TaxTMI 
TaxTMI 
TaxTMI 
2017 (1) TMI 1336
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....olation of Rule 46A of the Income Tax Rules thereby partly allowing its Section 10B deduction claim of Rs. 80,69,579/- on proportionate basis w.e.f. from the date of its STPI registration from 18.02.2009; respectively. The assessee's cross objection on the other hand plead that the lower appellate authority ought to have held it entitled for the above deduction claim in entirety. 3. We advert to relevant facts now. The assessee company is in knowledge process outsourcing business. It filed return on 29.09.2009 stating income of Rs. 76,06,815/- followed by its revised return dated 22.03.2011 declaring nil income. It claimed Section 10B deduction to the tune of Rs. 80,69,579/- of the Act. The Assessing Officer sought for necessary details for the said purpose. The assessee's Authorized Representative appears to have submitted on its behalf on 14.12.2011 that the assessee had not been accorded an STPI unit certification so as to fulfill the above deduction's necessary conditions. The Assessing Officer thus framed the regular assessment in question dated 15.12.2011 making the impugned disallowance of Section 10B deduction. He further initiated Section 271(1)(c) penalty proceedings aga....
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....ection 10 B of the Act. During the course of scrutiny the AR of the appellant informed the AO that it was not registered with STPI, which was mandatory for claiming the deduction. Accordingly the AO disallowed the deduction claimed by the appellant. The appellant later on discovered that it was registered with STPI with effect from 18/02/2009. It accordingly filed an appeal bringing the correct facts on record and reiterated the claim of deduction under section 10 B. The written submission given by the appellant was forwarded to the AO and his comments have also been obtained. It has been submitted by the AO that since this information was not furnished earlier it should not, be admitted now. He has further submitted that even if the claim of the appellant under section 10 B is admitted the deduction should be given only from the date from which it has been registered with STPI. I have carefully considered the submission given by the appellant regarding the new evidence and also the report of the AO. It is noted that the certificate was there with the appellant since February 2009 but due to ignorance of the Chartered Accountant during the course of assessment proceedings it co....
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....rt at that time. The appellant has submitted that since the returns are now being e-filed the requirement of furnishing the report with the return has been waived by Rule 12. It has also relied upon certain judgements which deal with similar Issues of furnishing the report along with the return for claiming the deduction. On consideration of totality of the circumstances and the issue involved it is noted that the appellant has otherwise fulfilled ail the requirements of allowance of claim under section 10 B. The only disqualification for making the claim is the non furnishing of form 56G with the return. The report of the chartered accountant form 56G, that has been given by the appellant during the course of appellate proceedings, is apparently obtained after the1 due date of filing of return as it does not contain the date on which the report was issued. On examining the judicial opinion about the issue, especially the decisions that have been mentioned by the appellant, if is noted that the requirement of filing the report is a procedural one and not mandatory. In case the appellant does not file it with the return of income it can be filed later. In some of the cases the court....
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....year, the loss was absorbed in that immediate preceding year only. As a result of which, the income of the year under consideration was assessed at positive figure. Therefore, during the course of assessment proceedings only, the assessee claimed deduction u/s 80HHC. The assessee did not file Audit Report u/s 80HHC in Form No.10CCAC alongwith the ROI nor created any export reserve. Thereafter, the assessee filed revised return of income claiming deduction u/s 80HHC and furnishing audit report in Form No.10CCAC. However, the assessing officer denied the claim on two grounds vis-a-vis (a) revised return is time barred and (b) since the assessee had not furnished audit report in Form No. 10CCAC alonwith return of income, deduction u/s 80HHC cannot be allowed. The Hon'ble Tribunal, after following the decisions of various high court including the Gujarat High Court decision in the case of Gujarat Oil & Allied Industries and Calcutta High Court in the case of Hardeodas Agarwalla Trust held that the requirement of furnishing of audit report alongwith the return of income cannot be regarded as mandatory requirement and the furnishing of audit report before the authority is sufficient ....
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.... from the date from which the appellant company was registered with STPI Authority. The AO is directed accordingly. This leaves both the parties aggrieved to the extent indicated in their respective pleadings. The Revenue's case seeks to challenge the lower appellate order condoning delay, admitting additional evidence on assessee's pretext thereby holding it partly entitled for the impugned deduction claimed. The assessee's cross objection however pleads that the CIT(A) ought to have granted it entire deduction relief then that in part hereinabove. 6. We have heard both the parties. Case file perused. Shri Kurian strongly reiterates Revenue's pleadings on first two technical aspect on condonation of delay of 134 days in assessee's filing of lower appeal as well as admission of additional evidence. We have already indicated that the assessee's case seeking condonation of delay of 134 days in filing of its appeal was that it could not supply the relevant record alongwith assessment order's copy to its Authorized Representative due to over sight and inadvertence. There is no material before us to dispute all these solemn averments. Be that as it may, the assessee has sufficiently ....
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....ertification i.e. 18.02.2009 instead of the entire relevant previous year. We accordingly find no reason to interfere in well reasoned CIT(A)'s order under challenge in Revenue's appeal and assessee's cross objection ITA No.1188 & C.O. No.228/Ahd/2014. The same are accordingly declined. 9. This leaves us with Revenues latter appeal ITA No.1189/Ahd/2014 seeking to revive Section 271(1)(c) penalty of Rs. 24,93,500/- as imposed by the Assessing Officer vide order dated 22.06.2012 qua the above quantum disallowance of Section 10B deduction as dealt with in preceding paragraph. The Assessing Officer levied the impugned penalty by terming assessee's deduction claim to be a false one lacking bonafides. He heavily relied upon quantum developments to impose the penalty in question. 10. The CIT(A) reverses Assessing Officer's action as under: "The remaining grounds of appeal are interlinked and are in respect of levy of penalty of Rs. 24,93,500/- under section 271(1)(c) of the Act. The issue is decided in the subsequent paragraphs. The facts, which are relevant for decision, are that the appellant is engaged in the business of Knowledge Process Outsourcing, It filed a return claiming th....
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....llant had also furnished all the relevant certificates regarding receipt of export proceeds during the course of assessment proceedings. The conditions for claim of deduction under section 10 B have also been satisfied. It has also produced a certificate showing that the approval was rectified by the interministerial committee also. Therefore, the claim under section 10 B made by the appellant in the return of income was bond fide. The only issue which requires further consideration, is that the appellant made a claim of deduction in respect of the income of the total year, whereas it was accorded registration during the month- of -February, Therefore, if should have made a claim of 10B in respect of the income for two months only. The appellant has submitted that it was under bona fide belief that the deduction is available for the entire year as the registration was granted during the year. It is noted from the language of section 10B that the deduction is available to 100% export-oriented undertaking from the export of articles or things or computer software for a period of 10 consecutive assessment years beginning with the assessment year relevant to the previous year in whic....