Prumatech Infosystems Pvt Limited, CHENNAI V. DCIT, CHENNAI

ITA 1030/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8337 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 19-07-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 18-04-2016
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: S PATTABIRAMAN
• Keywords: Rule of consistency; Tax effect
• Section: 143(3); 142(1); 115JB; 10B; 263

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU R L REDDY , JUDICIAL MEMBER ./ I T.A. NO. 1 0 30 /MDS/201 6 / ASSESSMENT YEAR :20 11 - 1 2 PRUMATECH INFOSYSTEMS PVT. LTD., NO. 18, LADY MADHAVAN ROAD, MAHALINGAPURAM, NUNGAMBAKKAM, CHENNAI 600 034. [PAN:A A C CM6405C ] VS. THE DEPUTY COMMISS IONER OF INCOME TAX , COMPANY CIRCLE V(2) , CHENNAI. ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI S. PATTABIRAMAN, C.A. / RESPONDENT BY : SHRI S UPRIYO PAL, JCIT / D ATE OF HEARING : 1 9 . 0 7 .201 6 / DATE OF P RONOUNCEMENT : 07. 1 0 .201 6 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A PPEALS) 3 , CHENNAI , DATED 18 . 0 2 .20 1 6 RELEVANT TO THE ASSESSMENT YEAR 20 11 - 1 2 . THE MAIN ISSUED RAISED IN THE APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF CLAIM OF DEDUCTION OF .4,21,648/ - MADE UNDER SECTION 1 0B O F THE INCOME TAX ACT, 1961 [ ACT IN SHORT]. I.T.A. NO . 1 0 30 /M/ 16 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF INFORMATION TECHNOLOGY AND INFORMATION TECHNOLOGY ENABLED SERVICES. THE ASSESSEE HAS FILED ITS RETURN OF INCOME ON 30.11.2011 ADMI TTING A TOTAL INCOME OF .6,61,970/ - AND THE BOOK PROFIT UNDER SECTION 115JB OF THE ACT WAS .14,09,991/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND IN ORDER TO EXAMINE THE CLAIM OF EXEMPTIONS UNDER SECTION 10B OF THE ACT, A NOTICE UNDER SECTI ON 143(2) OF THE ACT WAS ISSUED ON 03.08.2012. THEREAFTER, A NOTICE UNDER SECTION 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE WAS ISSUED ON 06.11.2013. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND BY FOLLOWING THE DECISION IN THE CASE OF CIT V. REG ENCY CREATION LTD. 353 ITR 326 (DEL), THE ASSESSING OFFICE R COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT BY DETERMINING THE INCOME OF THE ASSESSEE AT .13,57,110/ - AFTER MAKING VARIOUS ADDITIONS. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). WITH REGARD TO DENIAL OF DEDUCTION CLAIMED UNDER SECTION 10B OF THE ACT, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND BY RELYING ON THE DECISION IN THE CASE OF CIT V. LIVE CONNECTION SOFTWARE SOLUTION PVT. LTD. [NO CITATION WAS MENTIONED BY THE LD. CIT(A)], CONFIRMED THE DISALLOWAN CE MADE BY THE ASSESSING OFFICER. 4. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. BY FILING COPY OF THE COMMUNICATION FROM STPI GRANTING PERMISSION AS 100% I.T.A. NO . 