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2018 (2) TMI 1993 - AT - Income TaxDeduction/exemption u/s 10B - Reopening of assessment - AO opined that for want of approval of the authority u/s 14 of the IDR Act and not that of the STPI authority, allowing deduction/exemption u/s 10B of the Act was bad and for such purpose he issued notice u/s 148 - claim of the allowability of deduction u/s 10A with respect to the STPI unit - HELD THAT - In the reassessment proceeding for bringing to tax items which had escaped assessment, it would be open to an assessee to put forward claims for non taxability of the same. Since in this matter the amount sought to be brought under tax by reassessment proceedings is the same amount which the assessee claims non taxable u/s 10A of the Act, we hold that the assessee cannot be prevented from contending the amount which was originally allowed to be deductible u/s 10B is also deductible u/s 10A of the Act. There is no dispute that the agitation in this matter relates to the item sought to be taxed as escaped income. We, while respectfully following the decision in the case of Sun Engineering 1992 (9) TMI 1 - SUPREME COURT hold that the assessee has to be permitted to agitate the ground which renders the escaped income as non-taxable. We held that it is open to the assessee to put forth claim for non taxability of the escaped income in view of Section 10A of the Act, while respectfully following the decision of Hon ble jurisdictional High Court in Regency Creations Ltd. 2012 (9) TMI 627 - DELHI HIGH COURT and Valiant Communications Ltd 2013 (1) TMI 1006 - DELHI HIGH COURT we deem it just and proper to direct the learned AO to examine the claim of the assessee for deduction u/s 10A of the Act by affording an opportunity to the assessee. Appeal of the assessee is allowed for statistical purpose
Issues involved:
- Reopening of assessment proceedings for AY 2007-08 due to deduction claim under section 10B of the Income-tax Act, 1961. - Disallowance of deduction under section 10B and claim under section 10A by the Assessing Officer. - Appeal before the Commissioner of Income-tax (Appeals) challenging the disallowance. - Argument regarding the validity of the claim under section 10A in response to notice u/s 148 of the Act. - Interpretation of relevant legal provisions and case laws related to deduction claims under section 10A and 10B. - Consideration of the claim for deduction under section 10A based on the decisions of the jurisdictional High Court. Detailed Analysis: 1. The case involved the reopening of assessment proceedings for AY 2007-08 due to the disallowance of a deduction claimed under section 10B of the Income-tax Act, 1961. The Assessing Officer (AO) sought to reopen the assessment as the approval for the deduction was not from the competent authority. The assessee then filed a return claiming a deduction under section 10A instead. 2. The Commissioner of Income-tax (Appeals) observed that reassessment proceedings are meant to benefit the revenue by taxing any income that escaped taxation earlier. The Commissioner disallowed the claim under section 10A made by the assessee in response to the notice u/s 148 of the Act. 3. The assessee appealed the decision, arguing that the claim under section 10A should be considered as it was filed in response to the notice u/s 148. The argument was supported by legal provisions and case laws indicating that the AO should adjudicate the claim under section 10A if filed in response to a notice u/s 148. 4. The Assessing Officer, on the other hand, contended that the claim under section 10A was invalid as it was filed beyond the specified period and did not comply with certain provisions of the Act. The AO emphasized the importance of the original return and the limitations on claims made in response to a notice u/s 148. 5. The Tribunal analyzed the contentions of both parties and referred to the decision in CIT vs. Sun Engineering Works P. Ltd., emphasizing that reassessment proceedings are for the benefit of the revenue. However, it was noted that the assessee can raise claims for non-taxability of items in reassessment related to the escaped income. 6. Further, the Tribunal considered the decisions of the jurisdictional High Court in similar cases, where it was held that the AO must consider the claim under section 10A if properly made by the assessee. The Tribunal decided to direct the AO to examine the claim for deduction under section 10A, following the precedents set by the High Court. 7. Ultimately, the Tribunal allowed the appeal for statistical purposes and dismissed the stay petition as infructuous, setting aside the matter for the AO to reconsider the claim under section 10A.
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