2015 (10) TMI 1501 - AT - Income Tax

Entitlement to relief under section 10B or alternatively under section 10A - CIT(A) held that assessee was not entitled to claim relief under section 10A only on the technical ground that the claim had been made under section 10B in the return of income for the assessment year under consideration and not under section 10A in respect of its profit derived from its 100% EOU from export of computer software registered with STPI - Held that - The Hon ble Delhi High Court in the case of CIT Vs. Regency Creations Pvt.Ltd. (2012 (9) TMI 627 - DELHI HIGH COURT ) held that in order to claim exemption under section 10B, an undertaking must have been approved by the Board appointed in this behalf by the Central Government in exercise of powers conferred by section 14 of the Industries (Development & Regulation) Act, 1951 and rules made thereunder. In this case, assessee is a unit recognized by the STPI. It was not placed on record to suggest that unit was approved by the Board appointed by the Central Government under section 14 of Industries (Development and Regulation) Act, 1951, therefore assessee is not eligible for 10B deduction. However, if the assessee is not entitled for deduction under section 10B, the claim made by the assessee under section 10A of the Act should be considered by the lower authorities. Thus we set aside the orders of lower authorities and remit the matter back to the file of Assessing Officer with a direction to consider the claim of the assessee under section 10A after examining the allowability of the claim afresh in accordance with law and in light of the above observations. - Decided in favour of assessee for statistical purposes.

Summary

Issues:
Claim of relief under section 10B or alternatively under section 10A of the Income Tax Act.

Analysis:
The appellant challenged the denial of the claim for relief under section 10B or alternatively under section 10A of the Income Tax Act for the assessment year 2011-12. The main issue was the appellant's contention that the Commissioner of Income Tax (Appeals) erred in denying the claim of relief under section 10A based on a technicality that the claim was made under section 10B in the return of income, not under section 10A. The appellant had a 100% Export Oriented Unit (EOU) registered with STPI and claimed deduction under section 10B initially but later claimed deduction under section 10A for the same assessment year. The Assessing Officer denied the claim under section 10B citing a Delhi High Court decision and the Commissioner of Income Tax (Appeals) upheld this decision.

The Authorized Representative for the appellant argued that the appellant had been consistently claiming deduction under section 10B in previous years and mistakenly mentioned section 10B instead of 10A in the return for the assessment year in question. The representative contended that the appellant met all conditions for deduction under section 10A and should be entitled to it. The representative cited relevant case laws to support the argument, emphasizing that if the appellant was not eligible for deduction under section 10B, the claim under section 10A should have been considered.

The Departmental Representative supported the lower authorities' decision to deny exemption under sections 10A/10B. After considering the submissions and case laws, the Tribunal noted that the appellant filed Form 56F claiming deduction under section 10A, although the return mentioned section 10B. The Tribunal observed that the appellant's unit was approved for setting up by the Director of Software Technology Park of India, a 100% EOU. Referring to legal precedents, the Tribunal highlighted that the appellant was not eligible for deduction under section 10B but should be considered for relief under section 10A.

Citing a decision of the Delhi High Court and the Madras High Court, the Tribunal concluded that the appellant, being a software technology park, was entitled to claim relief under section 10A. Following the legal precedent, the Tribunal set aside the lower authorities' orders and directed the Assessing Officer to re-examine the appellant's claim under section 10A in accordance with the law. Consequently, the appeal of the appellant was allowed for statistical purposes, and the matter was remitted back to the Assessing Officer for fresh consideration.