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TMI Blog2019 (3) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2013 for the Assessment Year 2010-11. 2. The only effective issue involved in this appeal is as to whether the ld CITA was justified in upholding the disallowance of deduction claimed u/s 10B of the Act in the facts and circumstances of the case. 3. The brief facts of this case are that the assessee has two main verticles in its business. One vertical comprises development of software and other vertical comprises of running a call centre, income from which has been claimed as exempt u/s 10B of the Act. The assessee was registered under the Software Technology Park (STP in short) scheme as 100% Export Oriented Unit (EOU in short) on 28.1.2005. The same was subsequently renewed on 27.7.2010. The green card was issued to the assessee by the designated officer for Secretary to the Government of India, Department of Information Technology and Chairman Inter Ministerial Standing Committee on Software Technology Park Scheme. The assessee does not have any approval from the Board of Approval for EOU Scheme. The claim of deduction u/s 10B of the Act was disallowed by the ld AO. 4. The entire debate and argument of the A.O. who has disallowed the benefit u/s 10B and the assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for units approved by the Director STPI after 31/03/1999. Thanks and regards 6. The assessee stated that based on the above email, it is clear that the ratification by the Board of Approval is not required by STPI units. It was further argued that since all the Commissioner of STPI are members of Combined Board of Approval and therefore, approval granted by a Commissioner of concerned STPI should be construed as approval of Board of Approval as well. The second argument offered by the assessee gives simplistic interpretation that few constituents of the Board constitute the entire Board. 7. The revenue pointed out that the above cited Instruciton of the Board dated 8.5.2009 was much more subsequent to the year 1999, the delegation of which has been made the basis of the opinion of the Deputy Director, STPI has been considered by the Board., as it mentions - Subsequent to the delegation of this power by the Ministry of Commerce and Industries Accordingly, the ld AO observed that it could be concluded that in order to avail the exemption of income u/s 10B of the Act, the assessee must fulfill the two conditions mentioned above i.e. it should be approved b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nter-ministerial standing Committee on software technology park scheme vide green card number STPK/233/06 dated 16th Feb., 2006 as an unit approved under the STP scheme of the Govt. of India as 100% export oriented unit to carry out IT enabled services (call centre). It would be pertinent to reproduce the same herein below:- Sl No. 6047 Green Card No.STPK/233/06 Dated the February 16th 2006 SOFTWARE TECHNOLOGY PARK(STP) UNIT HAS BEEN APPROVED UNDER THE STP SCHEME OF THE GOVT. OF INDIA AS A 100% EXPORT ORIENTED UNIT FOR COMPUTER SOFTWARE. THIS UNIT IS ENTITLED TO TOP PRIORITY TREATMENT FROM ALL CONCERNED CENTRAL AND STATE GOVERNMENT DEPARTMENTS AND OTHER ORGANISATIONS IN ALL MATTERS RELATING TO THE PROJECT TAXPUNDIT.ORG Sd/- DESIGNATED OFFICER FOR SECRETARY TO THE GOVT OF INDIA DEPARTMENT OF INFORMATION TECHNOLOGY AND CHAIRMAN, INTERMINISTERIAL STANDING COMMITTEE ON SOFTWARE TECHNOLOGY PARK SCHEME. 11.1 The above green card approval has to be understood in its true and fullest sense in the larger interest and purpose behind setting up a unit and the allied benefits it is likely to bring. These export benefits w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereby eligible for deduction for 100% export oriented unit contemplated u/s. 10A/10B of the Act. 14. We also find from page 51 of the paper book containing a letter dt. 02-09-2011 addressed to the assessee by Software Technology Parks of India (STPI), Ministry of Communication Information Technology, Dept of IT, Govt. of India, Kolkata regarding registration for setting up STP unit ( 100% Export Oriented Unit under STP scheme). The same is reproduced here in below for the sake of convenience:- Software Technology Parks of India Ministry of Communication Information Technology, Dept of IT, Govt. of India Plot No.5/1 DP Sector-V, Salt Lake, Kolkata-700 091 Ph: 91-33-2367- 3598/99-2367 3798/99, Fax 91-33- 2367-3597 Email:[email protected]/URLhttp://www.kol.stp.in To The Director Wizard Enterprises Pvt. Ltd. 5, Lake Avenue, Kolkata - 700026 SUB: YOUR STP UNIT APPROVAL RATIFICATION REG. REF: Your letter dt: 29.08.2011 Sir, With reference to above and discussions with your officials, the facts w.r.t, your STP unit registration is produced below: 1. Your unit 'Wizard Enterprises Pvt. Ltd.' is registered as a 100% Export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oard appointed by the Central Govt. in exercise of power conferred by section 14 of Industrial (Development Regulation) Act 1951 Rules made under that Act. It was ultimately held in that case as under:- 39. The Ld. DR for the Revenue before us has failed to point out any contrary evidence to the same. The Ld. counsel for the assessee drew our attention to the gazetted notification in this regard placed at page 16 of the paper book-II under which the powers had been given to consider the application for setting up of units under STP Scheme operated vide custom notification No. 138 and 140 dated 22.10.1991. The said committee was also empowered to consider the proposals for industrial license, foreign technical collaboration, agreement and import of .capital goods. The assessee has furnished the Registration under the Software Technology Park Scheme of India vide approval No. STPIM/PCMG/PSE/02/199-7492 dated 17.2.2003 registering the assessee as an 100% EOU. The copy of the said certificate is enclosed at pages 105 to 109 of the paper book alongwith the copy of the agreement entered into by the assessee company with STPI on 17.2.2003, a copy of which is enclosed at page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions for making such claim are satisfied. He relied upon the circular issued by the CBDT dated 11.04.1955 wherein it was observed that it is the duty of the AO to guide the assessee with regard to eligibility to claim deduction; in the instant case when the assessee claimed deduction under section 10 B the AO ought to have guided the assessee with regard to eligibility to claim deduction under section 10A of the Act. 18. We also find that the contents of audit report in form no. 56F and 56G together with the computation mechanism remains the same for claiming the deduction u/s. 10A/10B of the Act. It was argued alternatively by the ld.AR that the decision of the ld.AO is to educate the assessee of its rights and entitlements as per law and cannot take advantage of ignorance of assessee. In this regard, he cited the relevant extract of the decision of the Hon ble Bombay High Court in the case of Sanchi Software Solutions Pvt. Ltd Vs. CIT reported in (2012) 349 ITR 404 (Bom), wherein it was held as under:- Income-tax Department cannot take advantage of the assessee s mistakes in not claiming the exemption in the Income-tax Return and not deny him exemption. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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