Trimentus Technologies P Ltd., CHENNAI V. ACIT, CHENNAI

ITA 1651/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90487 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 11-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 11-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: R VISWANATHAN
• Section: 10B; 6; 10

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , . # , $ & BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI V.DURGA RAO, JUDICIAL MEMBER ./ I.T.A.NO . 1651/MDS/2014 ( / ASSESSMENT YEAR: 2009-10) M/S. TRIMENTUS TECHNOLOGIES P.LTD. SUCONS SIVAGAMI SQUARE, 3 RD FLOOR, 147, G.N.CHETTY ROAD, T.NAGAR, CHENNAI - 600 0 17. VS ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-III(2), CHENNAI - 34 . PAN:AABCT8196N ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR.R.VISWANATHAN, C.A. /RESPONDENT BY : MR. A.V.SREEKANTH, JCIT /DATE OF HEARING : 11 TH JUNE, 2015 /DATE OF PRONOUNCEMENT : 19 TH JUNE, 2015 / O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I II, CHENNAI DATED 21.01.2014. THE GRIEVANCE OF THE AS SESSEE IS FOR NOT GRANTING ALTERNATIVE CLAIM OF DEDUCTION UNDER SECTION 10A INSTEAD OF SECTION 10B OF THE ACT. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE CLAIME D DEDUCTION UNDER SECTION 10B OF THE ACT BEFORE THE A SSESSING OFFICER. THE SAME WAS REJECTED BY THE ASSESSING OFF ICER BY OBSERVING THAT ASSESSEE HAS NOT FURNISHED ANY APPRO VAL 2 ITA NO.1651 /MDS/2014 ACCORDED BY SOFTWARE TECHNOLOGY PARKS OF INDIA AS W ELL AS RATIFICATION ACCORDED BY BOARD OF APPROVAL APPOINTE D IN THIS BEHALF BY THE CENTRAL GOVERNMENT. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) PLACED RELIANC E ON THE JUDGEMENT OF DELHI HIGH COURT IN THE CASE OF CI T VS. REGENCY CREATIONS LTD. (353 ITR 326), WHEREIN IT I S HELD THAT UNLESS THERE IS EXPRESS AUTHORIZATION IN TERMS OF S TATUTE AND AN ACTUAL DELEGATION OF POWER, A STATUTORY AUTHORIT Y IN WHOM JURISDICTION OR POWER IS REPOSED, IS ALONE VESTED W ITH IT, TO THE EXCLUSION OF OTHERS. ACCORDING TO THE COMMISSIONER OF INCOME TAX (APPEALS), IT IS ESTABLISHED NO NOTIFIC ATION OR OFFICIAL DOCUMENT ISSUED BY THE BOARD SUGGESTING TH AT EITHER THE INTER-MINISTERIAL COMMITTEE OR ANY OTHER OFFICE R OR AGENCY WAS NOMINATED TO PERFORM THE DUTIES OF THE BOARD CO NSTITUTED UNDER SECTION 14 OF THE I.D. ACT FOR THE PURPOSE OF APPROVAL UNDER SECTION 10B OF THE ACT. THOUGH THE CONSIDERAT IONS WHICH APPLY FOR GRANTING APPROVAL UNDER SECTIONS 10 A AND 10B MAY TO AN EXTENT OVERLAP, YET THE DELIBERATE SE GREGATION OF THESE TWO BENEFITS BY THE STATUTE REFLECTS PARLI AMENTARY INTENTION THAT TO QUALIFY FOR BENEFIT UNDER EITHER THE SPECIFIC PROCEDURE ENACTED FOR THAT PURPOSE HAS TO BE FOLLOW ED. THUS, 3 ITA NO.1651 /MDS/2014 THE COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT IN THE ABSENCE OF APPROVAL FROM STPI, BENEFIT UNDER SECTIO N 10B OF THE ACT CANNOT BE GRANTED TO THE ASSESSEE. THE AS SESSEE MADE AN ALTERNATIVE CLAIM UNDER SECTION 10A OF THE ACT, WHICH WAS ALSO REJECTED BY THE COMMISSIONER OF INCO ME TAX (APPEALS), AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE US. 3. LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE SUBMITS THAT ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT DENIED EXEMPTION UNDER SECTION 10B OF TH E ACT AMOUNTING TO ` 1,02,38,384/-, THOUGH THE ASSESSEE IS A 100% EOU REGISTERED WITH STPI, CHENNAI. HE SUBMITS THAT ASSESSING OFFICER WAS OF THE VIEW THAT STPI IS NOT THE APPROVED AUTHORITY TO GIVE 100% EOU STATUS IN TERMS OF EXPLANATION 2(IV) TO SECTION 10B AND THUS DENIED EX EMPTION UNDER SECTION 10B OF THE ACT. THE LEARNED AUTHORIZE D REPRESENTATIVE PLACED RELIANCE ON THE FOLLOWING JUD GEMENTS IN SUPPORT OF HIS CONTENTIONS:- I) CIT VS. VALIANT COMMUNICATIONS LTD. IN ITA NO.2002 OF 2010(DEL) 4 ITA NO.1651 /MDS/2014 II) ITO VS. INFOTECH PARK IN ITA NOS.150 & 152/NAG/2011 DATED 6.2.2013 III) CIT VS. M/S. HEARTLAND KG INFORMATION LTD. (35 9 ITR 1) (MAD) IV) DCIT VS. M/S. VARSUN E TECHNOLOGIES P.LTD., IN ITA NO.688/HYD/2013 DATED 13.08.2013 V) CLOUD SOFTECH INDIA P.LTD. VS. ITO IN ITA NO.483/HYD/2013 DATED 13.09.2013 4. