Income Tax Officer, Ward -10(1), Hyderabad V. M/s Intrack Inc., Secunderabad

CO 143/HYD/2012

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8235 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 04-01-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 31-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M H NAIK
• Assessee Lawyers: G V V S MURTY
• Keywords: Additional evidence; Revised return
• Section: 143(3); 10B; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO .1343/HYD/12 ASST. YEAR 2009-10 ITO, W-10(1), HYDERABAD. V/S. M/S. INTRACK INC RANIGUNJ CIRCLE, SECUNDERABAD. PAN: AAAF19256J (APPELLANT) (RESPONDENT) C.O.NO.143/HYD/2012 (IN ITA 1343/HYD/2012- A.YR.2009-10) M/S. INTRACK INC RANIGUNJ ITO, W-10(1), CIRCLE, SECUNDERABAD. HYDERABAD PAN: AAAF19256J (APPELLANT) (RESPONDENT) DEPARTMENT BY : SRI M.H. NAIK ASSESSEE BY : SHRI GVVS MURTY DATE OF HEARING 20-12-2012 DATE OF PRONOUNCEMENT 04 -01-2013 . O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER: THE APPEAL FILED BY THE DEPARTMENT AND CROSS OBJ ECTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 15- 6-2012 OF CIT (A)-VI, HYDERABAD PASSED IN APPEAL NO.0250/2011-12/CI T(A)-VI PERTAINING TO THE ASSESSMENT YEAR 2009-10. ITA NO.1343 AND CO 143 OF 2012 M/S INTRACK INCOME., SECBAD. 2 2. THE ONLY GRIEVANCE OF THE REVENUE IN THIS APPEAL IS WITH REGARD TO CIT (A) ALLOWING ASSESSEES CLAIM OF DEDUCTION U/S 10B O F THE ACT. BRIEFLY THE FACTS OF THE ISSUE ARE, THE ASSESSEE CARRYING ON BUSINESS OF SOFTWARE DEVELOPMENT AND EXPORT IS A 100% EXPORTED OR IENTED UNIT (EOU IN SHORT) REGISTERED WITH SOFTWARE TECHNOLOGY P ARK OF INDIA (STPI IN SHORT) MUMBAI. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,31,27,754/- AFTER CLAIMING DEDUCTION U/S 10B OF T HE ACT. THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT U/S 143(3) O F THE ACT, DISALLOWED THE DEDUCTION CLAIMED U/S 10A OF THE ACT BY OBSERVING THAT THE ASSESSEE HAS NOT BEEN APPROVED AS A 100% EOU BY THE BOARD APPOINTED BY THE CENTRAL GOVERNMENT AS PER SECTION 14 OF THE INDUSTRIES (DEVELOPMENT AND REGULATION), ACT 1951. TH E ASSESSING OFFICER FURTHER OBSERVED THAT EVEN THE ASSESSEE CANNOT BE ALLOWED DEDUCTION U/S 10A OF THE ACT AS IT HAS NOT FURNISHED THE AUDITORS CERTIFICATE IN FORM 56F IN TERMS WITH SECTION 10A(5) OF THE ACT READ WITH RULE 16D OF IT RULES EITHER IN THE RETURN FILED ORI GINALLY NOR HAS FILED ANY REVISED RETURN CLAIMING DEDUCTION U/S 10A OR SUBMI TTING THE AUDITORS CERTIFICATE IN FORM NO.56F. 3. THE ASSESSEE BEING AGGRIEVED OF THE ASSESSMENT MADE FILE D AN APPEAL BEFORE THE CIT (A). IN COURSE OF HEARING BEFO RE CIT (A), THE ASSESSEE WHILE ARGUING IN FAVOUR OF DEDUCTION CLAIMED U/S 10B OF THE ACT RELIED UPON A DECISION OF INCOME-TAX APPELLATE TRIB UNAL DELHI BENCH IN THE CASE OF REGENCY CREATIONS LIMITED V/S. ACIT IN ITA NO.1588/DEL/2010 DATED 3-5-2011 AND A DECISION OF IN COME-TAX APPELLATE TRIBUNAL, HYDERABAD BENCH IN THE CASE OF SECU NDERABAD SOFTWARE LIMITED IN ITA NO.1501/HYD/2011 DATED 10-4- 2012 WHEREIN IT IS HELD THAT REGISTRATION WITH STPI WILL ENTITLE A 1 00% EOU FOR ITA NO.1343 AND CO 143 OF 2012 M/S INTRACK INCOME., SECBAD. 