2012 (6) TMI 803 - AT - Income Tax

Deduction u/s 10B - Held that - CIT(A) has erred in granting deduction u/s. 10B without due approval from the competent authority. Accordingly, we remit back the issue to the file of the Assessing Officer in similar lines to examine the issue in the light of the above.

Summary

Issues Involved:
- Allowance of appeal despite non-compliance with statutory obligations
- Confirmation of addition/disallowance under section 10B
- Application of decision in a specific case

Analysis:
1. Allowance of appeal despite non-compliance with statutory obligations:
The Revenue appealed against the order of the CIT(A) granting the appeal of the assessee despite non-compliance with statutory obligations. The Assessing Officer disallowed the claim made by the assessee as it failed to submit the necessary approval of the Board and ratification by the Development Commissioner as required for the deduction under section 10B. The learned DR argued that the assessee must be duly approved by the Board appointed by the Central Government to grant deduction under section 10B. The Tribunal found that the CIT(A) erred in granting the deduction without the required approval and remitted the issue back to the Assessing Officer for re-examination.

2. Confirmation of addition/disallowance under section 10B:
The assessee company claimed a deduction under section 10B for the amount of Rs. 43,22,403 based on its business activities. However, the Assessing Officer disallowed the claim as the necessary approval from the Board and ratification by the Development Commissioner were not submitted. The Tribunal emphasized the importance of complying with statutory requirements for claiming deductions under section 10B, highlighting the need for approval by the competent authority.

3. Application of decision in a specific case:
The Revenue contended that the CIT(A) erred in applying a decision in a specific case to the present situation. The Tribunal referred to a previous case where it was held that the conditions for deductions under sections 10A and 10B are distinct. The Tribunal directed the Assessing Officer to re-examine the issue in light of the previous decision and determine whether the assessee is entitled to deduction under section 10A or not. This re-examination was deemed necessary to ensure fairness and compliance with the law.

In conclusion, the ITAT Hyderabad partially allowed the Revenue's appeal for statistical purposes, emphasizing the importance of complying with statutory obligations for claiming deductions under section 10B. The judgment highlighted the need for proper approval from the competent authority and the significance of examining each case based on its specific circumstances to ensure fair treatment and adherence to legal provisions.