Income Tax Officer, Hyderabad V. M/s. Intrack Inc., Secunderabad

ITA 1375/HYD/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5585 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 23-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D SUDHAKAR RAO
• Assessee Lawyers: GVSS MURTHY
• Keywords: Opportunity of being heard; Additional evidence; Revised return
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA.NO.1375/HYD/2013 ASSESSMENT YEAR 2010-2011 ITO, WARD 10(1) HYDERABAD VS. M/S. INTRACK INC. SECUNDERABAD. PAN AAAFI 9256J (APPELLANT) (RESPONDENT) FOR REVENUE : MR. D.SUDHAKAR RAO CIT-DR FOR ASSESSEE : MR. GVSS MURTHY DATE OF HEARING : 18.02.2014 DATE OF PRONOUNCEMENT : 18.02.2014 ORDER PER B. RAMAKOTAIAH, A.M. THIS IS REVENUE APPEAL AGAINST THE ORDER OF THE CIT(A)-VI, HYDERABAD DATED 15.07.2013 PERTAINING TO A .Y. 2010-2011. THE ONLY GRIEVANCE OF REVENUE IN THIS APPE AL IS WITH REGARD TO CIT(A) ALLOWING ASSESSEES CLAIM OF DEDUCT ION UNDER SECTION 10A OF THE ACT. 2. BRIEF FACTS OF THE ISSUE ARE THAT ASSESSEE IS CARRYING ON THE BUSINESS OF SOFTWARE DEVELOPMENT AND EXPORT AND IS A 100% EXPORT ORIENTED UNIT (IN SHORT EOU) REGIST ERED WITH SOFTWARE TECHNOLOGY PARK OF INDIA (IN SHORT STPI), MUMBAI. FOR THE IMPUGNED A.Y., ASSESSEE FILED RETURN OF INCOME OF RS.12,667/- AFTER CLAIMING EXEMPTION UNDER SE CTION 10B OF RS.6,10,13,584/-. THE A.O. DID NOT ALLOW THE CLA IM UNDER SECTION 10B AS THE ASSESSEE HAS NOT COMPLIED WIT H THE APPROVAL TO BE GIVEN BY THE BOARD APPOINTED BY THE CENT RAL ITA.NO.1375/HYD/2013 M/S. INTRACK INC. SECUNDERABAD GOVERNMENT AS PER SECTION 14 OF THE INDUSTRIES (DEVELOPME NT AND REGULATION) ACT, 1951. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FURNISHED AUDITORS CERTIFIC ATE IN FORM 50F IN TERMS OF SECTION 10A(5) OF THE ACT READ WITH RULE 16D OF I.T. RULES, 1962 AND CLAIMED DEDUCTION UNDER S ECTION 10A, AS IT HAS SATISFIED THE CONDITIONS STIPULATED UN DER SECTION 10A. A.O. DID NOT ALLOW THE CLAIM ON THE REASON THAT ASSESSEE HAS NOT FILED REVISED RETURN AND FOLLOWING THE PRINCIPLE LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF GOET ZE INDIA 284 ITR 323 DID NOT ALLOW THE CLAIM UNDER SECTION 10A. 3. LEARNED CIT(A) FOLLOWING THE ORDERS OF THE ITAT IN THE EARLIER YEAR I.E., A.Y. 2009-2010 HELD THAT ASSES SEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 10A, HAS COMPLIE D WITH THE REQUIREMENTS OF FILING FORM 50F BEFORE THE A.O. DURING T HE ASSESSMENT, ALLOWED THE ASSESSEES CLAIM U/S 10A AND D IRECTED THE A.O. TO EXAMINE THE CLAIM OF THE ASSESSEE. IN DOIN G SO, LEARNED CIT(A) RELIED ON VARIOUS PRINCIPLES AND ELABORATELY DISCUSSED THE ISSUES IN HIS ORDER. HE FINALLY CONCLUD ED VIDE PARA 5.7 AS UNDER : 5.7 ON ANALYSING THE CONDITIONS STIPULATED UNDER SU B- SECTION (5) OF SECTION 10A OF IT ACT, IT INDICATES TH AT THE ASSESSEE SHOULD BE RECOGNISED BY STPI AND THE AUDIT REPORT IN 56F SHOULD BE FILED ALONG WITH THE RETURN OF INCOME. IN