TaxTMI 
TaxTMI 
2011 (4) TMI 621
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....see is a company incorporated under the Companies Act, 1956. It is engaged in the business of development and export of computer software. The assessee company commenced its business by setting up unit in Noida which is registered with Software Technology Park of India (STPI). The approval from STPI authorities was granted vide letter dated December 9, 1998. Further, the assessee started a new STPI unit in Bangalore under the permission granted by STPI vide letter dated November 6, 2002. 4. The assessee's claim of deduction under sec. 10A was denied by the Assessing Officer. The reasons given by the AO in denying deduction under sec. 10A have been reproduced by the CIT(A) in his order in Para 3, as under:- "As per certificate in Form 56F enclosed with the return the assessee has claimed exemption u/s 10A of the Income-tax, 1961 as per the following details:- Noida Bangalore Total Amount Deduction u/s 10A (as per certificate in form 56F) 62,894,332 41,537,554 104,431,886 According to the clause 7 of the certificate, commencement of manufacture/production in Noida and Bangalore unit was started in December 1999 and January 2003, r....
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.... order and assessee's submissions, and in the light of appellate orders of first appellate authority passed in earlier years, and the order of the Tribunal passed in earlier years, the CIT(A decided the issue in favour of the assessee by observing and holding as under:- "5. I have gone through the assessment order, appellate orders of CIT(A) for earlier years, order of Hon'ble ITAT and the detailed written submissions filed by the AR in this regard. 6.1 During the AY under consideration, the business activities were being carried out by the Appellant from the undertakings situated at Noida and Bangalore. Both the units were set up in accordance with the Software Technology Park ('STP') Scheme notified by the Government of India in the Ministry of Commerce and Industry. 6.2 For the impugned assessment year, the assessee filed its return of income on 31.10.2005 declaring a total income of Rs.1,60,00,991/- after claiming deduction under section 10A if Rs.10,44,31,886/-. 6.3 The AO has disallowed the deduction claimed u/s 10A in the impugned assessment year in respect of both the units (Noida Unit and Bangalore unit) on the ground that the appell....
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....less to add assessee shall be granted adequate opportunity of being heard." 6.5 Facts and the issue being the same, the AO is hereby directed to examine the issue in the light of the directions of the Hon'ble ITAT for the earlier years as stated above, for this impugned assessment year also. Accordingly, Ground Nos.2 to 7 are allowed in principle as indicated above." 7. Hence, the department is in appeal before us. 8. We have heard both the parties and have carefully gone through the orders of the authorities below. 9. In the course of hearing, both the parties have admitted the fact that the issue is covered by the decision of the Tribunal dated 31.03.2010 pertaining to the Assessment Years 2001-02, 2003-04 and 2004-05. However, the learned DR submitted that the Tribunal's observations to the effect that if exemption under sec.10A cannot be allowed for the reasons of not satisfying the requisite, the claim of deduction under sec. 80HHE shall be allowed after providing opportunity for meeting the requisites shall not be applied in the present Assessment Year inasmuch as provisions of sec. 80HHE are not in force in the Assessment Yea....
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....ibunal was the subject matter of the adjudication by the Hon'ble Jurisdictional High Court in the case of 203 CTR 101. The order of the Court is as under:- The Tribunal has recorded a finding of fact that the respondent-assessee was not an old unit already in existence so as to be disentitled to the benefit of exemption under s. 10 A of the IT Act, 1961. It has, on that finding, remitted the matter back to the AO with the following directions:- "We, therefore, set aside the orders of the authorities below on this point and restore the matter back to the file of the AO with a direction to allow exemption under s. 10A in both the years in case the assessee is found to have satisfied all other requisites envisaged in the scheme of s. 10 A of the Act. In case the exemption under s.10A cannot be allowed for the reasons of not satisfying the requisites, the claim of deduction under s. 80HHE shall be allowed after providing opportunity to meet the requisites." The above direction is, in our view, just and proper hence does not call for any interference especially when the question (whether the assessee) satisfies the prerequisites stipulated for the purpose o....
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..../s. 10A cannot be allowed for the reasons of not satisfying the requisites the claim of deduction u/s 80HHE shall be allowed after providing opportunity to meet the requisites. Needless to add assessee shall be granted adequate opportunity of being heard." 11. The aforesaid order of the Tribunal was appealed against by the revenue before the Hon'ble High Court of Delhi at New Delhi vide ITA Nos. 2003, 2004, 2025 and 2027 of 2010, and the Hon'ble High Court vide order dated January 27, 2011 has confirmed the Tribunal's order and the appeals filed by the revenue were dismissed, by observing and holding as under:- "In three appeals, one common issue which is raised and pertains to the assessment year, 2001-02, 2003-04 and 2004-05 is as follows:- "Whether the ITAT was correct in law while concluding that the deduction under section 10A would be allowable to the assessee in the subsequent years even though the assessee had exercised its option under Section 10A(7) for the non applicability of the provisions of Section 10A?" The assessee on the premise that it is in the business of development and export of computer software and human resources ser....