The Dy. Commissioner of Income Tax, Circle-3(3), Ahmedabad V. M/s. Hitech Infosoft, Ahmedabad

ITA 1625/AHD/2016

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3923 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 17-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALIT P JAIN
• Assessee Lawyers: V S BANTHIA
• Keywords: Rule of consistency; Competent authority
• Section: 10B; 147; 263; 10

Judgement Text

, M MM MH HH H IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD L LL LOZJH OZJH OZJH OZJH OLHE OLHE OLHE OLHE VGEN VGEN VGEN VGEN] YS[KK ] YS[KK ] YS[KK ] YS[KK LNL; ,OA LNL; ,OA LNL; ,OA LNL; ,OA EK/KQFERK EK/KQFERK EK/KQFERK EK/KQFERK JKW; JKW;JKW; JKW;] U;KF;D ] U;KF;D ] U;KF;D ] U;KF;D LNL; LNL; LNL; LNL; DS LE{KA DS LE{KA DS LE{KA DS LE{KA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SMT MADHUMITA ROY, JUDICIAL MEMBER ITA NO.1625/AHD/2016 ( / ASSESSMENT YEAR : 2007-08) DCIT, CIR 3(3), AHMEDABAD / VS. M/S. HITECH INFOSOFT, 201-E, SHILP SQUARE B, OPP. HIMALAYA MALL, DRIVE-IN-ROAD, AHEMDABAD. ./ ./ PAN/GIR NO. : AADFH 7142 M ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI LALIT P. JAIN, SR.D.R. / RESPONDENT BY : SHRI V. S. BANTHIA, A.R. / DATE OF HEARING 16/08/2018 !'# / DATE OF PRONOUNCEMENT 03/10/2018 $% / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-3, AHMEDABAD, VIDE APPEAL NO.CIT(A)-3/CIR.3(3)/26/15-16 DTD. 07.04.2016 FOR T HE ASSESSMENT YEAR (AY) 2007-08. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF EXEMPTION U/S. 10B OF THE ACT OF RS .1,27,84,850/- 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS BY NOT APPRECIATING THAT THE ASSESSEE HAD FAILED TO FULFILL THE CONDITI ONS LAID DOWN FOR ITA NO.1625/AHD/2016 DCIT VS. M/S. HITECH INFOSOFT ASST.YEAR 2007-08 - 2 - EXEMPTION U/S 10B OF THE ACT AND AS SUCH NOT ELIGIB LE FOR EXEMPTION. 3. THE LD, CIT(A) HAS ERRED IN LAW AND ON FAC TS BY NOT APPRECIATING THAT THE APPROVAL GRANTED TO THE UNIT BY THE STPI, GANDHINAGAR HAS NOT BEEN RATIFIED BY THE BOA AS REQUIRED UNDER CLAUSE (IV) OF EXPLANATION 2 OF SECTION 10B OF THE ACT. 4. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACT S IN HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S 10A OF THE A CT; THOUGH NO SUCH CLAIM WAS MADE IN THE RETURN OF INCOME. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. COMMISSIONER OF INCOME TAX (A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 6. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE L D. COMMISSIONER OF INCOME TAX (A) MAY BE SET-ASIDE AND THAT OF THE ASS ESSING OFFICER BE RESTORED. 3. THE REVENUE HAS RAISED AS MANY AS SIX GROUNDS OF APPEAL BUT THE ISSUE INVOLVED IS THAT LD CIT(A) ERRED IN GRANTING THE EXEMPTION TO THE ASSESSEE U/S 10B OF THE ACT THOUGH THE SPECIFIED CO NDITIONS WERE NOT FULFILLED. 