1 0 30 /M/ 16 3 EOU, THE LD. COUNSEL FOR THE ASSESSEE HAS PLEADED THAT THE ASSESSEE SHOULD BE ALLOWED TO CLAIM DEDUCTION UNDER SECTION 10B OR ALTERNATIVELY UNDER SECTION 10A OF THE ACT. 5. ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 6. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH T HE ORDERS OF AUTHORITIES BELOW. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 10B OF THE ACT. IN VIEW OF THE EXPLANATION 2(IV) TO SECTION 10B OF THE ACT, THE EXPRESSION 100% EOU MEANS AN UNDERTAKING WHICH HAS BEEN APPROVED AS 100% EOU BY THE BOARD APPOINTED IN THIS BEHALF BY THE CENTRAL GOVERNMENT UNDER SECTION 14 OF INDUSTRIAL (DEVELOPMENT & REGULATIONS) ACT, 1951, AND NO SUCH BOARD HAS BEEN ESTABLISHED, THE ASSESSEE WAS REQUESTED TO SHOW CAUSE AS TO WHY DEDUCTION UNDER SECTION 10B OF THE ACT SHOULD NOT BE DENIED. THE ASSESSEE VIDE ITS LETTER DATED 28.02.2014 HAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE COMPANY HAS BEEN REGISTERED WITH SOFTWARE TECHNOLOGY PARKS OF INDIA AS 100% EOU AND COMPLIED WITH ALL THE REQUIREMENTS AS STIPULATED IN THE PROVISIONS OF THE INCOME TAX ACT VIZ., MAINTENANCE OF SEPARATE BOOKS OF ACCOUNTS, RECEIPT OF EXPORT PROCEEDS WITHIN THE STIPULATED PERIOD, ETC. IT WAS ALSO SUBMITTED THA T THE APPROVAL UNDER SECTION 10B OF THE I.T.A. NO . 1 0 30 /M/ 16 4 ACT AS 100% EOU HAS BEEN GRANTED BY THE COMPETENT AUTHORITIES AND THE ASSESSEE HAVING COMPLIED WITH ALL THE REQUIREMENTS AND IS ENTITLED FOR THE DEDUCTION AS CLAIMED BY IT. ADMITTEDLY, IN THIS CASE, THE DIRECTOR OF S TPI HAS GRANTED PERMISSION TO THE ASSESSEE AS 100% EXPORT ORIENTED UNIT UNDER THE STP SCHEME. 7. IT IS PERTINENT TO MENTION HERE THAT THE ASSESSING OFFICER VIZ., THE ACIT, COMPANY CIRCLE V(1), CHENNAI, IN THE CASE OF M/S. PLY TECHNOLOGY SOLUTIONS PRIVAT E LIMITED FOR THE ASSESSMENT YEAR 2011 - 12 HAS ALLOWED THE ASSESSEE TO CLAIM DEDUCTION UNDER SECTION 10B OF THE ACT SINCE THE ASSESSEE WAS APPROVED AS 100% EO U BY THE DIRECTOR, STPI, CHENNAI . W HEREAS, IN THE PRESENT CASE, THE ASSESSING OFFICER VIZ., DCIT, C OMPANY CIRCLE V(2) HAS TAKE N A DIFFERENT STAND. IN THE LATTER CASE, AGAINST THE ORDER OF THE ASSESSING OFFICER, THE LD. PCIT WAS OF THE OPINION THAT THE ASSESSEE HAS NOT RECEIVED THE APPROVAL FROM THE BOARD APPOINTED ON THIS BEHALF, BY THE CENTRAL GOVERNM ENT, AS A RESULT OF WHICH, THE ASSESSEE S UNDERTAKING CANNOT BE DEFINED AS 100% EOU AND ELIGIBLE TO CLAIM EXEMPTION UNDER SECTION 10B OF THE ACT AND BY PASSING AN ORDER UNDER SECTION 263 OF THE ACT, HE HELD THAT THE ASSESSMENT ORDER PASSED WAS ERRONEOUS AN D PREJUDICIAL TO THE INTEREST OF REVENUE DIRECT ING THE ASSESSING OFFICER TO PASS FRESH ORDER. BY RESPECTFULLY FOLLOWING THE DECISION OF THE PUNE BENCHES OF ITAT IN THE CASE OF ITO V. CAT LABS PVT. LTD. I.T.A. NO. 131/PN/2013 FOR THE ASSESSMENT I.T.A. NO . 