2021 (8) TMI 260

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....xport Oriented Unit (EOU) under the Software Technology Park Scheme of India (STPI), is engaged in the business of providing engineering and design services to its group companies and is eligible for deduction under Section 10A of the Income Tax Act. 4. The petitioner filed its return of income for the assessment year 2009-2010 on 30.09.2009. Notice under Section 143(2) of the Income Tax Act, was initiated for scrutiny procedures on 30.09.2010. A reference was made under Section 92CA of the Income Tax Act, to the Transfer Pricing Officer (TPO) for determining arm's length price on 19.05.2011. The Transfer Pricing Officer passed an order on 09.01.2013. Considering all the materials available on record, the Assessing Officer passed final assessment order on 28.02.2013. 5. A notice under Section 148 of the Income Tax Act, was issued for reopening of the assessment year 2009-2010. The petitioner confirmed the return of income already filed in response to the notice. Thereafter, the reasons for reopening was furnished to the Assessee in proceedings dated 21.04.2016. The petitioner submitted its detailed objections vide letter dated 17.05.2016 and the said objections were rejected ....

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....ntions raised on behalf of the petitioner by stating that the petitioner has not fully and truly disclosed the informations as required under the provisions of the Income Tax Act. Under Section 10A of the Income Tax Act, the Company must be in any one of the declared Special Economic Zone. 12. However, even in the details relating to the claim by the exporter for deduction Section 10A of the Income Tax Act, i.e., Form No.56-F, the Assessee has not stated about their location of functioning and the said Form categorically indicates that the Assessee must mention the location and address of undertaking in the Form enclosed by the petitioner itself. In page No.33 of the typed set of papers filed along with the present writ petition, the petitioner-Company has mentioned the address alone and the location has not been stated and this apart, the respondents have stated that the petitioner-Company is not functioning in any one of the Special Economic Zone and therefore, they are not entitled for the benefit of Section 10A of the Income Tax Act. 13. The learned Standing Counsel, appearing on behalf of the respondents, contended that even in such cases, it is for the Assessee to submit al....

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....ark; (c) commencing on or after the 1st day of April, 2001 in any special economic zone; (ii) it is not formed by the splitting up, or the reconstruction, of a business already in existence : Provided that this condition shall not apply in respect of any undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertakings as is referred to in section 33B, in the circumstances and within the period specified in that section; (iii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose. Explanation.-The provisions of Explanation 1 and Explanation 2 to sub-section (2) of section 80- I shall apply for the purposes of clause (iii) of this sub-section as they apply for the purposes of clause (ii) of that sub-section". 17. Sub-section (2) begins by contemplating that the said Section would apply to any undertaking which fulfils all the conditions stipulated in sub-section (2) to sub-clause (i). Sub-clause (i)(a) to (c). Sub-clause (i) (a) to sub-section (2) unambiguously enumerates that it has begun or begins to manufacture or produce articles or thin....

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.... is also not contemplated. Therefore, sub-clause (i)(c) must be interpreted that commencement of manufacture on or after the first day of April, 2001 must be in any Special Economic Zone. 21. Beyond the scope of interpretation, yet another aspect is to be considered with reference to these three clauses. Sub-section (2) of Section 10A of the Income Tax Act, unambiguously stipulates that this section applies to any undertaking which fulfils all the following conditions. Therefore, all the three three conditions stipulated in sub-section (2) of Section 10A of the Act, is to be fulfilled. 22. As far as sub-clauses (i)(a), (i)(b) and (i)(c) to sub-section (2) are concerned, it is to be understood that different spells are contemplated in order to determine the eligibility. The three spells indicate that commencement of manufacture from 01.04.1981, which would impliedly end on 31.03.1994 and commencement of manufacture on or after 01.04.1994 and impliedly ends on 31.03.2001. Thereafter, sub-clause (i)(c) states that the manufacture commencing on or after 01.04.2001. 23. This apart, all three sub-clauses (a), (b) and (c) contemplate different Zones. If a case is falling under sub-cla....