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TMI Blog2018 (2) TMI 1993X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee to put forward claims for non taxability of the same. Since in this matter the amount sought to be brought under tax by reassessment proceedings is the same amount which the assessee claims non taxable u/s 10A of the Act, we hold that the assessee cannot be prevented from contending the amount which was originally allowed to be deductible u/s 10B is also deductible u/s 10A of the Act. There is no dispute that the agitation in this matter relates to the item sought to be taxed as escaped income. We, while respectfully following the decision in the case of Sun Engineering [ 1992 (9) TMI 1 - SUPREME COURT ] hold that the assessee has to be permitted to agitate the ground which renders the escaped income as non-taxable. We held that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee u/s 10B of the Act. However, stating that during the course of assessment proceedings for AY 2010-11 in the case of the assessee, it was noticed that the assessee had been claiming deduction u/s 10B of the Act despite the fact that the STPI, Noida from whom the assessee had been taking approval was not competent to accord approval for deduction/exemption u/s 10B of the Act. On that ground learned AO sought to reopen the assessment proceedings for AY 2007-08 by issuing a notice u/s 148 of the Act, in response to which the assessee filed the return of income on 1.5.2014 claiming deduction of ₹ 4,95,31,186/- u/s 10A of the Act with a request to consider the same. However, by way of order dated 30.6.2014, learned AO assessed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act in the original return that was filed u/s 139(1) of the Act well within time was accepted by not choosing the case for scrutiny and allowing it to be processed u/s 143(1) of the Act. However, when the asesssment was sought to be reopened, the learned AO was under legal obligation to issue notice u/s 148 of the Act affording an opportunity to the assessee to file the return of income and for all practical purposes, the return so filed is the return u/s 139(1) of the Act and all other provisions of the Act would be applicable accordingly. He, therefore, submits that when once the claim u/s 10A of the Act was preferred in the return so filed in response to Section 148 of the Act, learned AO has to adjudicate the claim u/s 10A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it. He further submitted that similar are the facts and the direction of the Hon ble jurisdictional High Court in the case of CIT vs Valiant Communications Ltd. ITA 2002/2010 and batch of cases wherein the Hon ble High Court thought it fit that when once the deduction u/s 10B was not accepted, the alternative claim for entitlement u/s 10A of the Act has to be considered. 8. Learned DR, per contra, based his submissions on Section 139(1), 80A(5) and the proviso to sub Section 1A of Section 10A of the Act and submitted that inasmuch as the return of income in response to Section 148 notice dated 31.3.2014 was filed on1.5.2014 i.e beyond the directed period of 30 days is not a valid return to be considered as if filed u/s 139(1) of the Act. Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gued that keeping in view the object and purpose of the proceedings u/s 147 of the Act, which are for the benefit of the revenue and not an assessee, the assessee cannot raise a claim u/s 10A of the Act in the return filed in response to the notice u/s 148 of the Act inasmuch as such a claim was not there in the original return. However, learned AR argued that in the reassessment proceedings for bringing to tax items which had escaped assessment, it is always open to the assessee to put forward claims for deduction of any expenditure in respect of that income or the non taxability of the items at all. He, therefore, submitted that it is open for the assessee to contend that the items sought to be brought to tax by initiating the proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he original assessment proceedings, unless relatable to 'escaped income', and reagitate the concluded matters. Even in cases where the claims of the assessee during the course of reassessment proceedings relating to the escaped assessment are accepted, still the allowance of such claims has to be limited to the extent to which they reduce the income to that originally assessed. The income for purposes of 'reassessment' cannot be reduced beyond the income originally assessed. 11. From the above it is clear that in the reassessment proceeding for bringing to tax items which had escaped assessment, it would be open to an assessee to put forward claims for non taxability of the same. Since in this matter the amount sought to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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