1 0 30 /M/ 16 5 YEAR 2009 - 10 DATED 26.02.2014, THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. PLY TECHNOLOGY SOLUTIONS PRIVATE LIMITED V. ACIT IN I.T.A. NO. 544/MDS/2016 DATED 27.07.2016 HAS OBSERVED AS UNDER: 9. IN VIEW OF THE ABOVE DECISION OF THE PUNE BENCHES OF THE TRI BUNAL, WHEREIN, IT IS APPARENT THAT THE OVERWHELMING VIEW OF VARIOUS BENCHES OF THE TRIBUNALS HAVE BEEN DISCUSSED AND ARRIVED AT A CONCLUSION TO TREAT THE APPROVAL GRANTED BY THE STPI TO BE ENOUGH FOR THE FULFILLMENT OF CONDITION PRESCRIBED IN SECTION 10B OF THE ACT FOR APPROVAL OF THE EOU UNIT UNDER SECTION 14 OF INDUSTRIES (DEVELOPMENT & REGULATION) ACT, 1951. THEREFORE, WE ARE OF THE OPINION THAT THE BENEFIT CANNOT BE DENIED TO THE ASSESSEE DESPITE THE FACT THAT THE SECTION 10B OF THE ACT SPECIFICALLY TA LKS OF ONLY REGISTRATION UNDER SECTION 14 OF INDUSTRIES (DEVELOPMENT & REGULATION) ACT, 1951. THUS, RESPECTFULLY FOLLOWING THE DECISION OF THE PUNE BENCHES OF THE TRIBUNAL IN THE CASE OF ITO V. CAT LABS PVT. LTD. (SUPRA), WE SET ASIDE THE ORDER PASSED BY T HE LD. PCIT AND HOLD THAT THE ASSESSING OFFICER HAS RIGHTLY ALLOWED DEDUCTION UNDER SECTION 10B OF THE ACT. ACCORDINGLY, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 8. FOR THE SAKE OF REFERENCE, THE RELEVANT FINDINGS OF THE PUNE BENCHES IN THE CASE OF ITO V. CAT LABS PVT. LTD. (SUPRA) IS REPRODUCED AS UNDER: 7. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSI DERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ASSESSING OFFICER IN THE ASSESSMENT ORDER FOR A.Y. 2008 - 09 HAS ALSO DENIED THE CLAIM OF DEDUCTION U/S.10B ON THE GROUND THAT THE ASSESSEE COMPANY IS NOT A 100% EOU SINCE IT IS NOT APPROVED BY THE BOA RD APPOINTED IN THIS BEHALF BY THE CENTRAL GOVERNMENT U/S.14 OF THE INDUSTRIES (DEVELOPMENT AND REGULATION) ACT, 1951. FURTHER, THE 100% EOU AS PER STPI IS NOT AT PAR WITH THE 100% EOU APPROVED BY THE BOARD APPOINTED U/S.14 OF THE IDRA, 1951 BY THE CENTRAL GOVERNMENT. RELYING ON THE DECISION OF THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF INFOTECH ENTERPRISES LTD. (SUPRA) THE ASSESSING OFFICER DISALLOWED THE CLAIM. WE FIND ON AN APPEAL FILED BY THE ASSESSEE, THE LD.CIT(A) ALLOWED THE CLAIM OF DEDUCTIO N U/S.10B OF THE BY OBSERVING AS UNDER : '3.3.1. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE LAW AS ARE APPARENT FROM THE RECORDS. GROUND NO. 1 WHICH IS UNDER CONSIDERATION HAS BEEN RAISED IN AN ARGUMENTATIVE MANNER AND I.T.A. NO . 1 0 30 /M/ 16 6 THEREFORE, WHAT IS BE ING CONSIDERED FOR ADJUDICATION ARE 'WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPELLANT COMPANY CAN BE DENIED DEDUCTION U/S 10B ONLY BECAUSE THE APPROVAL WAS TAKEN FROM THE BODY OF STPI FORMED UNDER THE MINISTRY OF INFORMATION TECHNOLOGY, FO RMED BY THE GOVERNMENT FOR CONTROL, MONITORING AND REGULATION OF SOFTWARE EXPORTS AND NOT FROM THE BOARD APPOINTED ON BEHALF OF THE CENTRAL GOVERNMENT U/S 14 OF THE INDUSTRIES (DEVELOPMENT & REGULATION) ACT, 