WNS GLOBAL SERVICES P.LTD, MUMBAI V. ITO RG 10(2)(4), MUMBAI

ITA 4520/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3855 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 11-01-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 06-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBACHAN RAM
• Assessee Lawyers: PUR US KAKA
• Keywords: Question of law; Wholly owned subsidiary; Revised return
• Section: 143(3); 80HHC; 10B; 263; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI BEFORE SHRI JASON P. BOAZ ACCOUNTANT MEMBER AND SHRI RAMLAL NEGI, JUDICIAL MEMBER ITA NO. 4520/MUM/2013 (ASSESSMENT YEAR : 2003-04) WNS GLOBAL SERVICES PVT. LTD., GATE NO.4, GODREJ BOYCE COMPLEX, S. PHIROJSHA NAGAR, VIKHROLI (WEST), MUMBAI 400 079 PAN:AAACW 2598L ... APPELLANT VS. INCOME TAX OFFICER, RANGE 10(2)(4), 4 TH FLOOR, AAYKAR BHAVAN, MK ROAD, MUMBAI 400 020 .... RESPONDENT APPELLANT BY : SHRI PUR US KAKA RESPONDENT BY : SHRI SUBAC HAN RAM DATE OF HEARING : 11/01/2016 DATE OF PRONOUNCEMENT : 17/02/2016 ORDER PER JASON P. BOAZ, A.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE CIT(APPEALS)-22, MUMBAI DATED 1/3/2013 FOR ASSESSME NT YEAR 2003-04. 2. THE FACTS OF THE CASE, BRIEFLY, ARE AS UNDER:- 2.1 THE ASSESSEE, A COMPANY ENGAGED IN PROVIDING I T ENABLED BPO SERVICES FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2003-04 01/12/2003 DECLARING INCOME OF RS.24,59,770/- AFTER CLAIMING 2 ITA NO. 4520/MUM/2013 (ASSESSMENT YEAR : 2003-04) DEDUCTION UNDER SECTION 10A OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT ) AMOUNTING TO RS.31,89,63,929/-. THE ASSESSE E, A PART OF THE WNS GROUP AND IN MAY 2002, WNS (MAURITIUS) LTD., A WHOL LY OWNED SUBSIDIARY OF WNS HOLDINGS ACQUIRED THE ENTIRE SHA RE CAPITAL OF THE ASSESSEE FROM M/S. BRITISH AIRWAYS. THE ASSESSEE C ARRIES OUT ITS BUSINESS FROM 4 SOFTWARE TECHNOLOGY PARKS THROUGH S EVEN UNITS LOCATED AT MUMBAI( 2 UNITS), PUNE (3 UNITS) AND NASIK (2 UN ITS). THE DEDUCTION UNDER SECTION 10A OF THE ACT WAS CLAIMED IN RESPECT OF MUMBAI UNIT-1 AND PUNE UNIT-1 ONLY. SUBSEQUENTLY, THE ASSESSEE F ILED A REVISED RETURN OF INCOME ON 23/03/2014 DECLARING TOTAL INCOME AT N IL AFTER SETTING OFF THE LOSS FROM PUNE UNIT-II AGAINST INCOME FROM MUMB AI UNIT-I AND PUNE UNIT-I AND CLAIMING DEDUCTION OF RS.31,89,63,929/- UNDER SECTION 10A OF THE ACT. THE ASSESSEE HAD ALSO PUT FORTH AN ALTE RNATE CLAIM THAT IT BE GRANTED DEDUCTION UNDER SECTION 80HHE OF THE ACT I N CASE THE CLAIM UNDER SECTION 10A OF THE ACT WAS NOT ALLOWED. THE CASE WAS TAKEN UP FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED UNDE R SECTION143(3) OF THE ACT VIDE ORDER