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM AND 100% EXPORT ORIENTED UNIT (EOU) REGISTERED UNDER SO FTWARE TECHNOLOGY PARKS OF INDIA (STPI). THE ASSESSEE HAS CLAIMED DEDUCTION U/S 10B OF THE ACT AMOUNTING TO RS. 1,27,84,850/- O NLY. THE AO DURING THE ASSESSMENT PROCEEDINGS OBSERVED THAT THE STPI U NIT OF THE ASSESSEE WAS NOT APPROVED BY THE BOARD OF APPROVALS AS REQUI RED U/S 10B OF THE ACT. ACCORDINGLY, THE AO SOUGHT AN EXPLANATION FROM THE ASSESSEE. 4.1 THE ASSESSEE BEFORE THE AO SUBMITTED THAT THE L D. CIT(A) HAS GRANTED EXEMPTION U/S 10B OF THE ACT IN THE A.Y. 20 09-10 VIDE ORDER DATED 25.05.2013 IN APPEAL NO.CIT(A)-XI/366/WD-6(2) /11-12. ITA NO.1625/AHD/2016 DCIT VS. M/S. HITECH INFOSOFT ASST.YEAR 2007-08 - 3 - 4.2 THE UNIT WAS APPROVED AS STPI WHICH IS SUFFICIE NT ENOUGH TO MEET THE REQUIREMENT OF APPROVAL AS SPECIFIED U/S 10B OF THE ACT. 4.3 THE ASSESSEE IN SUPPORT OF HIS CLAIM ALSO RELIE D ON VARIOUS INSTRUCTIONS/CIRCULARS ISSUED BY THE CBDT. 4.4 HOWEVER, THE AO DISAGREED WITH THE SUBMISSION O F THE ASSESSEE AND DISALLOWED THE EXEMPTION CLAIMED BY IT U/S 10B OF THE ACT AFTER HAVING RELIANCE ON VARIOUS CBDT CIRCULARS / INSTRUC TIONS AND ON THE JUDGMENTS OF DELHI HIGH COURT IN THE CASE OF CIT VS . REGENCY CREATION LTD. REPORTED IN 27 TAXMANN.COM 322. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO LD CI T(A). THE ASSESSEE BEFORE THE LD CIT(A) SUBMITTED THAT THERE WAS NO PROVISIONS PRESCRIBED UNDER THE ACT FOR TAKING THE APPROVAL FR OM THE BOARD OF APPROVALS FOR STPI REGISTERED UNITS. THUS, THE UNIT S APPROVED BY THE STPI ARE ELIGIBLE FOR DEDUCTION U/S 10B OF THE ACT. THE ASSESSEE IN SUPPORT OF HIS CLAIM RELIED ON THE ORDER OF PUNE TRIBUNAL IN T HE CASE OF CAT LABS PVT. LTD. VS. DCIT IN ITA NO.131/PN/2013 PERTAINING TO T HE A.Y. 2009-10 VIDE ORDER DATED 20.02.2014. 5.1 THE ASSESSEE IN SUPPORT OF HIS CLAIM ALSO RELIE D ON VARIOUS INSTRUCTIONS/NOTIFICATIONS ISSUED BY THE CBDT. ITA NO.1625/AHD/2016 DCIT VS. M/S. HITECH INFOSOFT ASST.YEAR 2007-08 - 4 - 5.2 THE LD CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE ALLOWED EXEMPTION U/S 10B OF THE ACT BY OBSERVING A S UNDER: 5.2 I HAVE GONE THROUGH THE OBSERVATIONS MADE BY T HE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND THE SUBMISSION FILED BY THE APPELLANT. THE FACTS SUBMITTED BY APPELLANT ARE THA T THE EXPORTS ARE CERTIFIED BY STPI GANDHI NAGAR AND RESERVE BANK OF INDIA, AHMEDABAD. THE FIRM HAS NOT DONE ANY DOMESTIC BUSIN ESS OR SALES. THE ACCOUNTS OF THE FIRM ARE AUDITED BY QUALIFIED CHART ERED ACCOUNTANT (CA) WHO HAS VERIFIED THE ACCOUNTS AND CERTIFIED TH AT WHOLE OF THE INCOME DECLARED BY THE APPELLANT IS EXEMPT U/S 10B OF THE IT ACT. DATA PROCESSING WAS DONE MAINLY FOR SNL FINANCIAL, CHARL OTTESVILLE, VIRGINIA, USA, COLLEGE SOURCE USA SOFTWARE AND ANIMATION WORK WERE EXECUTED FOR VARIOUS CLIENTS OF US, UK AND AUSTRALIA. ALL TH E PAYMENT WERE RECEIVED THROUGH BANKING CHANNEL TRANSFER FROM INTE RNATIONAL CLIENTS AND DULY CERTIFIED BY RBI AND STPI. THE APPELLANT H AS CLAIMED THAT NECESSARY APPROVALS HAVE BEEN TAKEN FROM REQUISITE AUTHORITIES AND FORM 56G DATED 18.10.2007 FROM CA HAS BEEN FILED AL ONGWITH RETURN OF INCOME ON 27.10.2007. THE APPELLANT IS