1951, DESPITE THE FACT THAT IN SIMILAR FACTS AND CIRCUMSTANCES THIS DEDUCTION HAS BEEN ALLOWED IN EARLIER ASSESSMENT YEARS.' FROM THE PERUSAL OF THE ASSESSMENT ORDER IT IS ABUNDANTLY CLEAR THAT THE AO HAS MAINLY RELIED ON THE NON - FULFILLMENT OF CONDITION PROVIDED IN THE SECTION, TO OBTAIN THE APPROVAL F ROM THE BOARD APPOINTED ON BEHALF OF THE CENTRAL GOVERNMENT U/S 14 OF THE INDUSTRIES (DEVELOPMENT & REGULATION) ACT, 1951 WHICH WAS FOUND SPECIFICALLY AVAILABLE IN EXPLANATION 2 TO SEC. 10B WHICH DEFINES A 100% EXPORT ORIENTED UNIT (EOU), TO WHICH THIS PRO VISION APPLIES. THE AO FOUND THAT THE EXPLANATION SAYS THAT 100% EXPORT ORIENTED UNDERTAKING MEANS AN UNDERTAKING WHICH HAS BEEN APPROVED AS A 100% EXPORT ORIENTED UNDERTAKING BY THE BOARD APPOINTED IN THIS BEHALF BY THE CENTRAL GOVERNMENT IN EXCISE OF POW ER CONFERRED BY SECTION 14 OF THE INDUSTRIES (DEVELOPMENT & REGULATION) ACT, 1951 (65 OF 1951, AND THE RULES MADE UNDER THAT ACT). AS THE APPELLANT HAD TAKEN THE APPROVAL OF 100% EXPORT ORIENTED UNIT FROM THE STPI, A TECHNICAL BODY OF MINISTRY OF INFORMATI ON & TECHNOLOGY FORMED FOR THE PURPOSE OF CONTROL, MONITORING AND REGULATION OF SOFTWARE EXPORTS, IT WAS HELD BY THE AO THAT THE STATUS OF EOU FOR THE PURPOSE OF DEDUCTION U/S 10B CANNOT BE RECOGNIZED. THE AO FOR THE ABOVE HAS ALSO PLACED RELIANCE ON THE D ECISION GIVEN BY THE ITAT, HYDERABAD IN THE CASE OF INFOTECH ENTERPRISES LTD. VS. JT.CIT (2003) 85 ITD 325 (HYD). THE APPELLANT HAS CONTENDED IN DETAIL IN THEIR SUBMISSION THAT THE FINDING OF THE AO IS HYPER TECHNICAL. THE MINISTRY OF INFORMATION TECHNOL OGY HAS SPECIFICALLY CONSTITUTED STPI FOR GRANTING 100% EOU APPROVAL TO THE UNITS ENGAGED IN THE MANUFACTURING OF SOFTWARES AND ITS EXPORTS AND THEREFORE, THIS APPROVAL MUST BE GIVEN RECOGNITION EQUIVALENT TO THE BOARD CONSTITUTED UNDER INDUSTRIES DEVELOPM ENT & REGULATION) ACT. THE APPELLANT HAS PLACED RELIANCE ON DIFFERENT JUDGMENTS, AS CAN BE SEEN FROM THE SUBMISSIONS QUOTED ABOVE, WHICH HAS APPROVED THE ALLOWABILITY OF THIS DEDUCTION ON THE BASIS OF STPI REGISTRATION AND IT WAS ALSO CLAIMED THAT THE ABOV E REFERRED JUDGMENTS HAVE BEEN GIVEN AFTER TAKING INTO ACCOUNT THE JUDGMENT OF INFOTECH ENTERPRISES LTD. RELIED UPON BY THE AO. THE APPELLANT HAS CLAIMED THAT ALL THE CONDITIONS PRESCRIBED IN THE SECTION HAVE BEEN FULFILLED. FROM THE PERUSAL OF THE ASSESSM ENT ORDER ALSO IT IS EVIDENT THAT THE APPELLANT HAS SUBMITTED SUBMISSIONS CLAIMING THAT ALL THE CONDITIONS ARE SATISFIED AND THE AO AFTER EXAMINING THE SUBMISSIONS MADE BY THE APPELLANT HAS MAINLY HELD THAT THE I.T.A. NO . 