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TMI Blog2018 (3) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... vernment was also examined by the assessing officer. The A.O. has conducted enquiries with the Director, Software Technology Parks of India, VSEZ, Duvvada, Visakhapatnam who has clarified vide letter dated 5.12.2012 that once the Director, STPI approves the unit, no further ratification of approval from the inter-ministerial standing committee is required and the income tax benefits should not be denied on the ground that the approval of units have been granted by the Director of STPI. Hence, it is evident from the assessment order passed u/s 143(3) r.w.s. 147/143(3) that the A.O. has examined the issue of requirement of approval from the Board also. - Decided in favour of assessee. - I.T.A. No. 373& 374/Vizag/2016 - - - Dated:- 28-2-2018 - Shri V. Durga Rao, Judicial Member And Shri D. S. Sunder Singh, Accountant Member Appellant by : Shri G. V. N. Hari, AR Respondent by : Shri Deba Kumar Sonowal, DR ORDER Per D. S. Sunder Singh, Accountant Member These appeals filed by the assessee are directed against order of the Commissioner of Income Tax-1 (CIT), Visakhapatnam vide F.No.CIT- 1/VSP/263/11/2014-15 dated 30.3.2016 for the assessment years 2008- 09 2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e financial injury to the assessee and accordingly requested for condonation of delay and admit the appeal of the assessee. 3. On the other hand, the Ld. D.R. argued that there was a delay of 453 days in this case, which is a long delay which required to be explained. The assessee has not explained the delay satisfactorily; hence, opposed the condonation of delay. 4. We have heard both the parties, perused the materials available on record and gone through the evidence placed before us. In this case, the fact that the assessee was not residing in Visakhapatnam and residing at Mumbai was not disputed by the revenue. Similarly, the Ld. A.R. explained that the assessee was under the bonafide belief that the appeal was filed since the papers were sent to the Accountant after duly signed by the Managing Partner and due to frequent travel to abroad and overstayal, the assessee could not follow up with the authorized representative with regard to the status of filing of appeal. The Ld. A.R. also argued that there is substantial merit in the case of the assessee and non condonation of delay would cause financial injury and injustice to the assessee. Therefore, in the interest of just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of the above approvals and agreements the assessee firm is not entitled for exemption U/s lOB. Therefore, the assessee is asked to produce the information and also called upon as to why the exemption claimed U/s 10B should not be withdrawn. In response thereto the assessee furnished a detailed reply as under: a) Approval from Board: it was mentioned in your letter that the assessee should obtain statutory approval from the Board appointed by Government of India. You have also mentioned the case of MIs Infotech enterprises LTD Vs CIT. But however the Income tax Appellate Tribunal, Hyderabad, in the case Secunderabad Software Vs. CIT, has held that, having been registered with STPI, is entitled for deduction under Section 10B of the Income Tax Act. It has specifically mentioned that STPI registration is sufficient to claim deduction under Section 108 of the IT Act. We herewith enclosed the copy of the said case for your reference. We also herewith enclosed another Tribunal case Smt, K.Sudha Rani Vs. Department of Income tax (ITA No. 412\HYD\2012). b) Computer Software: it was mentioned in your letter that deduction U/s. lOB is available only to an undertaking which f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est Practices (i) Data Migration as required. He explained that some of the above services cover under Data Processing and some of the services cover under Remote maintenance of CBDT Notification No. 11521 dated 26-9-2000. A letter was addressed to the Director, Software Technology Parks of India, VSEZ, Duvvada, Visakhapatnam to provide copy of approval or ratification of LOP by 'Board of Approval on 16-11-2012. The Software Technology Parks of India vide its letter dated 5-122012 furnished a copy of letter No.1(1)/06-IPHW dated 7-9-2006 by the Additional Director, Department of IT to the Director, Ministry of Finance, Department of Revenue, CBDT, North Block, New Delhi stating that no further ratification of approvals issued by the Directors of Software Technology Parks of India is required from the Inter Ministerial Standing Committee(IMSC). It is clarified that tax benefits shall not be denied by Incometax Department to STP units only on the ground that the approval to units have been granted by the Directors of Software Technology Parks of India. 7. After verification of the information furnished by the assessee and after considering the clarificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d allowed the deduction. Similarly, the issue with regard to the approval from the Board constituted by Central Government was also examined by the assessing officer. The A.O. has conducted enquiries with the Director, Software Technology Parks of India, VSEZ, Duvvada, Visakhapatnam who has clarified vide letter dated 5.12.2012 that once the Director, STPI approves the unit, no further ratification of approval from the inter-ministerial standing committee is required and the income tax benefits should not be denied on the ground that the approval of units have been granted by the Director of STPI. Hence, it is evident from the assessment order passed u/s 143(3) r.w.s. 147/143(3) of the Act that the A.O. has examined the issue of requirement of approval from the Board also. 10. Hon ble ITAT, Hyderabad A Bench in ITA No.412/Hyd/2010 dated 17.9.2010 in the case of K. Sudharani has examined the issue with regard to the requirement of approval by the Board appointed by the Central Government in exercise of powers u/s 14 of the Industries (Development Regularisation Act, 1951) and the Rules made thereunder, which prescribed under the Income Tax Act for the purpose of claiming dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order to promote exports of computer software/IT enabled services and therefore the same ought to be construed liberally. The Supreme Court In the case of Bajaj Tempo Ltd. Vs. CIT (196 ITR 188) had held as under: A provision In taxing statute granting incentives for promoting growth and development should be construed liberally, the restriction on it too has to be construed so as to advance objective of the provision and not to frustrate it'. There is no dispute that the assessee in the instant case has obtained approval from STP Hyderabad as 100% EOU. The first appellate authority held that the assessee as not eligible for relief u/s lOB only on the ground that the 100% EOU under STP scheme cannot be equated with the 100% EOU approved by the Board. Since in our considered opinion the approval of 100% EOU by the Board and STP Is one and the same, assessee is eligible for exemption u/s 10B of the Act. We accordingly, set aside the impugned order of the CIT(A), and direct the assessing officer to allow the assessee's claim for exemption u/s 10B of the Act, allowing the grounds of the assessee in this behalf. 11. The revenue went on appeal before the Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X
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