3 DEDUCTION U/S 10B OF THE ACT. THE CIT (A) FOLLOWING T HE AFORESAID DECISIONS OF THE TRIBUNAL ALLOWED THE ASSESSEES CLAIM OF DE DUCTION U/S 10B OF THE ACT. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITT ED BEFORE US THAT THE MANDATORY REQUIREMENTS WHICH SHOULD BE FULFI LLED FOR AVAILING DEDUCTION U/S 10B OF THE ACT IS THE ASSESSEE MUST BE APPROVE D AS A 100% EOU BY THE BOARD APPOINTED U/S 14 OF THE INDUSTR IES (DEVELOPMENT AND REGULATION) ACT, 1951. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE REGISTRATION WITH S TPI CANNOT BE A SUBSTITUTE FOR APPROVAL BY THE BOARD AS REQUIRED UNDER THE PROVISIONS OF THE ACT. 5. THE LEARNED AR, AT THE OUTSET, FAIRLY SUBMITTED TH AT THE DECISION OF INCOME-TAX APPELLATE TRIBUNAL, DELHI BENCH IN THE CASE OF REGENCY CREATIONS V/S. ACIT WHICH WAS FOLLOWED BY THE CIT (A) W HILE ALLOWING ASSESSEES CLAIM OF DEDUCTION U/S 10B, IN THE MEANWHILE, HA S BEEN REVERSED BY THE HONBLE DELHI HIGH COURT VIDE ITA NO. 69/2008, 783/2009 AND 1239/2001 DATED 17-9-2012. THE LEARN ED AR HOWEVER SUBMITTED THAT THE ASSESSEE IS OTHERWISE ELIGIBLE FOR DEDU CTION U/S 10A OF THE ACT. IN THIS CONTEXT, THE LEARNED AR SUBMIT TED A CERTIFICATE FROM THE AUDITOR IN FORM 56F ALONG WITH A PETITION FOR A DMITTING IT AS AN ADDITIONAL EVIDENCE. THE LEARNED AR SUBMITTED THAT A S THE CIT (A) WAS INCLINED TO ACCEPT THE ASSESSEES CLAIM OF DEDUCTION U/S 10B OF THE ACT, THERE WAS NO OCCASION ON THE PART OF THE ASSESSEE TO SUBMIT THE FORM NO.56F BEFORE THE CIT (A). 6. WE HAVE HEARD SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL ON RECORD. UNDISPUTEDLY, THE ASSESSEE HAS CLAIMED DEDUCTION U/S 10B OF THE ACT IN THE RETURN OF INCOME FILED FOR THE IMPUGNED ASSESSMENT YEAR ALONG WITH FORM 56G CLAIMING ITSELF TO B E A 100% ITA NO.1343 AND CO 143 OF 2012 M/S INTRACK INCOME., SECBAD. 4 EXPORT ORIENTED UNIT ( EOU IN SHORT). HOWEVER, FACT R EMAINS THAT THE ASSESSEE HAS NOT BEEN APPROVED AS A 100% EOU BY THE BOARD APPOINTED IN THIS BEHALF BY THE CENTRAL GOVERNMENT I N EXERCISE OF POWERS CONFERRED BY SECTION 14 OF THE INDUSTRIES (DEVELOP MENT AND REGULATION) ACT, 1951 AND RULES MADE THERE UNDER. TH E ASSESSEE HAVING NOT FULFILLED THIS PRE-CONDITION AS PROVIDED UN DER EXPLANATION-2 (IV) OF SECTION 10B, IT IS NOT ENTITLED TO AVAIL DEDUC TION U/S 10B OF THE ACT. HOWEVER, SO FAR AS THE ASSESSEES ALTERNATE PLEA OF D EDUCTION U/S 10A OF THE ACT IS CONCERNED, IT IS SEEN THAT NO SUCH APP ROVAL OF THE BOARD IS NECESSARY. THE ONLY REQUIREMENT