1 0 30 /M/ 16 7 APPELLANT IS NOT ELIGIBLE BECAUSE IT HAS NOT OBTAINED THE APPROVAL UNDER THE INDUSTRIES (DEVELOPMENT & REGULATION) ACT, 1951. A BRIEF REFERENCE CAN ALSO BE SEEN IN THE ASSESSMENT ORDER, WHICH CAN BE CONSIDERED TO BE SAYING THAT THE AO WAS OF THE OPINION THAT THE APPELLANT IS NOT ENGAGED IN THE MANUFA CTURING OF SOFTWARE. HOWEVER, THE ABOVE INFERENCE OF THE AO SEEMS TO BE LACKING ANY CONVICTION. SHE HAS ONLY REFERRED TO THE SALARY OF DIRECTORS TO CONCLUDE THAT THE APPELLANT IS NOT ENGAGED IN THE BUSINESS OF MANUFACTURING OF SOFTWARE, DESPITE THE FACT TH AT IN THE SUBMISSION MADE BEFORE HER, WHICH HAS BEEN QUOTED IN THE ASSESSMENT ORDER, IT IS EVIDENT THAT THE APPELLANT HAD CLAIMED BEFORE THE AO THAT IT HOLDS AN IPR FOR ANTIVIRUS SOFTWARE, WHICH ARE ADOPTED AND MODIFIED ACCORDING TO THE REQUIREMENTS OF THE CLIENTS AND THE COUNTRIES TO WHOM THE SOFTWARES ARE EXPORTED AFTER PUTTING THEM ON COMPACT DISKS. THE APPELLANT HAS ALSO CONTENDED THAT THE SUPREME COURT IN THE CASE OF ORACLES SOFTWARE INDIA LTD., QUOTED SUPRA HAD HELD THAT THE PROCESS OF TRANSFORMING BL ANK COMPACT DISKS INTO SOFTWARE LOADED DISKS AMOUNTS TO MANUFACTURING. THE APPELLANT HAD ALSO CONTENDED BEFORE THE AO THAT THE DEFINITION AVAILABLE IN THE SECTION IN EXPLANATION 2 OF SECTION 10B CLEARLY SAYS THAT A COMPUTER SOFTWARE MEANS ANY COMPUTER PROG RAMME RECORDED ON ANY DISK, TAPE, PERFORATED MEDIA, OR OTHER INFORMATION STORAGE DEVICE OR ANY CUSTOMIZED ELECTRONIC DATA OR ANY PRODUCT OR SERVICE OF SIMILAR NATURE WILL CONSTITUTE SOFTWARE WHICH ARE EXPORTED OR TRANSMITTED FROM INDIA TO ANY PLACE OUTSIDE INDIA BY ANY MEANS. THE AO HAS NOT EXAMINED ANY OF THESE CLAIMS OF THE APPELLANT BEFORE SAYING IN AN AMBIGUOUS MANNER THAT THE APPELLANT IS NOT ENGAGED IN THE ACTIVITY OF SOFTWARE MANUFACTURING ON THE BASIS OF SALARY AND NOTE ON ACTIVITY. THEREFORE, IT IS CLEAR FROM THE PERUSAL OF THE ASSESSMENT ORDER THAT THE AO HAS FAILED TO APPRECIATE THE MATERIALS PLACED BEFORE HER IN THE LIGHT OF THE PROVISIONS CONTAINED U/S 10B AND THE INTERPRETATIONS GIVEN TO THE RELEVANT ISSUES IN DIFFERENT JUDGMENTS AND HAS CONCLU DED WITHOUT ANY BASIS THAT THE APPELLANT IS NOT ENGAGED IN THE BUSINESS OF MANUFACTURING OF SOFTWARE. IN VIEW OF THE ABOVE AND THE FACT THAT THE SUBMISSIONS OF THE APPELLANT HAS REMAINED UNCONTROVERTED, DEMONSTRATING THAT THE APPELLANT IS ENGAGED IN THE AC TIVITY OF MANUFACTURING OF SOFTWARES, IT HAS TO BE HELD THAT THE AFORESAID FINDING OF THE AO IS NOT CORRECT. THEREFORE, IT HAS TO BE CONSIDERED IN THE FACTS OF THE CASE AVAILABLE ON RECORD THAT THE APPELLANT IS ENGAGED IN THE BUSINESS OF SOFTWARE MANUFACTU RING AND EXPORT. NOW COMING TO THE MAIN OBJECTION OF THE AO THAT THE APPROVAL IS NOT UNDER SEC. 14 OF THE INDUSTRIES (D&R) ACT, 1951, IT IS NOTED THAT THERE IS NO DISPUTE TO THE FACT THAT THE APPROVAL FOR EOU AVAILABLE WITH THE APPELLANT IS NOT FROM THE BO ARD CONSTITUTED U/S 14 OF THE INDUSTRIES (D&R) ACT, 1951, BUT IS FROM THE STPI. HOWEVER, THE CLAIM OF THE APPELLANT THAT THE STPI IS A BODY CONSTITUTED BY THE GOVT. OF INDIA FOR THE SPECIFIC PURPOSE OF GRANTING APPROVAL OF EOU STATUS TO UNITS ENGAGED IN TH E MANUFACTURING AND EXPORTS OF SOFTWARES AND THEREFORE, THE SAME IS EQUIVALENT AND SERVING THE SAME PURPOSE IS REQUIRED TO BE CONSIDERED, IS REQUIRED TO EXAMINED. FOR THIS PURPOSE, THE APPELLANT HAS REFERRED TO A COMPARATIVE TABLE GIVING REFERENCE TO THE B ENEFIT OF SECTION 10B IN FOREIGN TRADE POLICY OF 2004 - 2009 VIS - A - VIS EXPORT IMPORT POLICY, 2002 - I.T.A. NO . 