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Appeal partly allowed by ITAT, remits exemption issues for reevaluation The appeal was partly allowed by the ITAT, remitting the issues of exemption u/s 10B and 10A back to the AO for reevaluation. The company's claim for ...
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Appeal partly allowed by ITAT, remits exemption issues for reevaluation
The appeal was partly allowed by the ITAT, remitting the issues of exemption u/s 10B and 10A back to the AO for reevaluation. The company's claim for exemption u/s 10B was rejected due to lack of approval by the Interministerial Standing Committee, but the ITAT directed a review considering the company's eligibility for deduction u/s 10A. The company's additional ground for exemption u/s 10A was initially dismissed by the CIT(A) but was later deemed valid by the ITAT, emphasizing the company's right to be heard.
Issues: 1. Entitlement to exemption u/s 10B for a software services company. 2. Entitlement to exemption u/s 10A for the same company.
Entitlement to Exemption u/s 10B: The appeal pertains to the denial of exemption u/s 10B for the assessment year 2009-10. The Assessing Officer (AO) rejected the claim as the company was not approved by the Interministerial Standing Committee as required by the law. The company had submitted approval from the Director, STPI, Hyderabad, which was deemed inadequate. The CIT(A) upheld the AO's decision. The appellant contended that even if not eligible for exemption u/s 10B, they should be eligible for deduction u/s 10A due to fulfilling conditions. The AR argued that the rejection based on lack of Form No. 56F submission was incorrect. The ITAT Hyderabad Bench referred to precedents and remitted the issue back to the AO for proper examination.
Entitlement to Exemption u/s 10A: The company also raised an additional ground for exemption u/s 10A before the CIT(A), which was dismissed. The CIT(A) cited the requirement of filing a revised return for such claims, following the Goetz India Ltd. case. The AR argued that the restriction on fresh claims without a revised return applies only to proceedings before the AO. The ITAT referred to relevant case law and held that the CIT(A) erred in not entertaining the additional ground. The company's alternative claim u/s 10A was deemed valid, and the issue was remitted back to the AO for proper consideration, ensuring the company's right to be heard.
In conclusion, the appeal was partly allowed for statistical purposes, with the ITAT remitting the issues of exemption u/s 10B and 10A back to the AO for reevaluation in accordance with the law and after affording the appellant a reasonable opportunity to present their case.
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