Section 10A deduction upheld for an eligible exporter making an alternate claim during assessment with the prescribed audit report.

Deduction under section 10A was available where the assessee, a 100% EOU approved by STPI, raised the claim during assessment proceedings and filed the prescribed audit report before completion of assessment, even though the original return had claimed section 10B and no revised return was filed. The tribunal distinguished Goetze (India) because this was an alternate claim by an otherwise eligible assessee that satisfied the statutory conditions within the assessment process. The Revenue's objection failed, and the Assessing Officer was directed to verify quantification and compliance and then allow the deduction after giving the assessee a reasonable opportunity of being heard.

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Issues: Whether the assessee was entitled to deduction under section 10A of the Income-tax Act, 1961 when the claim was made during assessment proceedings, supported by the prescribed audit report, though not made in the original return and no revised return was filed.

Analysis: The assessee was a 100% EOU approved by STPI and had initially claimed deduction under section 10B under a mistaken impression. During assessment, it furnished the audit report in the prescribed form and sought deduction under section 10A. The claim was supported by the statutory requirements applicable to section 10A and the audit report was produced before completion of assessment. The Revenue's reliance on Goetze (India) was distinguished because the case involved an alternate claim on facts where the assessee was otherwise eligible and had complied with the relevant conditions before assessment was completed.

Conclusion: The assessee was eligible for deduction under section 10A and the Revenue's objection failed. The Assessing Officer was directed to verify the quantification and compliance and allow the deduction after giving the assessee a reasonable opportunity of being heard.

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