1 0 30 /M/ 16 8 2007 AND EXPORT IMPORT POLICY 1992 - 1997, TO BRING THE POINT TO THE FORE THAT THE GOVERNMENT HAS ACCEPTED THE GRANT OF BENEFIT U/S 10B UNDER THE APPROVAL GRANTED BY STPI. THE APPELLANT HAS ALSO CLAIMED THAT THE ASSESSING OFFICER HAS INCORRECTLY FOLLOWED THE DECISION OF THE ITAT, HYDERABAD GIVEN IN THE CASE OF INFOTECH ENTERPRISES PVT. LTD. VS. JCIT (2003) 80 TTJ (HYD) 589, WHICH WAS DELIVERED BEFORE THE ISSUANCE O F INSTRUCTION NO. 1 OF THE CBDT DATED 31.3.2006 AND THE MINUTES OF THE INDUSTRIAL MINISTERIAL COMMUNICATION VIDE LETTER DATED 23.3.2006 ISSUED BY THE MINISTRY OF COMMUNICATION & TECHNOLOGY. FOR THE ABOVE, THE APPELLANT RELIED ON THE INSTRUCTION NO. 1 OF 20 06 OF THE CBDT AND THE DECISION OF THE ITAT, DELHI 'H' BENCH GIVEN IN THE CASE OF DCIT VS. VALLIANT COMMUNICATIONS LTD. (ITA NO. 2706/DEL/2008/ A.Y. 2005 - 06). THE APPELLANT HAS ALSO PLACED RELIANCE ON THE DECISION OF ITAT DELHI 'F' BENCH GIVEN IN THE CASE OF REGENCY CREATIONS LTD. VS. ACIT CIR.15(1), NEW DELHI, ITA NO. 1588/DEL/2010/A.Y. 2007 - 08); ITAT, AHMEDABAD 'B' BENCH GIVEN IN THE CASE OF ITO WARD 4(1) VS. E - ENFOCHIP LTD. (ITA NO. 2311/AHD/2008/A.Y. 2005 - 06); ITAT DELHI 'H' BENCH DECISION GIVEN IN THE CASE OF DCIT, CIR.16(1) VS. TECHNOVATE E - SOLUTIONS PVT. LTD. (ITA NO. 135/DEL/2011/A.Y. 2003 - 04); CIT VS. EXCELL SOFTECH LTD. (2008)219 CTR (P&H) 405. IT CAN BE SEEN THAT THE FINDING OF THE ASSESSING OFFICER THAT SEC. 10B REQUIRED REGISTRATION BY THE BOARD CONSTITUTED U/S 14 OF INDUSTRIES (DEVELOPMENT & REGULATION) ACT, 1951, IS PERFECTLY CORRECT BUT THE CLAIM OF THE APPELLANT THAT THE ABOVE REQUIREMENT SHOULD BE CONSTRUED TO HAVE BEEN LEGALLY FULFILLED AS PER THE DIRECTIONS OF THE MINISTRY OF COMMUNICATION & TECHNOLOGY AND THE INSTRUCTION ISSUED BY THE CBDT ON A SIMILAR ISSUE FOR REGISTRATION U/S 10A, ALSO LOOKS CORRECT. INSTRUCTION NO. 1 OF 2006 OF THE CBDT DATED 31.3.2006, IS IN RESPECT OF SEC. 10A BUT IN THIS INSTRUCTION IT HAS BEEN ACCEPTED THAT CONFUSI ON EXISTED IN RESPECT OF THE AUTHORITIES WHOSE APPROVAL SHOULD BE CONSIDERED TO BE FULFILLING THE CONDITIONS PRESCRIBED IN SEC. 10A AND IN VIEW OF THE SAME THE INSTRUCTION DIRECTED THE ASSESSING OFFICER AS UNDER: '6. THE MATTER HAS BEEN EXAMINED IN CONSU LTATION WITH THE OFFICERS OF THE DEPARTMENT OF INFORMATION TECHNOLOGY (EARLIER, DEPARTMENT OF ELECTRONICS). IN VIEW OF THE AMBIGUITY IN THE LEGAL STATUS OF THE APPROVAL BY DIRECTOR