THE CASE OF THE APPELLANT, IT IS AN UNDI SPUTED FACT THAT THE UNIT IS APPROVED BY THE STPI. THE SECO ND CONDITION I.E. FILING OF FORM 56F AS PER RULE 16D, WA S NOT FILED BY THE ASSESSEE ALONG WITH THE RETURN OF INCOME, BUT FILED DURING THE COURSE OF THE ASSESSMEN T PROCEEDINGS. IT IS A FACT THAT FORM 56G AS PER THE REQUIREMENT OF SEC.10B, WAS FILED ALONG WITH THE RET URN OF INCOME, BY THE APPELLANT, UNDER THE BELIEF THAT PROVISIONS OF SEC. 10B ARE APPLICABLE TO THEIR CASE , AS SUCH THERE WAS NO SCOPE FOR FURNISHING THE REQUIRED FORM 56F, ALONG WITH THE RETURN OF INCOME, ITA.NO.1375/HYD/2013 M/S. INTRACK INC. SECUNDERABAD SIMULTANEOUSLY. HOWEVER, IT IS ALSO A FACT, THE MOMENT THE ASSESSEE REALISED THAT PROVISIONS OF SEC.10A AR E APPLICABLE TO THE CASE, FORM 56F WAS FURNISHED, AT THE STAGE OF ASSESSMENT, IF NOT ALONG WITH THE RETURN OF INCOME, WHICH WAS NOT CONSIDERED BY THE A.O. IN THIS CONTEXT, IT MAY BE RELEVANT TO MENTION THAT, JUDICI AL DECISIONS REPEATEDLY UPHELD THE ACCEPTANCE OF REQUI RED CERTIFICATES, FURNISHED BEFORE COMPLETION OF ASSESSMENTS, FOR CLAIMING VARIOUS DEDUCTIONS UNDER CHAPTER-VIA. THIS ISSUE HAS BEEN CLEARLY DENOTED IN THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. RAMCO INTERNATIONAL (ITA NO. 417 OF 2008) DATED 08.12.2008. THE SAME LOGIC/RATIONALE APPEARS APPLICABLE TO THE CLAIMS MADE U/S. 10A/10B, WHERE THE REQUIRED CERTIFICATES FURNISHED BEFORE COMPLETION OF THE ASSESSMENT. IN THIS CASE, THE REQUI RED CERTIFICATE IN FORM 56F WAS FURNISHED BY THE APPELL ANT BEFORE THE A.O AT THE STAGE OF THE ASSESSMENT AND O N THE SAME GROUND, IT DESERVED TO BE CONSIDERED BY TH E A.O. IT IS ALSO RELEVANT TO MENTION THAT HON'BLE IT AT, HYDERABAD, IN THE CASE OF THE APPELLANT'S OWN CASE FOR AY 2009-10 (ITA NO. 1343 AND CO 143 OF 2012) VIDE I TS ORDER DATED 04.01.2013, HAS ADMITTED THE FURNISHING OF FORM 56F AS ADDITIONAL EVIDENCE AT THE APPELLATE ST AGE AND REMITTED THE MATTER BACK TO THE A.O FOR TAKING DECISION ON ASSESSEE'S CLAIM OF DEDUCTION U/S.10A, AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEA RD TO THE APPELLANT. FOR THE YEAR UNDER REFERENCE, THE APPELLANT CORRECTED THE MISTAKE MUCH EARLIER AND FURNISHED THE REQUIRED FORM 56F BEFORE THE A.O AT T HE STAGE OF ASSESSMENT ITSELF, AS SUCH THE APPELLANT H AS MORE REASONS TO CLAIM THE DEDUCTION U/S.10A, BEING T HE 100% EOU APPROVED BY STPI. ON THE SIMILAR SET OF FACTS FOR CLAIMING DEDUCTION U/S. 10B IN THE ORIGIN AL RETURN AND CLAIM FOR DEDUCTION U/S.10A MADE SUBSEQUENTLY, EITHER BY REVISING THE RETURNS OR MAD E BEFORE THE APPELLATE AUTHORITIES, VARIOUS TRIBUNALS HAVE DECIDED THE ISSUES IN FAVOUR OF THE ASSESSES. SOME OF SUCH DECISIONS ARE LISTED AS UNDER: (I) VNS MANRO TECHNOLOGIES PVT. LTD. (ITAT 'A' BENCH, HYDERABAD (ITA NO. 577/HYD/2012) (II) SUPREME NETSOFT PVT. LTD., ITAT 'A' BENCH, HYD ERABAD (ITA NO.1301/H/2011) ITA.NO.1375/HYD/2013 M/S. INTRACK INC. SECUNDERABAD (III) INFOSAGE SYSTEMS (INDIA) PVT. LTD., ITAT, A B ENCH, HYDERABAD (ITA.NO.952/H/2010) (IV) EFEXTRA E SOLUTIONS PVT. LTD. ITAT B BENCH, DE LHI (ITA.NO.313/DEL/2012). 