OF THE VIEW THAT CBDT HAS CLARIFIED THE MATTER OF EXEMPTION U/S10A AND STPI I S THE AUTHORITY UNDER LAW FOR SUCH REGISTRATION AND CLAIM AND THE SAME IN STRUCTIONS ALSO APPLY IN CASE OF DEDUCTION U/S.10B. IT IS SUBMITTED THAT FOR ALL PRACTICAL PURPOSES THE STPI IS THE DEVELOPMENT COMMISSIONER A S ENVISAGED IN LAW. AS PER CBDT IN ITS CIRCULAR NO. 149/194/2004/TPL DA TED 06.01.2005 AND CIRCULAR NO. 200/20/2006/INCOME TAX ACT, 1961-1 DATED 31.3.2006 IT HAS BEEN DIRECTED TO TREAT THE GRANT OF REGISTRA TION BY STPI AS VALID AGENCY FOR PURPOSES OF SECTION 10B. FORM NO.56G SAY S THAT THE APPELLANT (STPI) HAS GOT REGISTRATION CERTIFICATE O N 29.11.2004. THE APPELLANT RELIED ON THE ORDER OF THE ITAT IN CASE O F CAT LABS P. LTD, PUNE VS DEPARTMENT OF INCOME TAX DELIVERED ON 20 FE BRUARY, 2014 IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH 'A', P UNE ITA.NO.131/PN/2013 (ASSESSMENT YEAR 2009-10) WHERE IN THE APPROVAL BY STPI IS FOUND TO BE PROPER APPROVAL FOR DEDUCTIO N U/S 10B. FURTHER APPELLANT RELIED ON THE ORDER OF THE HIGH COURT OF PUNJAB AND HARYANA IN CASE OF M/S EXCEL SOFTECH LTD, CHANDIGARH VS COM MISSIONER OF INCOME TAX DELIVERED ON 24 JULY, 2008, ITA NO. 156 OF 2007 WHEREIN THE APPROVAL BY STPI IS FOUND TO BE PROPER APPROVAL FOR GRANTING DEDUCTION U/S. 10B. ITA NO.1625/AHD/2016 DCIT VS. M/S. HITECH INFOSOFT ASST.YEAR 2007-08 - 5 - THE APPELLANT RELIES ON THE FOLLOWING INSTRUCTIONS AND CASE LAWS: I. CIRCULAR NO. 684 DATED 10.06.94 ISSUED BY CBDT II NOTIFICATION OF CBDT NO. SO 890(E) DATED 26 .09.2000 III CIRCULAR NO 01/2005 DATED 6 TH JAN. 2005 ISSUED BY MINISTRY OF FINANCE GOVT. OF INDIA INSTRUCTION NO. 1/2006 FILE 200/20/2006/ATA-I DATE 37.03.2006 V. ITO V/S SECUNDERABAD SOFTWARE SERVICES HYDERA BAD PVT. LTD- SECUNDERABAD ITATB BENCH HYDERABAD ITA NO. 1501/HYD /2011. VI. CIT V/S EXCEL SOFTECH LTD. CHANDIGARH DECIDED B Y THE HIGH COURT OF PUNJAB AND HARAYANA - R. NO 156 OF 2007 VII. ITO PUNE V/S CAT LABS. PVT. LTD. PUNE ITA N O. 131,PN/2013 ASS. YEAR 2009-10 VIII. ORDER OF THE CIT(A) XI DATED 22.05.2013 IX. ITAT B BENCH AHMEDABAD QUALITY BPO SERVICES PVT. LTD. V/S ACIT CIRCLE 5 ITA NO. 120/AHD/2012 WHERE IN THE JU DGEMENT OF DELHI HIGH COURT IN REGENCY CREATION LTD. REFERRED BY THE LEARNED DCIT IS ALSO DEALT THE DOCUMENTS SUBMITTED BY APPELLANT ARE EXAMINED. THE AUDITOR/CA SHRI KISHOR GOYAL HAS SIGNED FORM 56G ON 18.10.2007 FOR CLAIM U/S.10B BEFORE THE DUE DATE OF FILING OF RETU RN OF INCOME AND THE RETURN HAS BEEN FILED ON 27.10.2007. PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT THE A.O. HAD DISALLOWED DEDUCTION CLAI MED U/S.10B OF THE I.T. ACT OF RS.1,27,84,850/- AS THE APPELLANT WAS N OT HAVING PROPER APPROVAL FROM BOARD OF APPROVALS (BOA) AS MANDATED, BY EXPLANATION 2(IV) OF SEC.10B OF THE I.T. ACT. IN ADDITION TO DI SCUSSING PROCEDURAL ASPECT PERTAINING TO THE ISSUE, THE AO HAS HEAVILY RELIED ON THE RATIO OF DELHI HIGH COURT IN THE CASE OF CIT VS. REGENCY CRE ATIONS LTD. IN THIS REGARD IT IS OBSERVED THAT