ITO, Bangalore V. M/s CKS Consulting Pvt. Ltd., Bangalore

ITA 28/BANG/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9448 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 14-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 08-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: JAYNA KOTHARI
• Keywords: Rule of consistency
• Section: 10B

Judgement Text

ITA.28/BANG/2013 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'B', BANGALORE SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBER I.T.A NO.28/BANG/2013 (ASSESSMENT YEAR : 2009-10) INCOME-TAX OFFICER, WARD -1 (1), BENGALURU .. APPELLANT V. M/S. C K S CONSULTING P. LTD, CKS HOUSE, 100 FT ROAD INDIRANAGAR, BENGALURU 560 038 .. RESPONDENT PAN : AACCC3124A ASSESSEE BY : SMT. JAYNA KOTHARI, ADVOCATE REVENUE BY : SMT. SWAPNA DAS, JCIT HEARD ON : 21.06.2016 PRONOUNCED ON : 26.08.2016 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY REVENUE ITS GRIEVANCE IS TH AT ASESSEE WAS HELD AS ELIGIBLE FOR DEDUCTION U/S.10B OF THE INCOME-TAX AC T, 1961 (THE ACT IN SHORT). 02. FACTS APROPOS ARE THAT ASSESSEE A 100% EOU ENG AGED IN SOFTWARE DEVELOPMENT HAD CLAIMED DEDUCTION OF RS.44,03,765/- U/S.10B OF THE ACT. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED T HAT ASSESSEE HAD NOT ITA.28/BANG/2013 PAGE - 2 RECEIVED STATUTORY APPROVAL BY THE BOARD AS A 100 P ERCENT EOU, WHICH WAS ESSENTIAL FOR CLAIMING DEDUCTION U/S.10B OF THE ACT. WHEN THIS WAS PUT TO THE NOTICE OF THE ASSESSEE, ITS REPLY WAS THAT THE CENTRAL GOVERNMENT U/S.14 OF THE INDUSTRIES (DEVELOPMENT AND REGULATIONS) ACT, 1951, HAD DELEGATED THE POWERS TO THE DIRECTOR OF STPI BY VIRTUE OF NOTIFIC ATION NO.SO388 (E), DT.30.04.1995. AS PER THE ASSESSEE POWER OF THE AP PROVAL WAS DELEGATED TO THE COMMISSIONERS AND THIS WAS ALSO ACCEPTED BY CBDT BY VIRTUE OF CIRCULAR F. NO.178/19/2008 ITA -I, DT.09.03.2009. HOWEVER, TH E AO WAS NOT IMPRESSED. ACCORDING TO HIM STATUTORY APPROVAL FROM THE BOARD WAS REQUIRED FOR CLAIMING DEDUCTION U/S.10B OF THE ACT. RELYING ON THE DECISI ON OF HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF INFOTECH ENTERPRISES LT D V. JCIT [(2003) 85 ITD 325], THE CLAIM WAS DENIED. 03. IN ITS APPEAL BEFORE CIT (A), ARGUMENT OF THE A SSESSEE WAS THAT IT WAS AN APPROVED 100% EOU OF STPI WHICH FELL UNDER MINISTRY OF INFORMATION AND TECHNOLOGY. AS PER THE ASSESSEE, APPROVAL U/S.14 OF IDR ACT, 1951, WAS DELEGATED TO INTERMINISTERIAL STANDING COMMITTEES A ND NOTIFICATION DT.30.04.1995 WHICH DELEGATED SUCH POWERS CLEARLY S TATED THAT THE WORD STP WOULD BE SUBSTITUTED FOR EOU / EPZ. ASSESSEE ALSO B ROUGHT TO THE NOTICE OF ITA.28/BANG/2013 PAGE - 3 CIT (A) A DECISION OF CHANDIGARH BENCH OF THE TRIBU NAL IN THE CASE OF BEBO TECHNOLOGIES P. LTD V.JCIT [(2011) 57 DTR 402]. REL IANCE WAS ALSO PLACED ON JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. ENABLE EXPORTS P. LTD [(2012) 217 TAXMANN 182] CIT (A) WAS APPRECIA TIVE OF THESE CONTENTIONS. ACCORDING TO HIM, THOUGH THE DECISION OF HYDERABAD BENCH IN THE CASE OF INFOTECH P. LTD (SUPRA) WAS AGAINST THE ASSESSEE, C HANDIGARH BENCH IN THE CASE OF BEBO TECHNOLOGIES P. LTD (SUPRA) AS WELL AS THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF M/S. VALLENT COMMUNICATION LTD V. DC IT [ITA.2706/DEL/2008, DT.23.04.2010] HAD HELD IN FAVOUR OF THE ASSESSEE. FURTHER ACCORDING TO HIM ASSESSEE WAS CLAIMING SUCH EXEMPTION SINCE LAST EIG HT YEARS BASED ON THE DIRECTION GIVEN BY THE DIRECTOR OF STPI. HE THUS HE LD THAT ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S.10B OF THE ACT. 04. NOW BEFORE US, LD. DR STRONGLY ASSAILING THE OR DER OF CIT (A) SUBMITTED THAT HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. REGENCY CREATIONS LTD [(2013) 353 ITR 326 HAD HELD THAT THERE WAS A DELIB ERATE SEGREGATION MADE BY THE LEGISLATURE BETWEEN THE BENEFITS GIVEN TO AN AS SESSEE BETWEEN SECTIONS 10A AND 10B OF THE ACT. AS PER THE LD. DR, THEIR LORDS HIP HELD THAT FOR QUALIFYING FOR THE BENEFITS UNDER SECTION 10B OF THE ACT, THE PROCEDURE LAID DOWN ENACTED IN THE SAID SECTION HAD TO BE FOLLOWED. THUS AS PER TH E LD. DR, A 100% EOU SET UP ITA.28/BANG/2013 PAGE - 4 UNDER THE STPI SCHEME COULD NOT BE DEEMED AS AN APP ROVAL FOR GIVING BENEFIT U/S.10B OF THE ACT. 05. PER CONTRA, LD. AR SUBMITTED THAT THE VERY SAME HONBLE DELHI HIGH COURT IN THE CASE OF ENABLE EXPORTS (SUPRA), AS WEL L AS THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V. EXCEL SO FTTECH LTD [(2003) 13 DTR 201] HAD HELD THAT APPROVALS GIVEN BY DEVELOPME NT COMMISSIONER WAS GOOD ENOUGH FOR A CLAIM U/S.10B OF THE ACT. ACC ORDING TO HER, UNLESS AND UNTIL THERE WAS A JURISDICTIONAL HIGH COURT DEC ISION AGAINST ASSESSEE, JUDGMENT IN FAVOUR OF THE ASSESSEE HAD TO BE FOLLOW ED. 06. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONTENTIONS. IN THE FIRST PLACE WHAT WE FIND IS THAT ASSESSEE WAS CLAIMING DE DUCTION U/S.10B FOR A PERIOD OF EIGHT YEARS AND THIS FINDING OF THE CIT ( A) HAS NOT BEEN DISPUTED BY THE LD. DR BEFORE US. RULE OF CONSISTENCY REQUIR ES THAT A DEDUCTION GIVEN TO AN ASSESSEE UNDER A PARTICULAR SECTION OUG HT NOT BE DENIED IN LATER YEARS WHEN THE FACT-SITUATION REMAINED THE SAME. IT CANNOT BE PRESUMED THAT IN THE EARLIER YEARS SUCH ALLOWANCE WAS GIVEN BY THE AO WITHOUT CONSIDERING THE PROVISIONS OF LAW. THUS THE AO HAD ALREADY TAKEN A VIEW IN THE EARLIER YEARS THAT ASSESSEE WAS ELIGIBLE FOR DE DUCTION U/S.10B OF THE ACT BASED ON THE APPROVAL GIVEN TO IT BY THE DIRECTOR O F STPI. A VIEW TAKEN BY ITA.28/BANG/2013 PAGE - 5 THE REVENUE, WHICH PERMEATES THROUGH A NUMBER A NUM BER OF YEARS OUGHT NOT HAVE BEEN DISTURBED IN THE IMPUGNED ASSESSMENT YEAR CITING A REASON THAT APPROVAL OF STPI WAS INSUFFICIENT FOR GIVING R ELIEF U/S.10B OF THE ACT. IN ANY CASE, I FIND THAT HONBLE DELHI HIGH COURT I N THE CASE OF ENABLE EXPORTS P. LTD (SUPRA) HAD TAKEN A VIEW IN FAVOUR O F THE ASSESSEE, THOUGH THE JUDGMENT OF THE VERY SAME COURT IN REGENCY CREA TIONS (SUPRA) WENT AGAINST THE ASSESSEE. ASSESSEES CASE IS ALSO FOR TIFIED BY THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF PR. CIT V . ECI TECHNOLOGIES P. LTD [(2015) 375 ITR 595]. IN THE CIRCUMSTANCES OF T HE CASE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF CIT (A). 07. IN THE RESULT APPEAL OF THE REVENUE STANDS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH DAY OF AUGUST, 2016. SD/- (ABRAHAM P GEORGE) ACCOUNTANT MEMBER MCN COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR ITA.28/BANG/2013 PAGE - 6 6. GF, ITAT, BANGALORE BY ORDER ASSISTANT REGISTRAR