DATED 17/3/2006 ALLOWING THE ASS ESSEE DEDUCTION CLAIMED UNDER SECTION 10A OF THE ACT. 2.2 SUBSEQUENTLY, THE CIT-10, MUMBAI IN EXERCISE OF REVISIONARY POWERS PASSED AN ORDER UNDER SECTION263 OF THE ACT DATED 20/11/2007, SET ASIDE THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION10A OF THE ACT AND DIRECTED THE ASSESSING OFFICER TO RE-EXAMINE T HE ASSESSEES CLAIM IN THE LIGHT OF THE PROVISIONS OF SECTION 10A(9) OF TH E ACT. IN THIS ORDER UNDER SECTION 263 OF THE ACT, THE CIT ALSO REJECTED THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION80HHE OF THE ACT. ON AP PEAL BY THE ASSESSEE, THE CO-ORDINATE BENCH OF THIS TRIBUNAL VIDE ORDER IN ITA 3 ITA NO. 4520/MUM/2013 (ASSESSMENT YEAR : 2003-04) NO.348/MUM/2008 DATED 17/6/2009 UPHELD THE ASSUMPTI ON OF JURISDICTION BY THE CIT(A) UNDER SECTION 263 OF THE ACT ON THE GROUND THAT THE ASSESSING OFFICER HAD NOT EXAMINED THE ASS ESSEES CLAIM FOR DEDUCTION UNDER SECTION10A OF THE ACT IN THE LIGHT OF THE PROVISIONS OF SECTION 10A(9) OF THE ACT FOR RE-EXAMINATION THEREO F. IN RESPECT OF THE CITS REJECTION OF THE ASSESSEES ALTERNATE CLAIM F OR DEDUCTION UNDER SECTION 80HHE OF THE ACT TO BE GRANTED, THE CO-ORDI NATE BENCH MODIFIED THE ORDER OF THE CIT TO THE EXTENT THAT WHILE RE-AS SESSING THE INCOME, THE ASSESSING OFFICER SHALL LOOK INTO THE ALTERNATE CLAIM OF THE ASSESSEE IN RESPECT OF DEDUCTION UNDER SECTION 80HHC IN ACC ORDANCE WITH LAW. IN SHORT, THE CO-ORDINATE BENCH ALLOWED THE ASSESSE E PARTIAL RELIEF. 2.3 IN THE MEANWHILE AN ORDER OF RE-ASSESSMENT FOR ASSESSMENT YEAR 2003-04 PASSED UNDER SECTION143(3) R.W.S. 263 WAS P ASSED ON 23/12/2008 DISALLOWING THE ASSESSEES CLAIM FOR DED UCTION BOTH UNDER SECTION 10A OF THE ACT AS WELL AS THE ASSESSSEES ALTERNATE CLAIM FOR DEDUCTION UNDER SECTION 80HHE OF THE ACT AND CONSEQ UENTLY DETERMINING THE INCOME OF THE ASSESSEE AT RS.31,89, 13,930/-. 2.4 PURSUANT TO THE ORDER OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN ITA NO.348/MUM/2008 DATED 17/6/2009, IN THE MATTER OF THE ASSESSEES APPEAL AGAINST THE CITS ORDER UNDER SEC TION 263 OF THE ACT DATED 20/11/2007, THE ASSESSING OFFICER TOOK UP FRE SH ASSESSMENT PROCEEDINGS. AFTER HEARING THE ASSESSEE IN THE MAT TERS OF ITS CLAIM FOR DEDUCTION UNDER SECTION10A OF THE ACT AND ALTERNATE CLAIM FOR DEDUCTION UNDER SECTION 80HHE OF THE ACT, THE ASSES SING OFFICER CONCLUDED THE ASSESSMENT REJECTING THE ASSESSEES C LAIM FOR DEDUCTION UNDER SECTION 10A BUT ALLOWED THE ASSESSEES ALTERN ATE CLAIM FOR 4 ITA NO. 4520/MUM/2013 (ASSESSMENT YEAR : 2003-04) DEDUCTION UNDER SECTION 80HHE(4) OF THE ACT AMOUNTI NG TO RS.16,59,23,129/-. THE ASSESSMENT WAS ACCORDINGLY COMPLETED UNDER SECTION 143(3) R.W.S. 254 OF THE ACT VIDE ORDER DAT ED 23/12/2010. 