THE CBDT VIDE CI RCULAR NO.684 DATED 10.06.94 HAS SPECIFICALLY ENLARGED THE OPERAT ION OF SEC.10B TO INCLUDE 100% EXPORT ORIENTED UNITS ESTABLISHED IN A PPROVAL ELECTRONIC HARDWARE TECHNOLOGY PARKS (EHTP) OR SOFTWARE TECHNO LOGY PARKS (STPJ7 THIS MAKES IT ABUNDANTLY CLEAR THAT THE APPE LLANT IS ELIGIBLE TO CLAIM DEDUCTION U/S 10B OF THE I.T. ACT AS THE APPE LLANT IS HAVING 100% EXPORT ORIENTED UNIT IN SOFTWARE TECHNOLOGY PARK, G ANDHINAGAR. THE CBDT VIDE NOTIFICATION NO.SO 890(E) DATED 26.09.200 0 FURTHER CLARIFIED THAT CHAPTER-IX OF EXPORT AND IMPORT POLI CY (1992 - 97) APPLICABLE TO EXPORT ORIENTED UNITS (EOUS) AND UNIT S OF EXPORT PROCESSING ZONES (EPZS) ALSO APPLY TO THE STP UNITS SUBJECT TO THE FOLLOWING MODIFICATIONS:- ITA NO.1625/AHD/2016 DCIT VS. M/S. HITECH INFOSOFT ASST.YEAR 2007-08 - 6 - (A) THE WORD 'STP' SHALL BE SUBSTITUTED FOR THE WOR D 'EOU/EPZ' 'EOU' OR 'EPZS', WHEREVER THEY OCCUR, IN THE PARAGR APHS. (B) THE WORDS 'DEVELOPMENT COMMISSIONER' WHEREVE R THEY OCCUR SHALL BE SUBSTITUTED BY THE WORDS 'CHIEF EXECUTIVE OF THE STP SOCIETY'. (C) THE WORD 'BOA' WHEREVER IT OCCURS, SHALL BE SU BSTITUTED BY THE WORD 'IMSC'. THEREFORE, IT IS CLEAR THAT STP UNITS ARE TREATED A T PAR WITH UNITS ESTABLISHED IN EXPORT ORIENTED UNITS AND EXPORT PRO CESSING ZONES. SECONDLY, FOR THE PURPOSES OF SECTION 10B, SUCH UNI TS REQUIRE APPROVAL FROM IMSC INSTEAD OF BOA. THIS ISSUE HAS BEEN FURTH ER CLARIFIED BY INTER MINISTERIAL COMMITTEE COMMUNICATION DATED 23. 03.2006 ISSUED BY SECRETARY, MINISTRY OF TELECOMMUNICATIONS AND TECHN OLOGIES. THE SALIENT FEATURES OF THIS COMMUNICATION DATED 23.03. 2006 ARE REPRODUCED AS UNDER:- 1. SOFTWARE TECHNOLOGY PARK OF INDIA (ST PI) IS A SOCIETY OWNED AND F ADMINISTERED BY THE GOVT. OF INDIA AN D THEREFORE IS STATE UNDER ARTICLE 12 OF THE CONSTITUTION OF INDIA . 2. THE STPI DIRECTORS ARE DULY AUTHORIZED AND FULLY EMPOWERED TO ISSUE APPROVALS AS 100% EOUS TO THE UNIT UNDER THE STP SCHEME UNDER DELEGATED POWERS GRANTED AS PER PARA 9.36 OF THE HANDBOOK OF PROCEDURES (VOL.1) 1997-2002. 3. ALL HE APPROVALS ISSUED BY THE STPI DIRECT ORS HAVE THE AUTHORITY OF INTER-MINISTERIAL STANDING COMMITTEE (IMSC). THE IMSC HAS PERIODICALLY REVIEWED THE VARIOUS APPROVALS GRANTED BY THE STPI DIRECTORS IN ACCORDANCE WITH THE GOVT. OF INDIA GUIDELINES/NOTIFICATIONS. ALL THE CURRENT APPROVALS GRANTED BY THE STPI DIRECTORS ARE THEREFORE, DEEMED TO BE VALID.' PERUSAL OF ABOVE COMMUNICATION MAKES IT CLEAR THAT ALL APPROVALS ISSUED BY STPI DIRECTORS HAVE THE AUTHORI TY OF INTER MINISTERIAL STANDING COMMITTEE (IMSC). THEREFORE, I T IS ABSOLUTELY CLEAR THAT APPROVALS ISSUED BY STPI DIRECTOR ARE HA VING BOA APPROVAL AS REQUIRED BY THE PROVISIONS OF EXPLANATION 2(IV) OF SECTION 10B. THE CASE OF DELHI HIGH COURT OF REGENCY CREATIONS LTD. WHICH WAS RELIED BY AO HAS BEEN CONSIDERED BY HON'BLE ITAT, AHMEDABAD I N THE CASE OF QUALITY BPO SERVICES PVT. LTD. VS. CIT DATED 04.11. 