TaxTMI 
TaxTMI 
2015 (1) TMI 1010
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....act and in law in not dropping the proceedings u/s. 263 despite the fact that the Appellant had duly explained the issues raised by the CIT and had given full explanation with respect to the issues raised by the CIT. 4. The learned CIT erred in fact and in law in disallowing deduction u/s 10B of Act amounting to Rs. 3,26,27,651/-. 5. The learned CIT erred in fact and in law in rejecting the alternate plea of the Appellant to allow the deduction u/s. 10A of the Act despite the fact that all conditions mentioned in section 1OA has been fulfilled by the Appellant." 2. In this case, an assessment was made u/s.143(3) dated 17.11.2011. The assessee in individual capacity is earning income from data processing. Facts of the case have revealed that the assessee is engaged in the business of export of internet enabled services, mainly for data processing pertaining to medical and pharmaceuticals companies. A return of income was filed at Rs. 10,38,260/-, wherein claimed a deduction of Rs. 3,26,27,651/- u/s.10B of IT Act. The assessment was completed on the same income as declared by the assessee. In the assessment order, the AO has mentioned that the audit report and Form No.56G wa....
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.... by the Director of STPI and not by the Development Commissioner under the Ministry of Commerce and Industries, the deduction u/s. 10B of Rs. 3,26,27,651/- granted by the AO is irregular. Your office has therefore asked us to submit as to why the order passed by the Assessing Officer u/s.143(3) of the Act should not be enhanced or cancelled with a direction to make fresh assessment in accordance with provision of section 263 of the Act. 2. In the above respect we submit that the order passed by the AO is not erroneous and also not prejudicial to the interest of the revenue. The issue under consideration has already been examined by the AO during the course of assessment proceedings. For ready reference the chronology of events in the case of the Assessee is as under: Event Date Regular Assessment U/s. 143(3) Return of Income filed u/s. 13911) on 27.09.2009 Notice u/s. 143(2} issued on 24.03.2010 Regular Assessment completed on 1 7.1 1.2011 3. We most respectfully submit that the case of the assessee was selected for regular scrutiny u/s.143(2) of the Act. During the course of assessment proceedings the assessing officer had calle....
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.....10B of the Act. Such view is also taken in the case of M/s. Secunderabad Software Service Pvt. Ltd. (ITA No.1501/hyd/2011). We therefore submit that there no error on the part of the AO to allow the deduction u/s.10B of the Act. 12. Without prejudice to the above we brought to your kind notice that the assessee has claimed the said deduction u/s.10B of the Act in the return of income. The assessee has got approval as 100% Export Oriented Unit under the SPTI Scheme in respect of its unit. A copy of the approval letter is enclosed as Annexure-2 of the said submission. Since the assessee has got approval as 100% EOU it was of the view that it is entitled to claim the deduction u/s.10B of the Act. Such a view is also taken by Delhi ITAT in the cases of Regency Creation & M/s. Valiant Communication Ltd. wherein it was held that 100% EOU unit registered in STPI can claim deduction u/s.10B of the Act. Such view is also taken by Hyderabad ITAT in the case of M/s. Secunderabad Software Services Pvt. Ltd. (ITA No.1501/hyd/2011). Copy of these decisions is enclosed as Annexure-2A. 13. It is submitted that the deduction u/s.10A and 10B are pari material and deduction u/s.10B applies to ....
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....t held that though the considerations which apply for granting approval u/s. 10A and 10B may to an extent overlap, yet the deliberate segregation of these two benefits by their statute reflects Parliamentary intention that to qualify for the benefit under either, the specific procedure enacted for that purpose is to be followed. There is nothing in any of the circulars or instructions relied in that case by the Tribunal implying that approval for purposes of an STP also entitles the unit to benefit u/s. 10B. Accordingly, it is held that this contention of the assessee is also without any merit. 4.4. In view of the above legal and factual position, the order passed by the Assessing Officer dated 17-11-2012 is hereby set aside. The Assessing Officer is directed to pass a fresh order by disallowing the claim u/s. 10B of the Act. He is also directed to examine the case of the assessee for other years and initiate proceedings for examining the claim after giving assessee an opportunity of being heard in those years." 4. From the side of the appellant, learned AR, Mr. Milin Mehta appeared and informed that in compliance of notice the assessee has furnished the relevant details in r....
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....ith this background, learned AR has submitted before us in a written submission as under: "However, the Appellant has no objection if the order u/s.263 is upheld, if the ITAT considers it appropriate to issue directions to the AO to consider the allowability of deduction u/s.10A of the Act. The AO may please to direct that the claim of the Assessee u/s. 10A be not disallowed merely on the ground that the Assessee had not made claim for the same during the original assessment and the Chartered Accountant's Certificate in Form No.56F was not filed. It is submitted that since the deduction was consistently allowed for the earlier years u/s.10B, there was no reason for the Assessee to make alternate claim for deduction u/s.10A. Further, for claiming deduction u/s.10B, the Assessee had already submitted Chartered Accountant's Certificate in Form No.56G, which is pari materia the same as Form No.56F." 5. On the other hand, from the side of the Revenue, learned CITD. R., Mr. Vimalendu Verma has argued that the question whether the assessee is eligible for claim of exemption u/s.10A or u/s.10B can only be considered during quantum proceedings. As far as the issue before this Tribunal....