OF STPS, THE INTER - MINISTERIAL STANDING COMMITTEE WILL MEET TO CONSIDER THE APPROVALS BY DIRECTORS OF STPS ISSUED IN THE PAST. THEREFORE, WITH A VIEW TO AVOID INFRUCTUOUS DEMAND RAISED IN ASSESSMENT AND REASSESSMENT OF ASSESSES CLAIMING DEDUCTION U/S 10A, IT HAS BEEN DECIDED THAT THE CLAIM OF THE DEDUCTION U/S 10A OF THE INCOME T AX ACT, SHALL NOT BE DENIED TO STP UNITS ONLY ON THE GROUND THAT THE APPROVAL/ REGISTRATION TO SUCH UNIT HAS BEEN GRANTED BY THE DIRECTORS OF SOFTWARE TECHNOLOGY PARKS. HOWEVER, IT HAS TO BE ENSURED THAT ALL OTHER CONDITIONS SPECIFIED IN SEC. 10A ARE FULLY SATISFIED BEFORE ALLOWING ANY SUCH CLAIM.' I.T.A. NO . 1 0 30 /M/ 16 9 THE TRIBUNALS HAVE IN THE JUDGMENTS RELIED UPON BY THE APPELLANT, AFTER 2006 HAVE COME TO THE CONCLUSION THAT THE REGISTRATION GRANTED BY STPI SHOULD BE CONSIDERED AS ENOUGH FOR THE FULFILLMENT OF THIS CONDITIO N. THE TRIBUNALS HAVE ALSO CONSIDERED THE MINUTES OF THE INDUSTRIAL MINISTERIAL COMMUNICATION VIDE LETTER DATED 23.3.2006 ISSUED BY MINISTRY OF COMMUNICATION &TECHNOLOGY, AS DISCUSSED IN DETAIL IN THE CASE OF DCIT VS. VALLIENT COMMUNICATIONS LTD. IN REGENC Y CREATION LTD. JUDGMENT GIVEN IN ITA NO. 1588/DEL/2010/ A.Y. 2007 - 08, THE HON'BLE ITAT ALSO RELIED ON A CLARIFICATION OBTAINED UNDER RTI, WHICH HAD STATED THAT NO APPROVAL / RATIFICATION OF STPI APPROVAL IS REQUIRED FROM BOA FORMED BY MINISTRY OF COMMERCE U/S 14 OF INDUSTRIES (DEVELOPMENT & REGULATION) ACT, 1951. FOR THE ABOVE REASON, THE TRIBUNALS HAVE FOUND THAT THE DECISION OF INFOTECH ENTERPRISES LTD., 85 ITD 325 (HYD) WILL NOT BE APPLICABLE AFTER 2006. IN VIEW OF THE DISCUSSIONS MADE ABOVE, FROM WHICH IT IS APPARENT THAT THE OVERWHELMING VIEW OF THE TRIBUNALS HAVE BEEN TO TREAT THE APPROVAL GRANTED BY THE STPI TO BE ENOUGH FOR THE FULFILLMENT OF CONDITION PRESCRIBED IN SEC. 10B FOR APPROVAL OF THE EOU UNIT UNDER SEC. 14 OF INDUSTRIES (DEVELOPMENT & REG ULATION) ACT, 1951 AND ON THIS GROUND THE BENEFIT CANNOT BE DENIED HAS TO BE ACCEPTED DESPITE THE FACT THAT THE SEC. 10B SPECIFICALLY TALKS OF ONLY REGISTRATION U/S.14 OF INDUSTRIES (DEVELOPMENT & REGULATION) ACT, 1951. SINCE THE ASSESSING OFFICER IN THIS CASE HAS ONLY RAISED THIS ISSUE, THE SAME HAS TO BE NOT ALLOWED IN VIEW OF THE DISCUSSIONS MADE ABOVE. GROUND NO. 1 THEREFORE, IS ALLOWED. THE TRIBUNAL IN THE ABOVE RELIED CASES HAVE ALSO ALLOWED THE BENEFIT ON THE 'PRINCIPLE OF CONSISTENCY', WHICH IS APPL ICABLE IN THIS CASE ALSO. IT WAS DEMONSTRATED BY THE AR THAT SIMILAR BENEFIT U/S 10B WAS ALLOWED BY AO IN EARLIER ASSESSMENT YEARS AND NO ACTION TO WITHDRAW THE SAME HAS BEEN TAKEN. THUS ON THIS BASIS ALSO GROUND NO. 1 IS REQUIRED TO BE ALLOWED.' 