2015 BEFORE DECIDING SIMILAR ISSUE OF ALLOWING DEDUCTION U/S.10 B OF IT ACT, 1961. MY PREDECESSOR IN APPELLANT'S OWN CASE FOR A.Y.2009 -10 VIDE ORDER ITA NO.1625/AHD/2016 DCIT VS. M/S. HITECH INFOSOFT ASST.YEAR 2007-08 - 7 - NO.CIT(A)-XI/366/WD-6(2)/11-12 DATED 22.05.2013) HA S ALLOWED THE DEDUCTION U/S.10B OF IT ACT. IT IS NOTEWORTHY TO ME NTION THAT THE DEDUCTION WAS ALLOWED IN EARLIER YEAR AND RELIANCE IS PLACED IN THE CASE OF CIT VS. RELCO PVT. LTD. 359 ITR 291(MAD.) W HEREIN IT IS HELD, 'WHERE EXEMPTION U/S.10B WAS ALLOWED TO ASSESSES IN PREVIOUS ASSESSMENT YEAR, IN ABSENCE OF ANY VIOLATION OF CON DITION OF LICENSE, EXEMPTION WAS TO BE GRANTED FOR SUBSEQUENT YEAR ALS O'. THE FACT AND SUBSTANCE AS EMERGED FROM ABOVE IS THAT THE DEDUCTI ON U/S.10B HAS BEEN ALLOWED IN EARLIER AS WELL AS IN SUBSEQUENT YEAR. T HEREFORE, IS IS NOT THE NEW ISSUE, THE PRINCIPLE OF CONSISTENCY REQUIRED TO BE FOLLOWED AS HAS HELD IN FOLLOWING CASE LAWS: (I) DCIT VS. SULABH INTERNATIONAL SOCIAL SERVICE ORGANI SATION [350 ITR 189 (PATNA)] (II) CIT VS. RANGANATHAR & CO. [316 ITR 252 (MAD)] (III) GOPAL PUROHIT VS. JT. CIT [334 ITR 308 (SC ] IN VIEW OF ABOVE NARRATIVES, I AM INCLINED TO AGREE WITH THE CONTENTIONS OF A.R. FOR INTERMITTENT F.Y.2006-07 (A.Y.2007-08). ACCORDINGLY, THE AO IS DIRECTED TO ALLOW DEDUCTION U/S.10B OF RS.1,27,8 4,850/-. THE GROUND NO. 7, 8, 9, 10, 11 & 12 OF APPEAL ARE ALLOWED. 6. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. BEING AGGRIEVED BY THE ORDER OF LD CIT(A) REVENUE I S IN APPEAL BEFORE US. 6. LD DR BEFORE US VEHEMENTLY SUPPORTED THE ORDER O F AUTHORITIES BELOW. 7. ON THE OTHER HAND, LD AR SUBMITTED AS UNDER: THE APPEAL FILED BY THE REVENUE IS PRIMA FACIE NOT TENABLE AND DESERVES TO BE DISMISSED AS THE GROUNDS OF APPEAL A RE SETTLED IN FAVOR OF THE ASSESSEE BY THE INCOME TAX DEPARTMENT IN EARLIE R AND SUBSEQUENT YEARS. HONOURABLE ITAT HAS ALSO UPHELD THE ALLOWABI LITY OF EXEMPTION U/S 10B UNDER THE STPI APPROVAL SCHEME. ITA NO.1625/AHD/2016 DCIT VS. M/S. HITECH INFOSOFT ASST.YEAR 2007-08 - 8 - IN THE EARLIER YEARS AND IN THE SUBSEQUENT YEARS, T HE CLAIM OF THE ASSESSEE U/S 10 B ARE ALLOWED BY THE DEPARTMENT ON THE IDENTICAL FACTS IN THE CASE OF THE ASSESSEE HIMSELF. IN THE YEAR UNDER CONSIDERATION ALSO THE CLAIM WAS ALLOWED BY THE DEPARTMENT, BUT WITH THE CHANGE OF THE ASSESSING OF FICER THE CASE WAS REOPENED U/S 147 WITHOUT ANY REASON. THE CASE WAS R EOPENED ONLY ON THE BASIS OF MISINTERPRETATION OF FACTS AND WITHOUT UNDERSTANDING THE PROCEDURE LAID DOWN BY GOVT. OF INDIA IN IMPLEMENTI NG THE LAW RELATING TO EXEMPTION U/S 10B OF THE IT ACT. THE MATTER WAS EXPLAINED BEFORE THE CIT (A) BY THE ASSESSEE AND THE LEARNED CIT (A) ALLOWED THE CLAIM OF THE ASSESSEE A FTER EXAMINING ALL THE RELEVANT FACTS. THE CBDT HAS ALSO ISSUED INSTRU CTIONS AS PER CIRCULAR NO. 149/194/2004/TPL DATED 06.01.2005 AND CIRCULAR NO. 200/20//2006 DATED.31/03/2006 TO ALLOW SUCH CLAIM. WE RELY ON THE ORDER OF THE CIT (A) UNDER APPEAL. IN THE CIRCUMSTANCES IT IS SUBMITTED THAT THE APPEA L FILED BY THE REVENUE MAY BE DISMISSED. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE EXEMP TION CLAIMED BY THE ASSESSEE U/S 10B OF THE ACT WAS DENIED BY THE AO ON THE GROUND THAT THE APPROVAL OF STPI UNITS OF THE ASSESSEE WAS NOT RATI FIED BY THE BOARD OF APPROVALS AS MANDATED U/S 10B OF THE ACT. HOWEVER, THE LD CIT(A) REVERSED THE ORDER OF AO BY OBSERVING THAT THE APPR OVAL FROM STPI IS SUFFICIENT ENOUGH TO MEET THE REQUIREMENTS AS SPECI FIED U/S 10B OF THE ACT. 8.1 NOW THE CONTROVERSY BEFORE US IS THAT WHETHER T HE APPROVAL FROM STPI WITHOUT HAVING THE SAME RATIFIED BY THE BOARD OF APPROVAL IS ITA NO.1625/AHD/2016 DCIT VS. M/S. HITECH INFOSOFT ASST.YEAR 2007-08 - 9 - SUFFICIENT TO CLAIM THE DEDUCTION U/S 10B OF THE AC T. IN THIS REGARD, WE NOTE THAT THE HONBLE ITAT, PUNE BENCH IN THE CASE OF CAT LAB PVT. LTD. (SUPRA) IN THE IDENTICAL FACTS AND CIRCUMSTANCE HELD THAT THERE IS NO NEED TO TAKE SEPARATE APPROVAL FROM THE BOA FOR CLAIMING THE DEDUCTION U/S 10B OF THE ACT. THE RELEVANT EXTRACT IS REPRODUCED BELOW: THE TRIBUNALS HAVE IN THE JUDGMENTS RELIED UPON BY THE APPELLANT, AFTER 2006 HAVE COME TO THE CONCLUSION THAT THE REG ISTRATION GRANTED BY STPI SHOULD BE CONSIDERED AS ENOUGH FOR THE FULFILL MENT OF THIS CONDITION. THE TRIBUNALS HAVE ALSO CONSIDERED THE M INUTES OF THE INDUSTRIAL MINISTERIAL COMMUNICATION VIDE LETTER DA TED 23.3.2006 ISSUED BY MINISTRY OF COMMUNICATION &TECHNOLOGY, AS DISCUS SED IN DETAIL IN THE CASE OF DCIT VS. VALLIENT COMMUNICATIONS LTD. I N REGENCY CREATION LTD. JUDGMENT GIVEN IN ITA NO. 1588/DEL/20 10/ A.Y. 2007-08, THE HON'BLE ITAT ALSO RELIED ON A CLARIFICATION OBT AINED 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 APPL ICABLE AFTER 2006. IN VIEW OF THE DISCUSSIONS MADE ABOVE, FROM WHICH IT I S APPARENT THAT THE OVERWHELMING VIEW OF THE TRIBUNALS HAVE BEEN TO TRE AT THE APPROVAL GRANTED BY THE STPI TO BE ENOUGH FOR THE FULFILLMEN T OF CONDITION PRESCRIBED IN SEC. 10B FOR APPROVAL OF THE EOU UNIT UNDER SEC. 14 OF INDUSTRIES (DEVELOPMENT & REGULATION) ACT , 1951 AND ON THIS GROUND THE BENEFIT CANNOT BE DENIED HAS TO BE ACCEPTED DES PITE 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 TH EREFORE, IS ALLOWED. THE TRIBUNAL IN THE ABOVE RELIED CASES HAVE ALSO AL LOWED THE BENEFIT ON THE 'PRINCIPLE OF CONSISTENCY', WHICH IS APPLICABLE 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 J W ITHDRAW THE SAME HAS BEEN TAKEN. THUS ON THIS BASIS ALSO GROUND NO. 1 IS REQUIRED TO BE ALLOWED.' ITA NO.1625/AHD/2016 DCIT VS. M/S. HITECH INFOSOFT ASST.YEAR 2007-08 - 10 - 8.2 WE ALSO NOTE THAT THE ITAT AHMEDABAD BENCH HAS ALSO DECIDED THE SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE IN THE CASE OF QUALITY BPO SERVICES PVT. LTD. VS. ACIT IN ITA NO.120/AHD/2012 FOR ASST. YEAR 2008-09 VIDE ORDER DATED 04.11.2015 AFTER CONSIDERI NG THE JUDGMENT OF DELHI HIGH COURT IN THE CASE OF REGENCY CREATION LTD (SUPRA) . THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED AS UNDE R: 'WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IT