DCIT, Coimbatore V. 365 Media Private Limited, Coimbatore

ITA 310/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96263 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2015
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 14-10-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 05-02-2015
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: D ANANAD
• Keywords: Opportunity of being heard; Revised return
• Section: 143(3); 10B; 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI , . ! '# , $ %& ' [ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ] ./ I.T.A.NO.310/MDS/2015 / ASSESSMENT YEAR : 2011-12 THE DY. COMMISSIONER OF INCOME-TAX CORPORATE CIRCLE-I COIMBATORE VS. M/S 365 MEDIA PVT. LTD NO.1168, 3 RD & 4 TH FLOOR SAMSURIYA TOWERS, AVINASHI ROAD COIMBATORE 641 037 [PAN AAACZ 2346 P ] ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : SHRI A.V. SREEKANTH, JCIT /RESPONDENT BY : SHRI D. ANANAD, ADVOCATE / DATE OF HEARING : 14 - 10 - 2015 / DATE OF PRONOUNCEMENT : 16 - 10 - 2015 , / O R D E R PER BENCH THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, COIMBA TORE, DATED 27.11.2014 FOR ASSESSMENT YEAR 2011-12. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUND: 02. WITH REGARD TO ALLOWANCE OF DEDUCTION U/S 10 A, THE CIT(A)-I ERRED IN DECIDING THE ISSUE AS HE FAILED T O CONSIDER THE PRINCIPLES LAID DOWN BY THE HON'BLE SUPREME COU RT IN THE ITA NO.310/15 :- 2 -: CASE OF M/S GOETZ (INDIA) PVT. LTD VS CIT CITED IN 284 ITR 323. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE CLAIMED D EDUCTION UNDER SECTION 10B OF THE ACT BEFORE THE ASSESSING O FFICER. THE SAME WAS REJECTED BY THE ASSESSING OFFICER BY PLACING RE LIANCE ON THE JUDGMENT OF THE DELHI HIGH COURT IN THE CASE OF CIT VS REGENCY CREATIONS LTD , 353 ITR 326, WHEREIN IT WAS HELD TH AT INTER-MINISTERIAL STANDING COMMITTEE SET UP FOR GRANTING LICENCES UND ER STP SCHEME IS ALSO APPOINTED BY THE CENTRAL GOVERNMENT IN EXERCIS E OF POWERS CONFERRED UNDER SECTION 14 OF IDAR ACT. HOWEVER, T HE QUESTION IS WHETHER THAT PART OF THE BOARDS FUNCTION (UNDER SE CTION 14 OF IDAR ACT) TO GRANT APPROVAL UNDER SECTION 10B ALSO STAND S DELEGATED. ACCORDING TO THE ASSESSING OFFICER, UNLESS THERE IS EXPRESS AUTHORIZATION, IN TERMS OF A STATUTE, AND AN ACTUAL DELEGATION OF POWER, A STATUTORY AUTHORITY IN WHOM JURISDICTION OR POWER IS REPOSED, IS ALONE VESTED WITH IT, TO THE EXCLUSION OF OTHER. ACCORDI NG TO THE ASSESSING OFFICER, THE APPROVAL OF THE DIRECTOR OF STPI IS NO T ENOUGH FOR CLAIMING EXEMPTION U/S 10B OF THE ACT. ACCORDINGLY, HE REJ ECTED THE EXEMPTION U/S 10B OF THE ACT TO THE ASSESSEE. 4. ON APPEAL, THE CIT(A) REJECTED DEDUCTION U/S 10B O F THE ACT AND HOWEVER, HE OBSERVED THAT THE ASSESSEE IS ELIG IBLE FOR DEDUCTION U/S 10A OF THE ACT OF ` 96,62,878/- AND FURTHER DIRECTED THE ASSESSING ITA NO.310/15 :- 3 -: OFFICER TO VERIFY ALL THE DETAILS AND GRANT DEDUCTI ON U/S 10A OF THE ACT AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE US. 5. THE LD. DR SUBMITTED THAT THE ASSESSEE HAS NOT COM PLIED WITH THE REQUIREMENT OF SEC. 10B OF THE ACT AND THE