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TMI Blog2021 (1) TMI 1041X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 10A - Since, the issue with regard to eligibility of the assessee for deduction under Section 10A of the Act for Assessment Year 2008-09 beyond a period of 10 consecutive years was not subject matter of order of assessment itself. Therefore, the same could not have been the subject matter of the appeal before the CIT (Appeals) and thus, in the fact situation of the case there was no bar in invoking the powers under Section 263 - The income of the assessee from staffing, which was not an income from export of computer software was also allowed by the Assessing Officer without any application of mind and without any enquiry. Therefore, the Commissioner of Income Tax has rightly invoked the powers under Section 263 - Decided against assessee. - I.T.A. NO. 353 OF 2014 - - - Dated:- 7-1-2021 - THE HON BLE MR. JUSTICE ALOK ARADHE AND THE HON BLE MR. JUSTICE NATARAJ RANGASWAMY APPELLANT: MR. CHYTHANYA K.K. ADV. RESPONDENTS: MR. K.V. ARAVIND, ADV. JUDGMENT This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the assessee. The subject matter of the appeal pertains to the Assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 009 which was renewed subsequently upto 05.09.2014. For the Assessment Year 2008-09, the assessee filed the return of income on 25.10.2008, by which total income was declared as NIL after claiming exemption of ₹ 16,20,65,750/- under Section 10A of the Act 3. The case of the assessee was selected for scrutiny and a notice under Section 143(2) and Section 142 of the Act was issued to the assessee. The assessee responded to the aforesaid notices by filing replies and by furnishing documents. The Assessing Officer by an order dated 24.12.2010 inter alia held that assessee is entitled to deduction under Section 10A of the Act and quantified the amount claimed as deduction under Section 10A of the Act. 4. The assessee thereupon filed an appeal before Commissioner of Income Tax (Appeals) who by an order dated 02.11.2011 partly allowed the appeal preferred by the assessee. The Assessing Officer by an order dated 07.01.2012 gave effect to the order passed by the Commissioner of Income Tax (Appeals). The revenue filed an appeal before the Income Tax Appellate Tribunal (hereinafter referred to as the tribunal for short) against order dated 02.11.2011. However, the tribunal dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer has taken one of the plausible views. Therefore, the tribunal ought to have appreciated that the Commissioner of Income Tax committed an error of law in invoking the powers under Section 263 of the Act in the fact situation of the case. It is further submitted that human resource services would qualify for deduction under Section 10A of the Act and the aforesaid view was taken by the tribunal was taken by the division bench of Delhi High Court vide decision dated 03.09.2014 passed in I.T.A.No.1255/2011, which was followed by this court in COMMISSIONER OF INCOME TAX AND ANR. MS. NTT DATE GLOBAL ADVISORY SERVICES PVT. LTD. IN ITA NO.544/2013 decided on 12.11.2020. It is further submitted that in view of Section 10A(8) of the Act, which begins with a non obstante clause. It was permissible for the assessee to opt out of the provisions of Section 10A of the Act and therefore, the assessee did not opt for the benefit of the provisions for the Assessment Year 1995-96, 1996-97, 1997-98, 2002-03. 2004-05 and therefore, period or ten years expired in the year 2010-11. 7. It is further submitted that the Assessing Officer was not required to pass a detailed order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 and the same expired in 2002-03. In view of the amendment to Section 10A of the Act by Finance Act, 2000 with effect from 01.04.2001, the assessee was permitted to claim benefit of Section 10A of the Act for the unexpired period. It is urged that even as per amended provisions, the period of 10 consecutive year has to commence with Assessment Year relevant to Previous Year in which undertaking begins to manufacture or produce such articles, things or computer software. Thus, the period of 10 consecutive years would start from 1995-96 and would end with Assessment Year 2004-05. 9. It is also contended that incentive provision have been provided only for a particular period and the benefit cannot be extended beyond the outer limit of 10 consecutive Assessment Years commencing from first year of production i.e., Assessment Year 1995-96. It is also urged that eligibility of assessment for deduction under Section 10A of the Act for the Assessment Year 2008-09 beyond a period of 10 consecutive years was not subject matter of the order of assessment and therefore, the same could not be subject matter of the appeal before the Commissioner of Income Tax (Appeals) and therefore, there w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat twin conditions are required to be satisfied for exercise of revisional jurisdiction under Section 263 of the Act firstly, the order of the Assessing Officer is erroneous and secondly, that it is prejudicial to the interest of the revenue on account of error in the order of assessment. 12. The aforesaid provision was considered by the Supreme Court in MALABAR INDUSTRIAL COMPANY VS. CIT , 243 ITR 83 and it was held that the phrase prejudicial to the interests of the revenue has to be read in conjunction with an erroneous order passed by the Assessing Officer and every loss of revenue as a consequence of the order of the Assessing Officer cannot be treated as prejudicial to the interest of revenue. It was further held that where two views are possible and the Income Tax Officer has taken one view with which the Commissioner does not agree, the order passed by the Assessing Officer cannot be treated as erroneous order prejudicial to the interest of the revenue. The principles laid down in the aforesaid decision were reiterated by the Supreme Court in CIT VS. MAX INDIA LTD., 295 ITR 282 (SC) and recently in ULTRATECH CEMENT LTD. AND ORS. VS. STATE OF RAJASTHAN AN ..... X X X X Extracts X X X X X X X X Extracts X X X X
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