IS ADMITTED FA CT THAT THE ASSESSEE HAS OBTAINED THE APPROVAL FROM STPI, HYDERABAD AS 1 00% EOU. THE CIT'S FINDING IS THAT THE ASSESSEE IS NOT ELIGIBLE FOR RELIEF UNDER ASST. YEAR 2008-09 SECTION 10B OF THE ACT ONLY ON THE GROUND THAT 100% EOU UNDER STPI SCHEME CANNOT BE EQUATED WITH THE 100% E OU APPROVED BY THE BOARD. SINCE WE HAVE ALREADY HELD IN THE CASE O F SUDHARANI (SUPRA) THAT THE APPROVAL OF 100% EOU BY THE BOARD AND STPI IS ONE AND THE SAME AND HENCE THE ASSESSEE IS ELIGIBLE FOR EXEMPTI ON UNDER SECTION 10B OF THE ACT. IT IS TO BE NOTED THAT THE VALIDITY OF AN ORDER UNDER SECTION 263 OF THE ACT HAS TO BE TESTED WITH REGARD TO THE POSI TION OF LAW AS IT EXISTS ON THE DATE ON WHICH SUCH AN OR DER IS PASSED BY THE CIT. IN THE CASE UNDER CONSIDERATION, IT IS CLEAR T HAT ON THE DATE, WHEN THE CIT PASSED HIS ORDER UNDER SECTION 263 OF THE ACT, THE VIEW TAKEN BY THE TRIBUNAL IN THE CASE OF SUDHARANI (SUPRA). IT I S SETTLED LAW THAT WHEN TWO VIEWS ARE POSSIBLE ON THE DATE OF THE ORDER PAS SED BY THE COMMISSIONER, THE CIT SHOULD AGREE WITH THE VIEW TA KEN BY THE ASSESSING OFFICER WAS IN CONSONANCE WITH VIEW TAKEN BY THIS TRIBUNAL, EVEN IF THERE HAS BEEN A LOSS OF REVENUE. HENCE, PO WERS UNDER SECTION 263 OF THE ACT CANNOT BE EXERCISED BY THE CIT. OUR VIE W IS FORTIFIED BY THE JUDGMENT OF DELHI HIGH COURT IN THE CASE OF CIT VS. HONDA SIEL POWER PRODUCTS PVT. LTD . IN ITA NOS.1376/2009 AND 1382/2009 DATED 5.7.2010. IN VIEW OF THE ABOVE, WE REVERSE THE ORDE R OF THE CIT AND ALLOW THE APPEAL FILED BY THE ASSESSEE. 7. IN THE LIGHT OF DECISIONS OF CO-ORDINATE BENCH A S WELL AS OTHER BENCHES OF THE TRIBUNAL, WHEREIN IT HAS BEEN CATEGO RICALLY HELD THAT APPROVAL BY SOFTWARE TECHNOLOGY PARKS OF INDIA COME S UNDER THE MINISTRY OF COMMUNICATION & INFORMATION TECHNOLOGY & IS A COMPETENT AUTHORITY TO GRANT APPROVAL TO SUCH UNITS FOR CLAIMING ITA NO.1625/AHD/2016 DCIT VS. M/S. HITECH INFOSOFT ASST.YEAR 2007-08 - 11 - BENEFITS U/S 10B AS 100% EXPORT ORIENTED UNDERTAKIN G AND THE SAME IS POSSESSED BY ASSESSEE AND ALSO LOOKING TO THE FACTS OF THE CASE OF ASSESSEE WHEREIN ASSESSEE HAS BEEN ALLOWED DEDUCTIO NS U/S 10B IN ASST. YEARS 2007-08, 2010-11 & 2011-12 CONSISTENTLY, WE A RE OF THE CONSIDERED VIEW THAT THE ASSESSEE'S CLAIM OF DEDUCT ION UNDER SECTION 10B AT RS.67,08,733/- IS JUSTIFIED AND ACCORDINGLY THE ORDER OF CIT(A) IS QUASHED AND THE APPEAL OF ASSESSEE IS ALLOWED. 8.3 IN ADDITION TO THE ABOVE, WE ALSO NOTE THAT THE LD CIT(A) IN THE OWN CASE OF THE ASSESSEE FOR THE ASST. YEAR 2009-10 ALLOWED THE EXEMPTION U/S 10B OF THE ACT AFTER DUE VERIFICATION . AGAINST THE ORDER OF LD CIT(A) FOR ASST. YEAR 2009-10, THE REVE NUE HAS NOT PREFERRED ANY APPEAL WHICH IMPLIES THAT THE ORDER O F THE LD CIT(A) HAS REACHED TO ITS FINALITY. LEARNED DR HAS ALSO NO T DISPUTED THE FACT THAT THE APPEAL WAS NOT PREFERRED BY THE REVEN UE AGAINST THE ORDER OF LD CIT(A) FOR THE A.Y. 2009-10 ON THE ISSU E OF EXEMPTION U/S 10B OF THE ACT. IN SUCH