REFORE, THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION U/S 10B. T HE ASSESSEES CLAIM OF DEDUCTION U/S 10A WAS NOT EXAMINED BY THE ASSES SING OFFICER AND THE CIT(A) HAS OBSERVED THAT THE ASSESSEE IS ELIGI BLE FOR DEDUCTION U/S 10A AND DIRECTED THE ASSESSING OFFICER TO VERIF Y ALL THE DETAILS AND GRANT DEDUCTION U/S 10A OF THE ACT. THIS FINDING IS CONTRARY TO EACH OTHER. HENCE, THE ENTIRE ISSUE MAY BE REMITTED BAC K TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION. 6. ON THE OTHER HAND, THE LD. COUNSEL SUBMITTED THAT T HE ASSESSEE IS DULY REGISTERED WITH DIRECTOR, STPI AND IT IS TO BE CONSIDERED AS SUFFICIENT COMPLIANCE WITH THE REQUIR EMENT OF SEC. 10A(2)(I)(B) OF THE ACT AS PER THE CBDT VIDE INSTRU CTION NO.1 OF 2006 DATED 31.3.2006. FURTHER, THE ASSESSEE HAS COMPLI ED WITH ALL THE REQUIREMENTS IE. FILING OF FORM 56F ALONGWITH RELEV ANT DETAILS FOR ALTERNATE CLAIM OF DEDUCTION U/S 10A OF THE ACT AN D THEREFORE, THE ASSESSEE SHOULD BE GRANTED DEDUCTION U/S 10A. HE ALSO RELIED ON THE FOLLOWING JUDGMENTS: ITA NO.310/15 :- 4 -: (I) CIT VS VALIANT COMMUNICATIONS LTD IN I.T.A.NO. 2002 OF 2010(DEL) (II) ITO VS INFOTECH PARK IN I.T.A.NOS.150 & 152/NAG/2011 DATED 6.2.2013 (III) CIT VS M/S HEARTLAND KG INFORMATION LTD, 359 ITR 1 (MAD) (IV) DCIT VS M/S VARSUN EXPENDITURE TECHNOLOGIES P. LTD IN I.T.A.NO. 688/HYD/2013 DATED 13.8.2013 (V) CLOUD SOFTECH INDIA P LTD VS ITO IN I.T.A.NO. 483/HYD/2013 DATED 13.9.2013 (VI) FAST BOOKING (I) PVT. LTD VS DCIT IN I.T.A.NO.334/1 5 & OTHERS DATED 2.9.2015 (DELHI HIGH COURT) HE FURTHER SUBMITTED THAT THE DECISION OF THIS TRIB UNAL IN THE CASE OF M/S TRIMENTUS TECHNOLOGIES P. LTD VS ACIT IN .T.A.N O.1651/MDS/2014, ORDER DATED 19.6.2015, CANNOT BE APPLIED TO THE FAC TS OF THE PRESENT CASE. IN THAT CASE, THE ASSESSEES CLAIM WAS REJE CTED ON THE REASON THAT THE ASSESSEE WAS NOT ABLE TO SATISFY ALL THE CONDITIONS LAID DOWN U/S 10A OF THE ACT. IN THE PRESENT CASE, THERE IS NO DISPUTE REGARDING APPROVAL OF THE ASSESSEE BY THE DIRECTOR, STPI. A S SUCH, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 10A OF THE ACT. 7. WE HAVE HEARD BOTH PARTIES AND PERUSED THE MATERIA L ON RECORD. IN THIS CASE, THERE IS NO DISPUTE THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 10B OF THE ACT. THE PL EA OF THE ASSESSEE IS ONLY THAT IT IS ENTITLED FOR DEDUCTION U/S 10A OF T HE ACT. IF THE ASSESSEE HAS COMPLIED WITH ALL THE CONDITIONS LAID DOWN U/S 10A OF THE ACT AFTER DULY REGISTERING WITH DIRECTOR, STPI, ITS CLAIM U/S 10A IS TO BE EXAMINED PROPERLY. HOWEVER, THE CIT(A), AFTER OBSE RVING THAT THE ITA NO.310/15 :- 5 -: ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 10A OF THE ACT, HE REMITTED THE ISSUE TO THE ASSESSING OFFICER WITH A DIRECTION TO VERIFY ALL THE DETAILS AND GRANT DEDUCTION U/S 10A OF THE ACT. THIS DIRE CTION OF THE CIT(A) IS MISCONCEIVED AND AS SUCH, WE VACATE THE SAME AND RE MIT THE ENTIRE ISSUE OF DEDUCTION U/S 10A OF THE ACT TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION IN THE LIGHT OF THE DECISION OF THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF VNS MAKRO TECHNOLOGIES PVT. LTD VS DCIT IN I.T.A.NO. 