2.5 ON APPEAL BY THE ASSESSEE, THE CIT(A) REJECTED THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION10A OF THE ACT ON THE GROUND THAT SUB-SECTION (9) TO SECTION 10A OF THE ACT BEING OMI TTED BY FINANCE ACT, 2003 W.E.F. 1/4/2004, THE PROVISIONS OF SECTION 10A (9) OF THE ACT WERE IN THE FORCE FOR ASSESSMENT YEAR 2003-04. HOLDING THUS, THE CIT(A) DISMISSED THE ASSESSEES APPEAL VIDE THE IMPUGNED O RDER DATED 1/3/2013 3.1 AGGRIEVED BY THE ORDER OF THE CIT(APPEALS)-22, MUMBAI, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL RAISING T HE FOLLOWING GROUND:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-22, MUMBAI HAS ERRED IN UPHOLDING THE ORDER OF THE LEARNED INCOME TAX OFFICER -10(2) (4), MUMBAI AND DISALLOWING THE CLAIM OF DEDUCTION UNDER SECTION 10 A OF THE ACT OF INR 31,89,63,890/- IN RESPECT OF THE APPELLANTS STP UN ITS IN THE LIGHT OF THE ERSTWHILE PROVISIONS OF SECTION 10A(9) OF THE ACT. 3.2.1 THE LD. REPRESENTATIVE FOR THE ASSESSEE REITE RATED THE SUBMISSIONS PUT FORWARD BEFORE THE AUTHORITIES BELO W THAT BY VIRTUE OF THE OMISSION OF SECTION 10A(9) OF THE ACT FROM THE STATUTE BY FINANCE ACT, 2003 W.E.F. 1/4/2004. SECTION 10A OF THE ACT SHOULD BE READ AS IF THE PROVISIONS OF SUB-SECTION(9) THEREOF NEVER EXIS TED ON THE STATUTE BOOK SINCE THE OMISSION OF SUB-SECTION (9) OF SECTI ON 10(A) OF THE ACT WAS MADE WITHOUT A SAVING CLAUSE IN THESE CIRCUMS TANCES, THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE DEDUCTION UNDER SECTION10A OF THE ACT WAS CORRECTLY CLAIMED BY THE ASSESSEE IN RESPECT 5 ITA NO. 4520/MUM/2013 (ASSESSMENT YEAR : 2003-04) OF ITS MUMBAI UNIT-I AND PUNE UNIT-1&2 AND OUGHT TO HAVE BEEN ALLOWED. 3.2.2 THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMI TTED THAT THE AMENDMENT MADE BY FINANCE ACT, 2003 OMITTING SECTIO N 10A(9) OF THE ACT IS CURATIVE IN NATURE AND REQUIRES TO BE APPLI ED RETROSPECTIVELY AS THE SAME IS SUPPORTED BY LEGISLATIVE HISTORY AS WEL L AS LEGISLATIVE INTENT WHILE MOVING THE AMENDMENT WHEREBY THE AFORESAID PR OVISIONS WERE DELETED. IN THIS REGARD THE LD. REPRESENTATIVE FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE FINANCE MINISTERS SP EECH PRESENTING THE UNION BUDGET FOR 2003-04 AND PARTICULARLY TO PARA 1 02 THEREOF, WHEREIN IT WAS STATED THAT IT IS PROPOSED THAT THE CONCESSION EXTENDED TO IT UNDER SECTION 10A AND 10B OF THE INCOME TAX ACT WIL L CONTINUE AS ORIGINALLY ENVISAGED. AS PER LAW SUCH COMPANIES AS ARE CURRENTLY COVERED BY THESE TAX EXEMPTIONS LOSE THE BENEFITS U PON CHANGE IN THEIR OWNERSHIP OR SHAREHOLDING. THIS IS NOT LOGICAL. I AM, THEREFORE, REMOVING THESE RESTRICTIONS, THE BENEFIT OF SUCH T AX EXEMPTIONS WILL REMAIN EVEN IN CASE OF AMALGAMATION OR DE-MERGER. 3.2.3 IN THIS REGARD IT WAS SUBMITTED THAT THIS ISS UE IN THE CASE ON HAND IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY TH E DECISION OF THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF G E THERMOMETRICS INDIA PVT. LTD. IN ITA NOS. 257 & 258/BANG/2008 FOR ASSES SMENT YEAR 2003-04 AND 2004-05. IT IS CONTENDED THAT IN THIS DECISIO N, THE BANGALORE BENCH WITH REGARD TO THE EFFECT OF THE DELETION OF SECTIO N 10B(9) OF THE ACT ( WHICH IS PARI-MATERIA TO THE PROVISIONS OF SECTION 10A(9) OF THE ACT) AT PARA 11 OF ITS ORDER HAS HELD THAT EVEN THOUGH THE FINANCE ACT, 2003 MENTIONS THAT THE AFORESAID SUB-SECTION(9) IS OMITT ED WITH EFFECT FROM 6 ITA NO. 4520/MUM/2013 (ASSESSMENT YEAR : 2003-04) 1 ST APRIL 2004, IN VIEW OF THE FACT THAT THE SAID OMIS SION IS DIFFERENT FROM REPEAL, THE SAVING CLAUSE PROVIDED IN SECTION 6 OF THE GENERAL CLAUSES ACT IS NOT APPLICABLE. THEREFORE, SECTION 10B OF T HE ACT SHOULD BE READ AS THOUGH IT NEVER HAD SUB-SECTION(9) IN IT ALL IN ALL THE PROCEEDINGS UNDER THE ACT. IT IS SUBMITTED THAT SINCE THE FACT S OF THE CASE ON HAND ARE IDENTICAL TO THOSE IN THE CASE OF GE THERMOMETR ICS INDIA PVT. LTD. (SUPRA) RENDERED IN THE CONTEXT OF SECTION 10B(9) O F THE ACT, WHICH IS PARI-MATERIA TO SECTION 10A(9) OF THE ACT, SIMILARLY, SECTION 10A OF THE ACT SHOULD ALSO BE READ AS IF IT NEVER HAD SUB-SECT ION(9). 3.2.4 THE LD. REPRESENTATIVE FOR THE ASSESSEE FURTH ER SUBMITTED THAT THE AFORESAID DECISIONS OF THE CO-ORDINATE BENCH IN THE CASE OF GE THERMOMETRICS INDIA PVT. LTD. (SUPRA) HAS BEEN UPHE LD BY THE HONBLE KARNATAKA HIGH COURT VIDE ORDER IN ITA NO.876 & 87 7/2008 DATED 25/11/2014, WHEREIN REVENUES APPEAL AGAINST THE AF ORESAID ORDER WAS DISMISSED AND THE SUBSTANTIAL QUESTION OF LAW WAS ANSWERED IN FAVOUR OF THE ASSESSEE. 3.2.5 THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMI TS THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE ON HAND AND THE JUDICIAL PRONOUNCEMENTS RELIED UPON, THE ORDERS OF THE AUTHO RITIES BELOW IN DENYING THE ASSESSEE DEDUCTION UNDER SECTION 10A OF THE ACT IN RESPECT OF THE ASSESSEES STPI UNITS AT MUMBAI AND PUNE IN VIEW OF THE ERSTWHILE PROVISIONS OF SECTION 10A(9)OF THE ACT BE REVERSED AND THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION10A OF THE ACT BE ALLOWED. 