CIRCUMSTANCES WE ARE OF THE VIEW THAT NO APPEAL CAN BE FILED BY THE REVENUE, ONCE, THE OR DER OF LD. CIT(A) IN ANY OF THE YEAR HAS REACHED TO ITS FINALI TY. IN THIS REGARD, WE FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF H ONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA AND OTH ERS VS. KAUMUDINI NARAYAN DALAL AND ANOTHER REPORTED IN 249 ITR 219 WHEREIN, IT WAS HELD AS UNDER: 1. THE ORDER UNDER CHALLENGE IN THIS APPEAL BY THE RE VENUE FOLLOWED THE EARLIER JUDGMENT OF THE SAME HIGH COUR T IN THE CASE OF PRADIP RAMANLAL SHETH V. UNION OF INDIA [1993] 2 04 ITR 866 (GUJ.) . THE LEARNED COUNSEL FOR THE REVENUE STATES THAT T HE PAPERS BEFORE US SUGGEST THAT A SPECIAL LEAVE PETITION WAS PREFERRED AGAINST THAT JUDGMENT BUT HE HAS NO INFORMATION AS TO WHAT HAPPENED THEREAFTER. THE LEARNED COUNSEL FOR THE RE SPONDENTS ITA NO.1625/AHD/2016 DCIT VS. M/S. HITECH INFOSOFT ASST.YEAR 2007-08 - 12 - STATES THAT THEIR ENQUIRIES WITH THE REGISTRY REVEA L THAT NO APPEAL AGAINST THAT JUDGMENT WAS PREFERRED BY THE REVENUE. 2. IF THE REVENUE DID NOT ACCEPT THE CORRECTNESS OF T HE JUDGMENT IN THE CASE OF PRADIP RAMANLAL SHETH (SUPRA), IT SHOUL D HAVE PREFERRED AN APPEAL THEREAGAINST AND INSTRUCTED COU NSEL AS TO WHAT THE FATE OF THAT APPEAL WAS OR WHY NO APPEAL W AS FILED. IT IS NOT OPEN TO THE REVENUE TO ACCEPT THAT JUDGMENT IN THE CASE OF THE ASSESSEE IN THAT CASE AND CHALLENGE ITS CORRECTNESS IN THE CASE OF OTHER ASSESSEE WITHOUT JUST CAUSE. FOR THIS REASON, WE DECLINE TO CONSIDER THE CORRECTNESS OF THE DECISION OF THE HIG H COURT IN THIS MATTER AND DISMISS THE CIVIL APPEAL . 8.4 WE ALSO DRAW SUPPORT AND GUIDANCE FROM THE JUDG MENT OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. SHIVSAGAR ESTA TE REPORTED IN 257 ITR 59 WHEREIN, IT WAS HELD AS UNDER: HAVING REGARD TO THE FACT THAT NO APPEAL HAD BEEN CARRIED AGAINST THE ORDERS OF IDENTICAL ASSESSMENTS FOR PREVIOUS YEAR, THE CIVIL APPEALS AND THE SPECIAL LEAVE PETITIONS PREPARED BY THE DEPARTM ENT WERE TO BE DISMISSED. 8.5 AFTER HAVING REGARD TO THE FACTS IN TOTALITY WE ARE OF THE VIEW THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S 10B OF T HE ACT AS THE SAME WAS ALLOWED BY THE AO IN OTHER YEARS AS WELL AS BY THE LD CIT(A) AS DISCUSSED ABOVE. THUS, WE FIND NO REASON TO INTERFE RE IN THE ORDER OF LD CIT(A). HENCE, THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. ITA NO.1625/AHD/2016 DCIT VS. M/S. HITECH INFOSOFT ASST.YEAR 2007-08 - 13 - 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. THIS ORDER PRONOUNCED IN OPEN COURT ON 03/10/2018 \ SD/- SD/- E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LNL; L; L; L; (MADHUMITA ROY) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 03/10/2018 PRITI YADAV, SR.PS !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / CONCERNED CIT 4. ) () / THE CIT(A)-3, AHMEDABAD. 5. ,-. //'( , '(# , 12$&$ / DR, ITAT, AHMEDABAD. 6. .34 5 / GUARD FILE. % & / BY ORDER, , / //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD