacturing activities from Assessment Year 1995-96, however, the assessee did not claim deduction under Section 10A of the Act for Assessment Year 1995-96, 1996-97 and 1997-98 and therefore, the period of five years out of a period of eight years had to be completed from 1998-99 and the same expired in 2002-03. In view of the amendment to Section 10A of the Act by Finance Act,2000 with effect from 01.04.2001, the assessee was permitted to claim benefit of Section 10A of the Act for the unexpired period. It is urged that even as per amended provisions, the period of 10 consecutive years has to commence with Assessment Year relevant to Previous Year in which undertaking begins to manufacture or produce such articles, things or computer software. Thus, the period of 10 consecutive years would start from 1995-96 and would end with Assessment Year 2004-05. 9. It is also contended that incentive provision have been provided only for a particular period and the benefit cannot be extended beyond the outer limit of 10 consecutive Assessment Years commencing f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejudicial to the interests of the revenue, he, may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. 11. Thus, from close scrutiny of Section 263 it is evident that twin conditions are required to be satisfied for exercise of revisional jurisdiction under Section 263 of the Act firstly, the order of the Assessing Officer is erroneous and secondly, that it is prejudicial to the interest of the revenue on account of error in the order of assessment. 12. The aforesaid provision was considered by the Supreme Court in MALABAR INDUSTRIAL COMPANY VS. CIT , 243 ITR 83and it was held that the phrase prejudicial to the interests of the revenue has to be read in conjunction with an erroneous order passed by the Assessing Officer and every loss of revenue as a consequence of the order of the Assessing Officer cannot be treated as prejudicial to the interest of revenue. It was further held that where two views are possi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
