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2019 (5) TMI 1388 - AT - Income TaxDeduction u/s 10A - deduction was set off against the brought forward losses - AO was of the opinion that the brought forward losses should be set off before claiming deduction u/s 10A while computing income of the assessee - HELD THAT - A perusal of the order of the CIT(A) shows that he has simply extracted the order of the Tribunal in TECNOVATE ESOLUTION PRIVATE LTD. 2015 (9) TMI 120 - ITAT DELHI and dismissed the appeal of the assessee. Since the decision, which was the basis for the dismissal of the appeal by the CIT(A) has been reversed by the Hon ble High Court of Delhi 2015 (12) TMI 1184 - DELHI HIGH COURT . We are of the considered view that in the interest of justice, the CIT(A) should now decide the appeal of the assessee afresh after giving a reasonable opportunity of being heard to the assessee. The appeal is restored to the file of the CIT(A) accordingly. - Assessee's appeal treated as allowed for statistical purpose.
Issues:
1. Rectification of assessment order under section 154/143(3) of the Income-tax Act, 1961. 2. Claiming deduction u/s 10A before setting off brought forward losses. 3. Validity of the order passed by the Ld. CIT(A) upholding the order of the Ld. AO. 4. Setting off brought forward losses with the profit of the undertaking under section 10A(6) of the Act. Analysis: Issue 1: Rectification of assessment order under section 154/143(3) of the Income-tax Act, 1961 The appeal was against the order of the CIT(A) dated 08.09.2016 regarding the assessment year 2008-09. The Assessing Officer rectified the assessment order under section 154 of the Act, setting off brought forward losses before claiming deduction u/s 10A. The assessee challenged this rectification, leading to the appeal. Issue 2: Claiming deduction u/s 10A before setting off brought forward losses The Counsel for the assessee argued that claiming deduction u/s 10A before setting off brought forward losses is a debatable issue and cannot be considered a mistake apparent from the record. The CIT(A) upheld the order of the AO without considering this argument. The Tribunal noted that a similar decision relied upon by the CIT(A) had been reversed by the Hon'ble High Court of Delhi, requiring the CIT(A) to reconsider the appeal after giving the assessee a reasonable opportunity to be heard. Issue 3: Validity of the order passed by the Ld. CIT(A) upholding the order of the Ld. AO The Tribunal found that the CIT(A) had erred in upholding the order of the AO without considering the debatable nature of the issue regarding deduction u/s 10A before setting off brought forward losses. The Tribunal, in the interest of justice, directed the CIT(A) to reconsider the appeal in light of the reversal of the decision relied upon by the CIT(A). Issue 4: Setting off brought forward losses with the profit of the undertaking under section 10A(6) of the Act The Tribunal highlighted that the AO and CIT(A) had erred in setting off brought forward losses with the profit of the undertaking without appreciating the changes in provisions of section 10A(6) brought about by the Finance Act, 2003. The Tribunal's decision to restore the appeal to the file of the CIT(A) for a fresh consideration acknowledged the need for a proper assessment of the set-off of losses with the profit of the undertaking under section 10A(6) of the Act. In conclusion, the Tribunal allowed the appeal for statistical purposes and directed the CIT(A) to reexamine the case in light of the issues raised by the assessee, ensuring a fair opportunity for the assessee to present their case.
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