3.1. FURTHER ANALYZING THE VARIOUS OTHER CASES ON THE ISSUE OF CLAIM MADE BEFORE A.O., THE CIT(A) FINALLY C ONCLUDED VIDE PARA 5.11 OF HIS ORDER AS UNDER : 5.11. THUS, BY CONSIDERING THE FACT THAT THE APPELLANT BEING A 100% EOU UNIT APPROVED BY STPI, THOUGH SUCH CLAIM WAS NEITHER MADE IN ORIGINAL RETURN, WAS MADE DURING THE ASSESSMENT PROCEEDINGS, BY FILING THE RELEVANT AUDIT REPORT IN FORM 56F AND AS SUPPORTED BY THE FINDINGS DECISIONS BY VARIOUS ITAT (SUPRA), IT IS HELD THAT THE APPELLANT IS ELIGIBLE FOR DEDUCTION U/S.10A . THE FACTS OF GOETZE (INDIA) LTD., AS RELIED UPON BY THE A.O. IN ASSESSMENT ORDER, IN DENYING THE DEDUCTION U/S.10A, WITHOUT CONSIDERING THE SUBMISSIONS OF THE APPELLANT, ARE DISTINGUISHABLE FROM THE FACTS OF THE CASE. HENCE, IT CAN BE CONCLUDED THAT THE APPELLANT IS ELIGIBLE FOR DEDUCTION U/S.10A, ON THE LINES OF THE DECISION OF ITAT, IN APPELLANT'S OWN CASE FOR AY 2009-10 (SUPRA) AND THE CATENA OF OTHER DECISIONS CITED (SUPRA). ACCORDINGLY, THE A.O IS DIRECTED TO EXAMINE THE CLAIM OF THE APPELLANT, AS MADE BEFORE THE A.O DURING THE ASSESSMENT PROCEEDINGS AND GRANT THE DEDUCTION U/S.10A, BY AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE APPELLANT. THIS GROUND OF APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 3.2. THE REVENUE IS AGGRIEVED AND IS IN APPEAL ON THE ABOVE ISSUES. 4. AFTER CONSIDERING THE RIVAL CONTENTIONS AND PERUSING THE ORDERS OF THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE AY 2009-2010 IN ITA.NO.1343/HYD/2012 DATED 04.01.2013, WE DO NOT SEE ITA.NO.1375/HYD/2013 M/S. INTRACK INC. SECUNDERABAD ANY REASON TO DIFFER FROM THE FINDINGS/DIRECTIONS OF THE LEARNED CIT(A). OBVIOUSLY, ASSESSEE WAS NOT ELIGIBLE F OR DEDUCTION UNDER SECTION 10B AND THEREFORE, MADE AN ALTERNATE CLAIM FOR DEDUCTION UNDER SECTION 10A FOR WHICH IT WAS ELIGIBLE. ASSESSEE ALSO FILED RELEVANT A UDITOR CERTIFICATE AND COMPLIED WITH THE PROVISIONS. A.O. SHOULD NOT HAVE DENIED THE CLAIM WHEN ASSESSEE IS OTHERWISE ELIGIBLE. THEREFORE, SINCE LEARNED CIT(A) CONSIDERED T HE PRINCIPLES ON THE ISSUE IN MAKING AN ALTERNATE CLAIM , WE AFFIRM THE ORDER OF THE CIT(A). ASSESSING OFFICER I S DIRECTED TO ALLOW THE DEDUCTION UNDER SECTION 10A AFTER VERIFYING THE QUANTIFICATION OF THE AMOUNT AND COMPLIANCE WITH THE PROVISIONS OF LAW AND AFTER GIVI NG A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS DIRECTED BY THE CIT(A). 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.02.2014. SD/- SD/- (ASHA VIJAYARAGHAVAN) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACOUNTANT MEMBER HYDERABAD, DATED 18 TH FEBRUARY, 2014 VBP/- COPY TO : 1. ITO, WARD 10(1) , HYDERABAD. 2. M/S. INTRACK INC. D.NO.2-3-21/2, 1 ST FLOOR, RANIGUNJ CIRCLE, SECUNDERABAD. 3. CIT(A)-VI, HYDERABAD 4. CIT-V, HYDERABAD 5. D.R. ITAT, B BENCH, HYDERABAD.