3.3.1 PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATI VE STRONGLY SUPPORTED THE ORDERS OF THE CIT(A) IN DISALLOWING T HE ASSESSEES CLAIM 7 ITA NO. 4520/MUM/2013 (ASSESSMENT YEAR : 2003-04) FOR DEDUCTION UNDER SECTION10A OF THE ACT IN RESPEC T OF ITS STPI UNITS, IN VIEW OF THE FACT THAT ITS CLAIM IS HIT BY THE PROVI SIONS OF SUB-SECTION (9) OF SECTION 10A OF THE ACT WHICH WAS REPEALED ONLY W .E.F. 1/4/2004 AND WAS, THEREFORE, APPLICABLE FOR THE YEAR IN QUESTION . CITING, INTER-ALIA, THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF ALLADI KUPPUSWAMY (1977) (108 ITR 435) (SC), LD. DEPARTMEN TAL REPRESENTATIVE CONTENDED THAT THE PLAIN LANGUAGE OF THE ACT CANNOT BE INTERPRETED TO READ IT DOWN. IT WAS FURTHER SUB MITTED THAT THIS ISSUE HAS BEEN HELD AGAINST THE ASSESSEE BY THE DECISION S OF THE CO-ORDINATE BENCHES IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2004-05 IN ITA NO.2566/MUM/2009 AND BY THE ORDER OF ANOTHER CO-OR DINATE BENCH OF THIS TRIBUNAL IN ITA NO.348/MUM/2008 DATED 17/6/200 9 WHILE ADJUDICATING ON AN ORDER UNDER SECTION 263 OF THE A CT FOR ASSESSMENT YEAR 2003-04. 3.4.1 IN REJOINDER, THE LD. REPRESENTATIVE FOR THE ASSESSEE , WHILE REITERATING ITS EARLIER SUBMISSIONS (SUPRA) SUBMITT ED THAT THE CO- ORDINATE BENCH, WHILE ADJUDICATING THE APPEAL IN TH E ASSESSEES CASE FOR ASSESSMENT YEAR 2004-05(SUPRA) HAS ADJUDICATED THE ISSUE OF THE PROVISIONS OF APPLICABILITY OF PROVISIONS OF SUB-SE CTION (9) TO SECTION 10A OF THE ACT FOR THAT YEAR ONLY AND CERTAINLY HAS NOT RENDERED ANY FINDING IN RESPECT OF THE APPLICABILITY OF THE PROVISIONS OF SUB-SECTION(9) OF SECTION 10A IN THE CONTEXT OF THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION10A OF THE ACT FOR ASSESSMENT YEAR 2003-04 A S THE PRESENT APPEAL WAS NOT BEFORE THAT BENCH FOR ADJUDICATION O F THIS ISSUE. IN THIS CONTEXT, THE LD. REPRESENTATIVE FOR THE ASSESSEE CO NTENDS THAT THE AVERMENTS OF THE LD. DEPARTMENTAL REPRESENTATIVE WERE FACTUALLY 8 ITA NO. 4520/MUM/2013 (ASSESSMENT YEAR : 2003-04) ERRONEOUS AND MISLEADING. AS REGARDS LD. DEPARTMEN TAL REPRESENTATIVES SUBMISSION THAT THE SAID ISSUE HA S BEEN HELD AGAINST THE ASSESSEE IN THE ORDER OF THE CO-ORDINATE BENCH IN ITS ORDER ON 263 PROCEEDINGS FOR ASSESSMENT YEAR 2003-04(SUPRA), THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT IN THIS ORDER ALSO THE SUBMISSIONS OF THE LD. DEPARTMENTAL REPRESENTATIVE ARE FACTUALLY INCORRECT SINCE THE SAID ORDER ONLY UPHOLDS THE ASS UMPTION OF JURISDICTION BY THE CIT UNDER SECTION 263 OF THE AC T AND HAS NOT ADJUDICATED ON THE ASSESSEES CLAIM FOR DEDUCTION U NDER SECTION 10A OF THE ACT IN THE LIGHT OF THE PROVISIONS OF SUB-SECTI ON (9) THEREOF. 3.5.