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TMI Blog2022 (4) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmit the documents in respect of the deduction and exemptions claimed and also to give a brief note as to why deduction/exemption claimed be accepted by the Department. Assessee in response to the said notice/ questionnaire replied and filed the details of exemption claimed u/s 10A. The Assessee also filed a letter of permission issued by Software Technologies Parks of India, whereby the Assessee s unit was declared as hundred percent export oriented unit and permission was granted under the STP scheme for the development of computer software and IT enabled service. Assessee claimed that the Assessing Officer thoroughly considered the claim of the Assessee by perusing the details and documents submitted and note on justification of the deductions claimed u/s 10A of the Act and hence the order passed u/s 163 is liable to be set aside. Regarding the claim of the revenue that, no deduction is allowable u/s 92C(4) of the Act, we have perused the proviso again, wherefrom it is clear that no deduction 10A of the Act shall be allowed in respect of the amount of income by which the total income of the Assessee enhances after computation of income under this sub-section. The Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utation was revised by the Assessing Officer by giving the benefit of deduction claimed u/s 10A of the Act and assesssing the taxable income of the Assessee to the tune of ₹ 1,55,95,440/- . 2.2 Subsequently, the case of the Assesseewas opened by the Ld. PCITu/s 263 of the Act by issuing show cause notice on following grounds: (i) The assessment in the above mentioned case was completed in 15.05.2015 determining an income of ₹ 17,09,38,850/- under normal provisions against Nil returned income and at ₹ 18,21,24,104/- under special provisions of the Income Tax Act, 1961 (hereinafter referred to as the Act ). (ii) On perusal of the assessment records, it is noticed that the income in the subject case was assessed at ₹ 17,09,38,850 after making additions of ₹ 15,94,27,269/- on account of transfer pricing and ₹ 1,15,11,583/- on account of marked to market losses under section 143(3) of the Act. It is also noticed that you had claimed deduction u/s 10A amounting to ₹ 31,74,80,850/- in computation of income but restricted to ₹ 16,21,37,440 to the extent of total taxable profit of the company. Thereafter the balance claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforementioned orders under section 143(3) and 154 passed by the Assessing Officer are erroneous in so far as they are prejudicial to the interest of the revenue, you are hereby requested to show cause why an order should not be passed enhancing or modifying the assessment as per the provisions of section 263 of the Act. 3. The Assessee replied the said notice. Though the Ld. PCIT consideredthe reply of the Assessee, however, formed a view that various issues remained unverified, including the issues mentioned in the show cause notice and thus no proper inquiry was conducted by the Assessing Officer in the instant year on the above issues and, therefore, the impugned order held to be erroneous and prejudicial to the interests of the Revenue and consequently set aside the same. 4. The Assessee being aggrieved preferred the instant appeal. 5. Heard the parties and perused the material available on record. In this case return of income filed by the Assessee on dated 30.11.2011 by declaring nil income, which was processed u/s 143(1) of the Act and later on came into scrutiny and resulted into passing of assessment order dated 15.05.2015 u/s 143(3) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e orders passed by the Assessing Officer on allowing of deduction of ₹ 15,94,27,269/- claimed u/s 10A of the Act by the Assessee and therefore we have to see as to whether the Assessing Officer examined the issue under consideration by making inquiries and/or verifying the factual position. 7.2 From the soft paper book page 18 column no. 35 and Annexure A (page no. 33 of the paper book ) it clearly reflects that the Assessee had claimed the amount of ₹ 31,74,80,850/- as deduction u/s 10A of the Act and also given details of the same . The said deduction was inquired by the Assessing Officer by issuing a questionnaire/notice U/s 142(1) of the Act on 24.10.2014 (pg. 142 PB), whereby in para no. 6 of the said notice, the Assessee was asked to submit the documents in respect of the deduction and exemptions claimed and also to give a brief note as to why deduction/exemption claimed be accepted by the Department. 7.3 The Assessee in response to the said notice/ questionnaire replied vide letter dated 30.12.2014 (refer page 138 of the PB) and filed the details of exemption claimed u/s 10A. The Assessee also filed a letter of permission dated 29.09.2006 issued b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g its own wisdomand the said view is not contrary to the provisions of law and therefore the orders passed by the AO cannot be attributable as erroneous and prejudicial to the interests of Revenue as per the provisions of Section 263 of the Act. 9.1 Even otherwise, it is not the case of the Revenue Department that the Assessing Officer has not done any inquiry and failed to verify the deduction as claimed by the Assessee, and therefore observation of the Ld. PCIT in para no. 6 of the impugned order, to the effects Thus it is clear that no proper inquiry was conducted by the assessing officer in the instant year on the above issues. Therefore, the impugned assessment order was erroneous and prejudicial to the interests of revenue as per the provisions of Section 263 of the IT Act, 1961 , is un-sustainable. 10. Coming to the claim of the Ld. DR that no deduction is allowable u/s 92C(4) of the Act, we have perused the proviso again, wherefrom it is clear that no deduction 10A of the Act shall be allowed in respect of the amount of income by which the total income of the Assessee enhances after computation of income under this sub-section. The Assessee had claimed that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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