577/HYD/ 2012, ORDER DATED 8.6.2012, AFTER GIVING ADEQUATE OPPORTUNITY OF HEAR ING TO THE ASSESSEE. IN THE ABOVECITED CASE, THE TRIBUNAL HAS HELD AS UNDER: 7. WE HAVE HEARD RIVAL CONTENTIONS OF THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS APPARENT F ROM THE ORDER OF THE CIT (A) THAT THE REASON BEHIND DISALLOWANCE OF CLAIM MADE BY THE ASSESSEE SINCE THE ASSESSEE HAS NOT CLAIMED DEDUCTION U/S 10A IN THE RETURN FILED U/S 139(1), THE PROVISO TO SECTION 10A DEBARS HIM FROM MAKING ANY SUCH CLAIM IN REVISED RE TURN. AT THIS STAGE, IT WILL BE RELEVANT TO TAKE NOTE OF THE PROV ISO UNDER SECTION 10A WHICH IS EXTRACTED HEREUNDER:- 'PROVIDED THAT NO DEDUCTION UNDER THIS SECTION SHAL L BE ALLOWED TO AN ASSESSEE WHO DOES NOT FURNISH A RETUR N OF HIS INCOME ON OR BEFORE THE DUE DATE SPECIFIED UNDE R SUBSECTION (1) OF SECTION 139.' 8. A READING OF THE AFORESAID PROVISO MAKES IT CLEA R THAT REQUIREMENT FOR CLAIMING DEDUCTION U/S 10A OF THE ACT, FILING OF A RETURN OF INCOME ON OR BEFORE THE DUE DATE SPECIFIED UNDER SUBSECTIO N (1) OF SECTION 139. IN THE PRESENT CASE, THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE HAS FILED A RETURN OF INCOME U/S 139(1) WI THIN THE DUE DATE CLAIMING DEDUCTION U/S 10B. THEREFORE, THE REASONIN G OF THE CIT (A) THAT THE PROVISO TO SECTION 10A OPERATES AS A BAR I N ALLOWING DEDUCTION CLAIMED IN THE REVISED RETURN IS NOT A C ORRECT INTERPRETATION. IT IS A FACT ON RECORD THAT THE ASSESSEE UP TO THE ASSESSMENT YEAR 2006-07 WAS CLAIMING DEDUCTION U/S 10B AND THE DEPARTMENT WAS ALLOWING THE SAME EVEN UNDER SCRUTINY ASSESSME NTS. IT WAS ONLY IN THE ASSESSMENT YEAR 2006-07 AFTER THE CIT SET AS IDE THE ORDER PASSED U/S 143(3) DIRECTING THE AO TO DISALLOW THE CLAIM OF DEDUCTION U/S 10B THAT THE ASSESSEE IS CLAIMING DEDUCTION U/S 10A ITA NO.310/15 :- 6 -: OF THE ACT. IT IS ALSO A FACT THAT THE ITAT IN ASSE SSEES OWN CASE FOR ASSESSMENT YEAR 2006-07 DIRECTED THE AO TO CONSIDER THE ASSESSEES CLAIM FOR DEDUCTION U/S 10A BY OBSERVING IN FOLLOWI NG MANNER:- 'WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PERU SED THE ORDER OF THE CIT PASSED U/S 263 OF THE ACT. WE FIND THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S 10B OF THE A CT, WHICH WAS ALLOWED BY THE ASSESSING OFFICER WITHOUT MAKING FURTHER ENQUIRIES WITH REGARD TO ALLOWABILITY THEREOF ACCORDINGLY, THE ORDER OF THE ASSESSING OFFICER COULD BE INTERFERED WITH BY THE CIT U/S 263 OF THE ACT. HOWEVER, THE CLT SHOULD HAVE REMANDED THE MATTER TO THE FILE OF THE ASSESSING OFFICER WIT H A DIRECTION TO CONSIDER THE CLAIM OF THE ASSESSEE THAT THERE WAS N O DIFFERENCE BETWEEN S. 10A AND S. 10B AND THE DEDUCTION U/S 10A WAS ALLOWABLE TO THE ASSESSEE ON THE BASIS OF THE MATER IAL AVAILABLE ON RECORD. IN THESE FACTS OF T HE CASE WE HOLD THAT IT BE JUSTIFIED TO MODIFY THE ORDER OF THE CIT PASSED ULS 263 TO THE EFFECT THAT THE ASSESSMENT IS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO REFRAME THE ASSESSMENT DE NOVO IN ACCORDANCE WITH LAW AND TO ADJUDICATE THE ISSUE OF DEDUCTION ALLOWABLE TO THE ASSESSEE, AFTER PROVIDING REASONAB LE OPPORTUNITY OF HEARING TO THE ASSESSEE AND THE