2012 (8) TMI 895 - AT - Income Tax

Tribunal upholds CIT (A) decision on deduction claim u/s 10A, dismissing department's appeal.

The Tribunal upheld the CIT (A) decision, allowing the appellant's claim for deduction u/s 10A and dismissing the department's appeal. The Tribunal ... Eligibility of deduction u/s 10A - assessee had merely made a revised claim after the time for filing a revised return had elapsed, the assessee was not eligible for deduction u/s 10A of the Act - Held that:- The assessee, on being pointed out by the Assessing Officer that deduction u/s 10B was not available to it, changed its claim to one u/s 10A of the Act, by way of filing a report in Form No.56F before the Assessing Officer. “Goetze (India)” (2006 (3) TMI 75 - SUPREME Court), to our mind, is not attracted to the facts of the present case, since therein, the claim made subsequently was an altogether fresh claim, whereby the returned income got changed. It is not so here. Undisputedly, in the present case, on the change of the claim, neither the returned income, nor the assessed income of the assessee has undergone any change whatsoever Ld. CIT (A) has correctly held the claim of the assessee to be allowable, if found to be in accordance with law. Moreover, the assessee’s eligibility for the claim u/s 10A rather than u/s 10B of the Act nowhere stands disputed. It is only that the department contends that the claim u/s 10A did not exist in the original return and, therefore, it cannot be allowed. We, as per the foregoing discussion, do not subscribe to this view. - Decided in favour of assesse. Issues:1. Eligibility for deduction u/s 10A instead of u/s 10B.2. Validity of alternate claim without a Revised Return of Income.3. Filing of Form No.56F for claiming deduction u/s 10A during assessment proceedings.Analysis:Issue 1: Eligibility for deduction u/s 10A instead of u/s 10BThe appellant, a software company, initially claimed deduction u/s 10B but later realized its eligibility for deduction u/s 10A. The Assessing Officer rejected both claims due to the absence of a revised return. The CIT (A) directed the Assessing Officer to consider the claim u/s 10A. The department contended that the claim was not valid without a revised return. However, the appellant argued that the change in claim did not alter the returned or assessed income. The Tribunal held that the change in claim did not warrant a revised return and relied on precedents to support the appellant's case. The Tribunal found the CIT (A) decision justified and dismissed the department's appeal.Issue 2: Validity of alternate claim without a Revised Return of IncomeThe department argued that the alternate claim for deduction u/s 10A without a revised return was invalid. However, the appellant contended that the change in claim was a correction and not a new claim, thus not requiring a revised return. The Tribunal agreed with the appellant, emphasizing that no fresh claim was made, and the returned income remained unchanged. Precedents were cited to support the appellant's position, leading to the rejection of the department's argument.Issue 3: Filing of Form No.56F for claiming deduction u/s 10A during assessment proceedingsThe Assessing Officer rejected the claim based on the late filing of Form No.56F for deduction u/s 10A during assessment proceedings. The CIT (A) directed the Assessing Officer to consider the form and claim. The department contended that the form filing was irrelevant without an original claim in the return. The Tribunal disagreed, citing case laws where valid claims were accepted even without timely filings. The Tribunal upheld the CIT (A) decision, emphasizing the eligibility of the appellant for the deduction u/s 10A.In conclusion, the Tribunal upheld the CIT (A) decision, allowing the appellant's claim for deduction u/s 10A and dismissing the department's appeal. The Tribunal emphasized that the change in claim did not necessitate a revised return and that the appellant's eligibility for the deduction was valid, despite procedural objections raised by the department.