2015 (3) TMI 220 - AT - Income Tax

Tribunal overturns CIT(A) decision on S.10A claim, emphasizing fair opportunity and individualized assessments.

The Tribunal allowed the appellant's appeal, setting aside the CIT(A)'s decision on the alternative claim under S.10A. The judgment stressed the ... Deduction u/s 10B - Held that:- As for the disallowance of the assessee's claim for deduction under S.10B of the Act, the Assessing Officer disallowed the same, for want of approval of the Board/Ratification by Inter-Ministerial Standing Committee appointed by the Ministry of Industry, Department of Industrial Development as envisaged in clause (iv) to Explanation 2 to S.10B of the Act. It was the contention of the assessee that corresponding claim having been accepted in the preceding years, there is no justification for the disallowance in the year under appeal. Observing that principle of res judicata does not apply to the proceedings under Income-tax Act, in which each year is an independent unit of assessment, the CIT(A) sustained the disallowance made by the Assessing Officer. In the absence of anything to the contrary brought on record by the assessee, we do not find any justification to interfere with the orders of the Revenue authorities on this aspect. Claim u/s 10A - Held that:- It has been averred that the CIT(A) in the course of appellate proceedings, enquired with the officials of the assessee company, whether they could furnish the report in Form 56F if the matter was remanded to the file of the Assessing Officer for examination of alternative claim of the assessee under S.10A of the Act, and the said enquiry by the CIT(A) was responded by the officials in affirmative. Considering totality of facts and circumstances of the present case, and following the consistent view taken by the coordinate benches of the Tribunal, we find that the CIT(A) was not justified in declining to admit the additional grounds raised by the assessee with regard to alternative relief under S.10A of the Act. We accordingly set aside the impugned order of the CIT(A), and restore the matter to the file of the Assessing Officer with a direction to examine afresh the alternative claim of the assessee under S.10A of the Act - Decided in favour of assesse. Issues: Disallowance of claim for exemption under S.10B and alternative claim under S.10ADisallowed Claim under S.10B:The appellant, engaged in software development and IT services, claimed exemption under S.10B but lacked approval from the Board/Ratification Committee, leading to disallowance by the Assessing Officer. The CIT(A) upheld this decision, citing each year as an independent assessment unit. The appellant's argument of past acceptance was rejected, and the Tribunal found no grounds to interfere with the Revenue's decision.Alternative Claim under S.10A:The appellant sought an alternative deduction under S.10A, initially disallowed by the CIT(A) due to lack of an accountant's report in Form 56F. Despite the appellant's reliance on precedents and willingness to provide the required report, the CIT(A) refused to admit the additional grounds. The Tribunal, considering consistent Tribunal decisions, overruled the CIT(A) and remanded the matter to the Assessing Officer for fresh examination of the alternative claim. The Assessing Officer was directed to allow the appellant a fair chance to present evidence and decide on the claim appropriately.Conclusion:The Tribunal allowed the appellant's appeal for statistical purposes, setting aside the CIT(A)'s decision on the alternative claim under S.10A. The judgment emphasized the importance of providing a fair opportunity to substantiate claims and highlighted the need for a comprehensive assessment based on the facts and circumstances of each case.