ASSESSEE SHALL BE AT LIBERTY TO CLAIM DEDUCTION UNDER SOME OTHER P ROVISION OF LAW, WHICH SHALL BE DECIDED BY THE ASSESSING OFFICE R ON MERITS THEREOF WE DIRECT ACCORDINGLY. ' FOR THE ASSESSMENT YEARS 2007-08 ALSO THE ITAT DIRE CTED THE AO TO CONSIDER THE ASSESSEES CLAIM U/S 10A BY OBSERVING I N THE FOLLOWING MANNER:- '10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIA LS AVAILABLE ON RECORD. THE CONTENTION OF THE ASSESSEE S COUNSEL IS THAT THE ASSESSEE IS 100% EOU ENTITLED FOR EXEMPTION ULS 10A AND WRONGLY CLAIMED THE DEDUCTION U/S 10B AND IT WA S A TECHNICAL MISTAKE IN CLAIMING DEDUCTION U/S 10B. TH E ASSESSEES COUNSEL FURTHER ARGUED THAT THE ASSESSEE HAS FULFILLED ALL THE REQUIREMENTS OF PROVISIONS OF SEC TION 10A. HOWEVER, THIS, CLAIM OF THE ASSESSEE NOT EXAMINED B Y THE LOWER AUTHORITIES AND THEY STICK TO ONE CONTENTION THAT THE ASSESSEE CLAIM ULS 10B IS NOT ALLOWABLE. WE ARE AGREEING WITH THE DEPARTMENT THAT THD CONDITION FOR ALLOWANCE OF DEDUCTION ULS 10A AND 10B ARE STOOD ON DIFFERENT FOOTING. HOWEVER , THE DEPARTMENT CANNOT THRUST. UPON THE ASSESSEE TO AVAI L DEDUCTION ULS 10B ONLY. IF THE ASSESSEE ENTITLED FO R DEDUCTION ULS 10A INSTEAD OF 10B THAT CLAIM REQUIRED TO BE EX AMINED BY THE ASSESSING OFFICER IN ALL FAIRNESS. THE LSSUE OF ALLOWANCE OF DEDUCTION ULS 10A THOUGH ASSESSEE MADE A CLAIM BEFORE THE LOWER AUTHORITIES HAS NOT EXAMINED BY THE ASSESSING OFFICER. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT IT SHALL BE IN THE INTEREST OF JUSTICE TO SETASIDE THE ISSUE IN THE GROUNDS OF APPEAL OF THE ASSESSEE TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE ISSUE ITA NO.310/15 :- 7 -: IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE O PPORTUNITY TO THE ASSESSEE, AND ALSO TO GIVE A SPECIFIC FINDING WHETHER THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 10A OF THE ACT OR NOT. THE ASSESSEE MAY FILE ANY EVIDENCE IN SUPPORT OF IT S CLAIM FOR DEDUCTION BEFORE THE ASSESSING OFFICER. WE MAKE IT CLEAR THAT OUR OBSERVATIONS HEREIN ABOVE SHALL NOT HAVE A NY BEARING ON THE DECISION OF THE ASSESSING OFFICER WI TH REGARD TO THE MERITS OF THE CLAIM OF THE ASSESSEE FOR DEDU CTION U/S 10A OF THE ACT. WE DIRECT ACCORDINGLY. ' THEREFORE, KEEPING IN VIEW THE ORDERS OF THE ITAT F OR THE EARLIER ASSESSMENT YEARS 2006-07 AND 2007-08, DIRECTING THE AO TO CONSIDER ASSESSEES CLAIM FOR DEDUCTION U/S 10A WE T HINK IT PROPER TO RESTORE THE MATTER BACK TO THE FILE OF THE AO DI RECTING HIM TO CONSIDER ASSESSEES CLAIM OF DEDUCTION U/S 10A AFTER EXAMINING THE MATERIALS AVAILABLE BEFORE HIM AND ALLOW SUCH D EDUCTION IF THE ASSESSEE IS LEGALLY ENTITLED TO. THE AO SHALL AFFOR D A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE A SSESSMENT ORDER IS PASSED. 8. WITH THE ABOVE OBSERVATION, THE APPEAL OF THE RE VENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH OCTOBER, 2015, AT CHENNAI. SD/- SD/- ( . ! '# ) ( V. DURGA RAO ) $ / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER !' / CHENNAI #$ / DATED: 16 TH OCTOBER, 2015 RD $%&& '(&)( / COPY TO: & 1 . / APPELLANT 4. & * / CIT 2. / RESPONDENT 5. (+,& - / DR 3. & *&./ / CIT(A) 6. ,0&1 / GF