7.1 W E FIND ALTHOUGH THE TAX EFFECT WAS MORE THAN THE PRESCRIBED MONETARY LIMIT THE REVENUE HAS NOT FILED ANY APPEAL AGAINST THE ORDER OF THE CIT(A) FOR THE A.Y. 2008 - 09. WE FIND THE CIT(A) WHILE ALLOWING THE APPEAL OF THE ASSESSEE FOR A.Y. 2009 - 10 HAS FOLLOWED HIS EARLIER ORDER UNDER IDENTICAL FACTS AND CIRCUMSTANCES. WE FIND THE LD.CIT(A) IN HIS ORDER FOR A.Y. 2008 - 09 HAS DISTINGUISHED THE DECISION OF THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF INFOTECH ENTERPRISES LTD. (SUPRA) AND FOLLOWING VARIOUS OTH ER DECISIONS HAS ALLOWED THE CLAIM OF DEDUCTION U/S.10B. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT POINT OUT ANY MISTAKE IN THE ORDER OF THE LD.CIT(A) NOR COULD CITE ANY OTHER DECISION TO CONTROVERT THE FINDING GIVEN BY THE LD.CIT(A). SINCE THE ORDER O F THE CIT(A) IS BASED ON VARIOUS DECISIO NS INCLUDING THE CBDT INSTRUCTION NO.1/2006, THEREFORE, IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A). ACCORDINGLY, WE UPHOLD THE SAME. THE GROUNDS RAISED BY THE REVENUE ARE ACCORDINGLY DISMISSED . I.T.A. NO . 1 0 30 /M/ 16 10 IN VIEW OF THE ABOVE FINDINGS, IT HAS BEEN CONCLUDED THAT TO TREAT THE APPROVAL GRANTED BY THE STPI TO BE ENOUGH FOR THE FULFILLMENT OF CONDITION PRESCRIBED IN SEC TION 10B OF THE ACT FOR APPROVAL OF THE EOU UNIT UNDER SEC TION 14 OF INDUSTRIES (DEVELOPM ENT & REGULATION) ACT, 1951 . THEREFORE, WE ARE OF THE OPINION THAT THE BENEFIT CANNOT BE DENIED TO THE ASSESSEE DESPITE THE FACT THAT THE SEC TION 10B OF THE ACT SPECIFICALLY RELATES TO REGISTRATION UNDER SECTION 14 OF INDUSTRIES (DEVELOPMENT & REGULATION) ACT, 1951. HOWEVER, IN THE PRESENT CASE, THE ASSESSEE HAS FILED COPY OF THE ORDER OF THE DIRECTOR, STPI, CHENNAI, REF. NO. STPIC/IMSC/2005 - 06/2163 DATED 8/12.12.2005 , WHEREIN, AS PER TERMS OF CONDITIONS AT PARA 3, IT HAS BEEN MENTIONED THAT THE ABOVE LETT ER OF PERMISSION IS VALID FOR 3 YEARS FROM ITS DATE OF ISSUE AND THE VALIDITY HAS TO BE GET EXTENDED BEFORE LAPSE OF TERM. MOREOVER, THE ASSESSEE HAS NOT FILED ANY OTHER DETAILS AS TO WHETHER IT HAS COMPLIED WITH THE TERMS AND CONDITIONS AS LAID DOWN THE L ETTER OF PERMISSION ACCORDED BY THE STPI. TO THAT EXTENT, THE ASSESSING OFFICER IS DIRECTED TO VERIFY AND IF THE ASSESSEE IS FOUND TO HAVE BEEN COMPLIED WITH THE TERMS AND CONDITIONS STIPULATED BY THE STPI, THEN THE ASSESSEE SHOULD BE ALLOWED TO CLAIM OF D EDUCTION UNDER SECTION 10B OF THE ACT. 9. THE ALTERNATIVE PLEA RAISED BY THE ASSESSEE FOR CLAIMING DEDUCTION UNDER SECTION 10A OF THE ACT BECOME INFRUCTUOUS AND DOES NOT WARRANT ADJUDICATION BY US SINCE WE HOLD THAT THE ASSESSEE IS ELIGIBLE TO CLAIM I.T.A. NO . 1 0 30 /M/ 16 11 DED UCTION UNDER SECTION 10B OF THE ACT IF THE ASSESSEE HAS COMPLIED WITH THE TERMS AND CONDITIONS OF THE STPI GRANTING PERMISSION AS 100% EOU. 10 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED ON THE 07 TH OCTOBER , 2016 AT CHENNAI. SD/ - SD/ - (A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 07. 1 0 .201 6 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.