2018 (7) TMI 1899 - HC - Income Tax

Disallowance of exemption u/s. 10B - assessee has not submitted the approval letter for its 100% Export Oriented Undertaking from the Board appointed in this behalf by the Central Government in exercise of powers conferred by Section 14 of the Industries (Development and Regulations) Act, 1951 and the Rules made under that Act - HELD THAT - CIT(A) allowed the said claim on the ground that in fact, the export oriented undergoing certificate was given by the appropriate authority which was on record. The same has been confirmed by the learned ITAT by impugned order by relying upon decision of Division Bench of this Court in the case of PCIT Tax-3, Ahmedabad Vs. Zealous Web Technologies (2016 (4) TMI 255 - GUJARAT HIGH COURT), by which it is specifically observed and held that once the assessee is having the certificate issued by the competent authority, in that case, non-production of the approval letter by the Board cannot be a ground to deny the benefit under Section 10B of the Act. Applying the said decision to the facts of the case on hand, it cannot be said that the learned Tribunal has committed any error. On the contrary, the question is squarely covered against the Revenue.

Summary

Issues:
1. Disallowance of exemption u/s. 10B of the Income Tax Act for Assessment Year 2008-09.

Analysis:
The High Court judgment pertains to a Tax Appeal challenging the disallowance of exemption under Section 10B of the Income Tax Act for the Assessment Year 2008-09. The Assessing Officer initially denied the exemption claimed by the assessee company due to the absence of an approval letter for its 100% Export Oriented Undertaking from the relevant "Board" appointed by the Central Government. However, the CIT (Appeals) later allowed the claim, noting that the export-oriented undertaking certificate was on record. The ITAT upheld this decision, citing a previous Division Bench ruling in a similar case. The Division Bench had held that possessing a certificate from the competent authority is sufficient, and the non-production of the approval letter by the Board does not warrant denial of benefits under Section 10B. The High Court concurred with this interpretation, stating that the Tribunal did not err in its decision. It concluded that no substantial question of law arose, and therefore, the appeal was dismissed.

In conclusion, the judgment clarifies the criteria for claiming exemption under Section 10B of the Income Tax Act, emphasizing the importance of possessing a certificate from the competent authority for export-oriented undertakings. The ruling underscores that the absence of an approval letter from the Board does not invalidate the claim if the necessary certificate is in place. This case serves as a precedent for similar disputes involving the interpretation and application of tax laws related to export-oriented businesses.