9911796707
TMI Blog2011 (4) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant Salil Aggarwal, Adv. for the Respondent ORDER C.L. Sethi:- 1. The revenue is in appeal against the order dated 01.11.2010 passed by the learned Commissioner of Income-tax (Appeals), pertaining to the Assessment Year 2005-06. 2. The grounds raised by the revenue are as under:- "1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in directing the Assessing Officer to allow deduction under section 10A of the I.T. Act, 1961. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in directing the Assessing Officer to examine the issue in the light of the directions of the Hon'ble ITAT for the earlier years, ignoring that, the powers of the Ld. CIT(A) to set aside issues decided in scrutiny assessment have been curtailed with effect form 1.6.2001." 3. The assessee is a company incorporated under the Companies Act, 1956. It is engaged in the business of development and export of computer software. The assessee company commenced its business by setting up unit in Noida which is registered with Software Technology Park of India (STPI). The approval from STPI authorities was granted vide letter d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The reference to sub-section 7 of section 10A of the Income-tax Act, 1961 here, was actually to sub-section 8 of section 10A of the Income-tax Act. As per section 10A(8) of the Income-tax Act, 1961 once the assessee has opted not to claim the benefit of exemption, the provision of this section shall not apply to him for the any subsequent assessment years. It may also be noted that provision of sub-section 8 of section 10A of the Income-tax Act applies to the "assessee" and not to any particular undertaking or unit. As such exemption u/s 10A is not allowable to the assessee. In view of the option exercised by the assessee, the deduction claimed u/s 10A of the Income-tax Act, 1961 is hereby allowed." 5. The assessee filed written submissions before the CIT(A), which has been reproduced in Para 4 of the CIT(A)'s order. 6. After considering the AO's order and assessee's submissions, and in the light of appellate orders of first appellate authority passed in earlier years, and the order of the Tribunal passed in earlier years, the CIT(A decided the issue in favour of the assessee by observing and holding as under:- "5. I have gone through the assessment order, appellate or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that in the orders of the authorities below the primary discussion has been the applicability of sub-section (8) of section 10A. Other aspects as to whether the requisites of sub-section 10(A) have been complied with or not, have not been gone through. Respectfully following the precedent from the aforesaid Tribunal's decision and also the Jurisdictional High Court decision, we remit the issue to the files of the AO with the directions to allow exemption u/s 10A in all the assessment years in this regard, if the assessee is found to be satisfying all other requisites envisaged in the scheme of section 10A of the Act In case the exemption u/s. 10A cannot be allowed for the reasons of not satisfying the requisites the claim of deduction u/s 80HHE shall be allowed after providing opportunity to meet the requisites. Needless to add assessee shall be granted adequate opportunity of being heard." 6.5 Facts and the issue being the same, the AO is hereby directed to examine the issue in the light of the directions of the Hon'ble ITAT for the earlier years as stated above, for this impugned assessment year also. Accordingly, Ground Nos.2 to 7 are allowed in principle as indicated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court of Delhi in CWT vs. Meatless (P) Ltd. (1984) 43 CTR (Del) 281 : (1985) 156 ITR 569 (Del) and also by Gujarat High Court in Anant Mills Ltd. vs. CIT (1993) 109 CTR (Guj) 231 : (1994) 206 ITR 582 (Guj) and Bombay High Court in Kantilal Chimanlal Shah vs. CIT (1954) 26 ITR 303 (Bom)." 6.5 In the aforesaid case the Tribunal after evaluating the facts and circumstances of the case had restored the matter to the files of the AO to allow exemption u/s. 10A, if the assessee is found to have satisfied requisites envisaged in section 10A of the Act. In case the exemption u/s 10A was not allowed for the reasons by not satisfying the requisites the claim u/s 80HHE was to be allowed, after providing opportunity to meet the requisites. This decision of the Tribunal was the subject matter of the adjudication by the Hon'ble Jurisdictional High Court in the case of 203 CTR 101. The order of the Court is as under:- The Tribunal has recorded a finding of fact that the respondent-assessee was not an old unit already in existence so as to be disentitled to the benefit of exemption under s. 10 A of the IT Act, 1961. It has, on that finding, remitted the matter back to the AO with the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of getting exemption u/s 10A are fulfilled in these assessment years. However we find that in the orders of the authorities below the primary discussion has been the applicability of sub-section (8) of section 10A. Other aspects as to whether the requisites of sub-section 10(A) have been complied with or not, have not been gone through. Respectfully following the precedent from the aforesaid Tribunal's decision and also the Jurisdictional High Court decision, we remit the issue to the files of the AO with the directions to allow exemption u/s 10A in all the assessment years in this regard, if the assessee is found to be satisfying all other requisites envisaged in the scheme of section 10A of the Act In case the exemption u/s. 10A cannot be allowed for the reasons of not satisfying the requisites the claim of deduction u/s 80HHE shall be allowed after providing opportunity to meet the requisites. Needless to add assessee shall be granted adequate opportunity of being heard." 11. The aforesaid order of the Tribunal was appealed against by the revenue before the Hon'ble High Court of Delhi at New Delhi vide ITA Nos. 2003, 2004, 2025 and 2027 of 2010, and the Hon'ble High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 2000-01 and perusal thereof show that a specific note was appended by the assessee stating as under:- "1. The assessee company is registered as a 100% Export Oriented Unit (EOU) for manufacture and export of computer software for export purposes. The assessee being eligible for 100% tax holiday u/s 10A of the Income Tax Act, 1961, has exercised this option not to claim this exemption for this year in accordance with provision of sub Section 7 to Section 10A of the Act." It is thus clear from the above that it cannot be said that the assessee had opted not to take the benefit of Section 10A of the Act. On the contrary, it was specifically mentioned that the assessee was eligible for 100% tax holidays period under Section 10A of the Act but in the year in question since there were losses, the assessee was not claiming the exemption in that particular year. Moreover, as pointed out above, when the assessee has been given this benefit in some of the years of the same tax holiday period, there is no reason to deny the assessee benefit in these three assessment years. We, thus, are of the opinion that no question of law in this behalf in the instant case." 12. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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