FOR CLAIMING E XEMPTION U/S 10A OF THE ACT IS THE ASSESSEE IS REQUIRED TO SUBMIT A CER TIFICATE FROM THE AUDITOR IN FORM 56F AS PER SECTION 10A(5) OF TH E IT ACT READ WITH RULE 16D OF INCOME-TAX RULES. THE ASSESSEE HAD INITIALL Y CLAIMED DEDUCTION U/S 10B OF THE ACT WHICH THOUGH WAS DISALLOWE D BY THE ASSESSING OFFICER BUT WAS ALLOWED IN APPEAL BY THE CIT (A ) KEEPING IN VIEW THE DECISIONS OF DIFFERENT BENCHES OF INCOME-TAX A PPELLATE TRIBUNAL INCLUDING THE JURISDICTIONAL BENCH OF INCOME-T AX APPELLATE TRIBUNAL. IN THESE CIRCUMSTANCES, WE ACCEPT THE CONTENTION OF THE ASSESSEE THAT THERE WAS NO OCCASION ON HIS PART TO SUBMIT T HE AUDITORS CERTIFICATE IN FORM 56F BEFORE THE CIT (A). IN FACT, IT IS SEEN FROM RECORD THAT THE ASSESSEE HAS ALSO URGED A SPECIFIC GROUND BEFORE THE CIT (A) CLAIMING DEDUCTION U/S 10A OF THE ACT AND IN THE CROSS OBJECTION THE ASSESSEE HAS CHALLENGED NON-CONSIDERATION OF SUCH GROU ND BY THE CIT (A). IT IS FURTHER WORTH MENTIONING HERE THAT THE ASSESSING OFFICER HIMSELF IN THE ASSESSMENT ORDER HAS OBSERVED THAT THE ASSESSEE IS IN THE BUSINESS OF SOFTWARE DEVELOPMENT AND ENTITLED TO CL AIM DEDUCTION U/S 10A OF THE INCOME-TAX ACT. HOWEVER, THE ASSESSING OFFICE R DID NOT ALLOW DEDUCTION U/S 10A AS THE ASSESSEE HAS NOT SUBMITTED THE AUDITORS CERTIFICATE IN FORM NO.56F AS REQUIRED FOR CL AIMING DEDUCTION ITA NO.1343 AND CO 143 OF 2012 M/S INTRACK INCOME., SECBAD. 5 U/S 10A OF THE ACT. CONSIDERING THE TOTALITY OF FACTS AND THE CIRCUMSTANCES OF THE CASE, AND KEEPING IN VIEW THE INTEREST S OF JUSTICE, WE ARE INCLINED TO ADMIT FORM 56F SUBMITTED BEFORE US AS ADDITIONAL EVIDENCE AND REMIT THE MATTER BACK TO THE ASSESSING OFFICE R FOR TAKING A DECISION ON THE ASSESSEES CLAIM OF DEDUCTION U/S 10A OF T HE ACT IN ACCORDANCE WITH LAW AND AFTER GIVING A REASONABLE OPPOR TUNITY OF BEING HEARD TO THE ASSESSEE. 7. IN SO FAR AS CROSS OBJECTION FILED BY THE ASSESSEE IS CONCER NED WHICH RELATES TO NON CONSIDERATION OF THE GROUND RAISE D BY THE ASSESSEE WITH REGARD TO THE CLAIM OF DEDUCTION U/S 10A OF THE ACT BY THE CIT (A), IN VIEW OF OUR DECISION IN ITA NO.1343/HY D/2012, THE SAME IS RENDERED REDUNDANT AND DISMISSED AS SUCH. 8. IN THE RESULT, THE DEPARTMENTS APPEAL IS TREATED A S ALLOWED FOR STATISTICAL PURPOSE AND THE ASSESSEES CROSS OBJECTION IS DISMISSE D BEING REDUNDANT. ORDER PRONOUNCED IN THE COURT ON 04-01-2013. SD/- SD/- (CHANDRA POOJARI) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DT/- 4 TH JANUARY, 2013. COPY FORWARDED TO: 1. ITO, WARD-10(1), HYDERABAD. 2. 3. 4. M/S INTRACK INCOME., D.NO. 2-3-21/2, 1 ST FLOOR, RANIGUNJ CIRCLE, SECUNDERABAD. COMMISSIONER OF INCOME-TAX (APPEALS)-VI, HYDERABAD. CIT CONCERNED, HYDERABAD. 5 DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. JMR * ITA NO.1343 AND CO 143 OF 2012 M/S INTRACK INCOME., SECBAD. 6