2015 (2) TMI 668 - HC - Income Tax

Exemption under section 10B - revenue challenged the tribunal order allowing the claim of exemption ignoring that the assessee does not admittedly have approval as 100 per cent. export oriented undertaking - Held that - Revenue is right in contending that the learned Tribunal could not have rewritten the law nor could have accepted anything in lieu of what was required by the statute. Therefore, the view taken by the learned Tribunal that the assessee could get the advantage even without the requisite approval is altogether bad, therefore, set aside. - Decided in favour of revenue.

Summary

Issues:
Challenge to judgment allowing exemption under section 10B of the Income-tax Act, 1961.

Analysis:
The appeal challenged a judgment granting exemption under section 10B of the Income-tax Act, 1961, based on the assessee's claim as a hundred per cent export-oriented undertaking. The Revenue contended that the assessee lacked approval as a hundred per cent export-oriented undertaking by the Board appointed by the Central Government. The notification reconstituting the Board for granting approval was highlighted, emphasizing the specific requirements for approval. The assessee's reliance on a letter from the General Manager, District Industries Centre, stating the lack of authority to issue certificates for deduction under section 10B was crucial in establishing the absence of requisite approval.

The Revenue argued that the Tribunal's decision amounted to rewriting the law, asserting that the Tribunal lacked the authority to grant benefits without the necessary approval. The Tribunal's view was deemed incorrect, leading to the order being set aside. The assessee's advocate made two submissions: first, asserting the assessee's status as a hundred per cent export-oriented undertaking, and second, requesting a remand to the Assessing Officer for consideration of other benefits under the Income-tax Act. The Court rejected the first submission, agreeing with the Revenue that the Tribunal could not deviate from statutory requirements. However, the second submission was accepted, leading to the orders being set aside and remanded for further assessment.

Ultimately, the Court refrained from expressing any opinion on whether the assessee was a hundred per cent export-oriented undertaking, leaving all questions open for future consideration. The judgment highlighted the importance of strict adherence to statutory requirements and the necessity for proper approval in claiming benefits under the Income-tax Act.