2016 (2) TMI 733 - AT - Income Tax

Entitlement to claim u/s 10A - Held that - The first appellate authority proceeded to consider the allegations of the AO and held that the AO has not specified which of the stipulated and necessary conditions of section 10A of the Act has not been met or complied with by the assessee. Regarding the non-preparation or non-filing of the Sales Tax Form, it was held by the ld. CIT(A) that this was procedural issue between the STPI UNIT and STP office and does not impinge upon the allowance of exemption u/s 10A, in case the conditions thereof are satisfied. We are in agreement with the ld. DR that the ld. CIT(A) has erred in holding that the assessee company has fulfilled all the conditions stipulated in Form No. 10A of the Act and the first appellate authority further erred in not taking into consideration the detailed facts and deficiencies recorded by the AO in the assessment order. Per contra, as we have observed hereinabove, the ld. CIT(A) rightly followed the principal of consistency and properly and correctly following the directions of the Tribunal, the first appellate authority properly considered and adjudicated the issue and after taking into consideration the conditions precedent for grant of exemption u/s 10A of the Act held that the assessee is entitled to exemption u/s10A of the Act. We are unable to see any valid reason to interfere with the impugned order and thus we uphold the conclusion of the first appellate authority. - Decided in favour of assessee

Summary

Issues involved:
- Appeal against CIT(A)'s order allowing the assessee's claim u/s 10A of the Income-tax Act, 1961.

Analysis:
1. The appeal was filed by the Revenue against the CIT(A)'s order allowing the assessee's claim u/s 10A of the Act for A.Y 2008-09.
2. The Tribunal had earlier directed the issue to be reconsidered by the CIT(A) to determine if the assessee was entitled to exemption u/s 10A. The CIT(A) allowed the exemption based on various observations and conclusions.
3. The CIT(A) noted that the appellant fulfilled all the necessary conditions specified in sec 10A, including commencement of activities, registration with STPI, export proceeds, and compliance with reporting requirements.
4. The Tribunal agreed with the CIT(A)'s decision, emphasizing that the citation of the wrong section did not affect the claim as deduction u/s 10A was correctly claimed. The principle of consistency in granting the exemption was also upheld.
5. The Tribunal found no valid reason to interfere with the CIT(A)'s order, as it correctly considered the conditions precedent for the exemption and addressed the deficiencies raised by the AO.
6. Ultimately, the Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision to allow the assessee's claim for exemption u/s 10A of the Act.

This detailed analysis highlights the procedural history, legal arguments, and conclusions leading to the dismissal of the Revenue's appeal against the CIT(A)'s order regarding the assessee's claim under section 10A of the Income-tax Act, 1961.