2021 (11) TMI 639 - HC - Income Tax

Deduction u/s 10A - whether the appellant assessee could make a claim for deduction other than by filing a revised return? - HELD THAT - We are of the view that acceptance of the case of assessee u/s 10 A by the CIT(Appeals), without there being a revised return is illegal and untenable. The expression of the Standing Counsel in the judgment GOETZE (INDIA) LIMITED VERSUS COMMISSIONER OF INCOME-TAX 2006 (3) TMI 75 - SUPREME COURT is clear to the point that without a revised return by the Assessee the claims cannot be modified. Hence ground interference against the order under appeal is made out. The questions of law are answered in favour of Revenue and against the Assessee.

Summary

Issues:
1. Appeal against order disallowing deduction under Section 10B and allowing deduction under Section 10A.
2. Entertaining alternative plea at the appellate stage without a revised return.
3. Compliance with conditions for deduction under Section 10A.

Analysis:

Issue 1: Appeal against order disallowing deduction under Section 10B and allowing deduction under Section 10A
The Principal Commissioner of Income Tax filed an appeal challenging the order disallowing the deduction under Section 10B for the Assessment Year 2011-12. The Appellate Authority allowed the Assessee's alternative claim for deduction under Section 10A, citing eligibility based on previous assessments. The Tribunal upheld the CIT(Appeals) decision, emphasizing the duty of the revenue to consider alternative deductions when one is denied. Various judgments were referenced to support the decision, leading to the conclusion that the Assessee was entitled to deduction under Section 10A, and the appeal by the Revenue was dismissed.

Issue 2: Entertaining alternative plea at the appellate stage without a revised return
The Revenue argued that the CIT(Appeals) erred in law by allowing the alternative plea for deduction under Section 10A without a revised return. The standing counsel cited a Supreme Court judgment emphasizing the necessity of a revised return for modifying claims. The court held that without a revised return, the CIT(Appeals) should not have directed consideration of the Assessee's claim under Section 10A, leading to the appeal being allowed in favor of the Revenue.

Issue 3: Compliance with conditions for deduction under Section 10A
The Tribunal found that the Assessee met the conditions for deduction under Section 10A, as verified by the CIT(Appeals). The Assessing Officer's objection based on the claim not being made in the original return was overruled, emphasizing the duty to grant legally available deductions to the Assessee. The Tribunal confirmed the CIT(Appeals) decision, stating that the Assessee's eligibility for deduction under Section 10A was justified based on the provided documentation and compliance with relevant regulations.

In conclusion, the judgment addressed the issues of disallowing deduction under Section 10B, allowing deduction under Section 10A, entertaining alternative pleas without a revised return, and compliance with conditions for deduction under Section 10A. The decision favored the Assessee's eligibility for deduction under Section 10A but highlighted the necessity of a revised return for modifying claims, ultimately ruling in favor of the Revenue.