2014 (12) TMI 763 - HC - Income Tax

Application for condonation of delay of 400 days Hyper-technical view taken by Tribunal - Held that - The bifurcation of the exempt income for each unit was clearly stated and given - revenue did not contended that certain aspects were not clear or concealed or eligible profits of each unit could not be ascertained - no such assertion and contention is raised - copy of the form has also not been filed - The view taken by the Revenue is hyper-technical and does not merit issue of notice in the present appeal thus, the notice on the application for condonation of delay in re-filing cannot be issued and the appeal is dismissed Decided against revenue.

Summary

Issues Involved:
Delay in re-filing appeal, Disallowance of claims under section 10B, Requirement of separate reports for each unit under section 10B.

Delay in Re-filing Appeal:
The High Court noted a delay of 400 days in re-filing the present appeal. However, before considering the application for condonation of delay, the court decided to examine the merits of the case. The appeal by the Revenue was related to the Assessment Year 2007-08 and challenged an order passed by the Income Tax Appellate Tribunal (Tribunal) on 16th November, 2012.

Disallowance of Claims under Section 10B:
The assessee company had filed its e-return declaring income and claimed a deduction under section 10B of the Income Tax Act, 1961 for income derived from its export-oriented units. The Assessing Officer disallowed the claims under section 10B citing reasons that were subsequently rejected by the Commissioner of Income Tax (Appeals) and the Tribunal. The Assessing Officer's reasoning regarding the ineligibility of software development and export under Section 10B was refuted based on circulars and amendments. The second ground for disallowance was the failure to submit separate reports for each eligible unit under section 10B, which was also addressed by the Commissioner of Income Tax (Appeals) and the Tribunal.

Requirement of Separate Reports for Each Unit under Section 10B:
Section 10B(5) of the Act mandates the furnishing of a report by an accountant certifying the correct claim of deduction. The Commissioner of Income Tax (Appeals) and the Tribunal found that the Chartered Accountant had appropriately bifurcated and computed the income derived from exports of software for each unit separately, even though only one auditor report was submitted for both units. The court emphasized that the full particulars and details for each unit were adequately provided, and the Revenue's contention was considered hypertechnical and not substantial enough to merit further consideration.

In conclusion, the High Court declined to issue notice on the application for condonation of delay in re-filing the appeal, leading to the dismissal of the appeal itself based on the detailed analysis of the merits of the case and the issues raised regarding the disallowance of claims under section 10B and the requirement of separate reports for each unit under the same section.