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF LOWER AUTHOR ITIES. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED MATER IALS ON RECORD AND DECISIONS RELIED ON. IN THIS CASE, A DMITTEDLY THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION UNDER SE CTION 10B OF THE ACT ON THE FACT THAT ASSESSEE HAS NOT FILED APPROVAL ACCORDED BY THE SOFTWARE TECHNOLOGY PARKS OF INDIA AS WELL AS THE RATIFICATION ACCORDED BY BOARD OF APPROVAL A PPOINTED IN THIS BEHALF BY THE CENTRAL GOVERNMENT. ALTERNATIVEL Y, THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 10A OF THE ACT. ACCORDING TO THE ASSESSEE, ALL THE CONDITIONS LAID DOWN UNDER 5 ITA NO.1651 /MDS/2014 SECTION 10A OF THE ACT WERE COMPLIED WITH BY THE AS SESSEE. HOWEVER, THE ASSESSEE HAS NOT DEMONSTRATED AS TO HO W THE ASSESSEE HAS COMPLIED WITH THE CONDITIONS LAID DOWN UNDER SECTION 10A OF THE ACT. CONTRARY TO THIS, ASSESSEE PLACED RELIANCE ON VARIOUS DECISIONS CITED SUPRA. IN OUR O PINION, THE ABOVE DECISIONS OF THE TRIBUNAL WERE DELIVERED WITH OUT CONSIDERING THE DECISION OF DELHI HIGH COURT IN THE CASE OF CIT VS. REGENCY CREATIONS LTD. (353 ITR 326). IN VI EW OF THIS, WE ARE NOT INCLINED TO FOLLOW THE EARLIER DEC ISIONS OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL. 6. FURTHER, THE ASSESSEE PLACED RELIANCE ON THE JUDGEMENT OF THE DELHI HIGH COURT IN THE CASE OF CI T VS. VALIANT COMMUNICATIONS LTD. IN ITA NO.202 OF 2010 DATED 4 TH JANUARY, 2013. IN THAT CASE, THE HIGH COURT REMITT ED THE MATTER BACK TO THE TRIBUNAL ON THE REASON THAT COMM ISSIONER OF INCOME TAX (APPEALS) AS WELL AS THE TRIBUNAL HAV E NOT GONE INTO MERIT OF ALTERNATIVE CLAIM MADE UNDER SEC TION 10A OF THE ACT. HOWEVER, IN THE PRESENT CASE, COMMISSIO NER OF INCOME TAX (APPEALS) CONSIDERED THE ALTERNATIVE CLA IM OF THE ASSESSEE MADE UNDER SECTION 10A AND REJECTED THE SA ME, AS 6 ITA NO.1651 /MDS/2014 THE ASSESSEE FAILED TO SUBSTANTIATE THE CLAIM. FUR THER, THE ASSESSEE PLACED RELIANCE ON THE JUDGEMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. M/ S. HEARTLAND KG INFORMATION LTD. (359 ITR 1), WHEREIN THE HIGH COURT HELD THAT IF THE CLAIM COULD BE FAVOURABLY CONSIDERED U NDER ANY OF THOSE SPECIAL DEDUCTION PROVISIONS AND ON THE CONDI TIONS SPECIFIED THEREIN BEING SATISFIED, THE ASSESSEE CAN NOT BE DISENTITLED FROM CLAIMING THE BENEFIT THAT ASSESSEE HAS NOT REFERRED TO THE SECTION CORRECTLY. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT ASSESSEE HAS BEEN CLAIMING DEDUC TION UNDER SECTION 10B OF THE ACT IN EARLIER PREVIOUS YE ARS AND IN THE ASSESSMENT YEAR UNDER CONSIDERATION ALSO THE AS SESSEE MADE CLAIM UNDER SECTION 10B AND WHICH WAS DENIED B Y THE DEPARTMENT FOR THE ASSESSMENT YEAR UNDER CONSIDERAT ION. CONSEQUENT TO REJECTION OF CLAIM UNDER SECTION 10B, ASSESSEE MADE ALTERNATIVE PLEA FOR DEDUCTION UNDER SECTION 10A OF THE ACT. THE ASSESSEE IS NOT ABLE TO DEMONST RATE HOW THEY HAVE SATISFIED ALL THE CONDITIONS LAID DOWN UN DER SECTION 10A FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AN D AS TO WHY THE ASSESSEE HAS NOT BEEN CLAIMED DEDUCTION UND ER SECTION 10A IN EARLIER YEARS. THUS, THERE EXISTS NO JUSTIFICATION 7 ITA NO.1651 /MDS/2014 ON THE PART OF THE ASSESSEE TO CHANGE THE CLAIM OF DEDUCTION UNDER SECTION 10A INSTEAD OF DEDUCTION UNDER SECTIO N 10B OF THE ACT IN MIDDLE OF THE PERIOD OF TEN YEARS. WITH THESE OBSERVATIONS, WE ARE INCLINED TO DISMISS THE APPEAL OF THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH JUNE, 2015 SD/- SD/- ( . ) ( % ) ( V.DURGA RAO ) ( CHANDRA POOJARI ) ( ) / JUDICIAL MEMBER ) / ACCOUNTANT MEMBER ( /CHENNAI, + /DATED 19 TH JUNE, 2015 SOMU -. /. /COPY TO: 1. APPELLANT 2. RESPONDENT 3. 0 () /CIT(A) 4. 0 /CIT 5. . 4 /DR 6. /GF .