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD, INCLUDING THE JU DICIAL PRONOUNCEMENTS CITED. THE ISSUE BEFORE US FOR CONS IDERATION AND ADJUDICATION IS WHETHER THE ORDER OF THE AUTHORITIE S BELOW WERE CORRECT OR NOT IN DISALLOWING THE ASSESSEES CLAIM FOR DED UCTION UNDER SECTION 10A OF THE ACT AMOUNTING TO RS.31,89,63,,890/- IN R ESPECT OF THE ASSESSEES STPI UNITS IN MUMBAI AND PUNE IN THE LIG HT OF THE ERSTWHILE PROVISIONS OF SUB-SECTION(9) OF SECTION 10A OF THE ACT. 3.5.2 IN THE YEAR UNDER CONSIDERATION WNS(MAURITIUS ) LTD. A WHOLLY OWNED SUBSIDIARY OF WNS HOLDINGS ACQUIRED THE ENTIR E SHARE CAPITAL OF THE ASSESSEE FROM BRITISH AIRWAYS LTD., U.K. IN TH E RETURN OF INCOME THE ASSESSEE FOR ASSESSMENT YEAR 2003-04 THE ASSESSEE H AD CLAIMED DEDUCTION UNDER SECTION 10A OF THE ACT; SUBMITTING THAT THE AMENDMENT CARRIED OUT BY FINANCE ACT, 2003, WHEREIN SECTION 10A(9) OF THE ACT WAS DELETED WAS AN AMENDMENT OF CLARIFICATO RY NATURE AND SUCH DELETION SHOULD BE CONSIDERED TO HAVE BEEN OMITTED RETROSPECTIVELY. IN 9 ITA NO. 4520/MUM/2013 (ASSESSMENT YEAR : 2003-04) ORIGINAL SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSES SMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT VIDE ORDE R DATED 17/3/2006 ALLOWING THIS CLAIM AND ACCORDINGLY THE ASSESSEE WA S GRANTED THE DEDUCTION UNDER SECTION10A OF THE ACT. IN THE ORDE R OF RE-ASSESSMENT FOR ASSESSMENT YEAR 2003-04, PASSED UNDER SECTION 1 43(3) R.W.S. 263 OF THE ACT VIDE ORDER DATED 23/12/2008, PURSUANT TO RE VISIONARY PROCEEDINGS, THE ASSESSEES CLAIM FOR DEDUCTION UND ER SECTION 10A OF THE ACT WAS DISALLOWED BY APPLYING THE PROVISIONS O F SUB-SECTION (9) OF SECTION 10 OF THE ACT. THIS FINDING WAS UPHELD BY THE CIT(A) IN THE IMPUGNED ORDER AND THE MATTER IS BEFORE US FOR CONS IDERATION. 3.5.3 SUB-SECTION (9) OF SECTION 10A OF THE ACT WAS OMITTED FROM THE STATUTE BY FINANCE ACT, 2003,W.E.F. 1/4/2004. PARA 102 OF THE FINANCE MINISTERS SPEECH WHILE PRESENTING THE UNION BUDGE T FOR 2003-04 HAS BEEN PERUSED AND WE FIND THAT THE STATEMENT OF INTE NT OF THE LEGISLATURE FOR OMITTING SUB-SECTION (9) OF SECTION 10A OF THE ACT WAS THAT THE CONCESSIONS EXTENDED TO THE IT SECTOR UNDER SECTION S 10A & 10B OF THE ACT ARE TO BE CONTINUED AS ORIGINALLY ENVISAGED. I N THIS CONTEXT, THE PRESENT POSITION AS PER LAW THAT SUCH COMPANIES AS CURRENTLY COVERED BY THESE TAX EXEMPTION LOSE THESE BENEFITS UPON CH ANGE IN OWNERSHIP IS NOT LOGICAL, AND THEREFORE, THESE RESTRICTIONS A RE BEING REMOVED SO THAT THE BENEFIT OF SUCH TAX EXEMPTIONS WILL REMAI N EVEN IN CASES OF AMALGAMATION OR DEMERGER. IN THIS REGARD, WE REFER TO THE JUDGMENT IN THE CASE OF THE BANGALORE BENCH OF THE ITAT IN THE CASE OF GE THERMOMETRICS INDIA PVT. LTD. IN ITA NOS. 257 & 25 8/BANG/2008 FOR ASSESSMENT YEARS 2003-04 AND 2005-06, WHICH WE FEE L SQUARELY COVERS THE ISSUE BEFORE US IN FAVOUR OF THE ASSESSEE. IN THIS ORDER (SUPRA) THE 10 ITA NO. 4520/MUM/2013 (ASSESSMENT YEAR : 2003-04) BENCH, IN RESPECT OF THE EFFECT OF DELETION OF SECT ION 10B(9) OF THE ACT (WHICH IS PARI-MATERIA TO SECTION 10A(9) OF THE ACT) AT PARA 11 OF ITS ORDER HAS HELD THAT EVEN THOUGH THE FINANCE ACT, 20 03 MENTIONS THAT THE AFORESAID SUB-SECTION (9) IS OMITTED W.E.F. 1/4 /2004; IN VIEW OF THE FACT THAT THE SAID OMISSION IS DIFFERENT FROM REPEA L, THE SAVING CLAUSE PROVIDED IN SECTION 6 OF THE GENERAL CLAUSES ACT IS NOT APPLICABLE, THEREFORE, SECTION 10B OF THE ACT IS TO BE READ AS THOUGH IT NEVER HAD SUB-SECTION (9) IN IT AT ALL IN ALL PROCEEDINGS OF THE ACT. 3.5.4 IN COMING TO THIS VIEW WE PLACE RELIANCE AND DRAW SUPPORT ON THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF GE THERMOMETRICS INDIA PVT. LTD. IN ITA NOS. 876/2008 DATED 25/11/2014 FOR ASSESSMENT YEAR 2003-04 ON REVENUES APPEAL AGA INST THE ORDER OF THE CO-ORDINATE BENCH OF THE ITAT(SUPRA). IN PARA 4 OF THIS ORDER THE SUBSTANTIAL QUESTION OF LAW BEFORE THE HONBLE HIGH COURT WAS: WHETHER THE TRIBUNAL WAS CORRECT IN HOLDING THAT I N VIEW OF THE OMISSION OF SUB-SECTION 9 TO SECTION 10B OF THE ACT, W.E.F. 01. 04.2004, IT SHOULD BE UNDERSTOOD THAT THE SAID SECTION NEVER EXISTED IN T HE STATUTE BOOK AND THEREFORE THE BENEFIT CLAIMED BY THE ASSESSEE U/S. 10B SHOULD BE ALLOWED? THEIR LORDSHIPS AT PARA 7 AND 8 OF THEIR ORDER (SUP RA) HAVE ANSWERED THE QUESTION HOLDING AS UNDER:- 7. THE APEX COURT IN THE CASE OF KOLHAPUR CANESUGAR WORKS LTD. VS UNION OF INIDA REPORTED IN AIR 2000 SC 811 DEALING WITH THE EFFECT OF DELETION OF A PROVISION IN THE STATUTE IS HELD A T PARA 38 AS UNDER:- 38. THE POSITION IS WELL-KNOWN THAT AT COMMON LAW , THE NORMAL EFFECT OF REPEALING A STATUTE OR DELETING A PROVISI ON IS TO OBLITERATE IT FROM THE STATUTE BOOK AS COMPLETELY AS IF IT HAD NE VER BEEN PASSED, AND THE STATUTE MUST BE CONSIDERED AS A LAW THAT NE VER EXISTED. TO THIS RULE, AN EXCEPTION IS ENGRAFTED BY THE PROVISI ONS OF SECTION 6(1). IF A PROVISION OF A STATUTE IS UNCONDITIONALLY OMIT TED WITHOUT A SAVING CLAUSE IN FAVOUR OF PENDING PROCEEDINGS, ALL ACTION S MUST STOP WHERE THE OMISSION FINDS THEM, AND IF FINAL RELIEF HAS N OT BEEN GRANTED 11 ITA NO. 4520/MUM/2013 (ASSESSMENT YEAR : 2003-04) BEFORE THE OMISSION GOES INTO EFFECT, IT CANNOT BE GRANTED AFTERWARDS. SAVINGS OF THE NATURE CONTAINED IN SECTION 6 OR IN SPECIAL ACTS MAY MODIFY THE POSITION. THUS THE OPERATION OF REPEAL OR DELETION AS TO THE FUTURE AND THE PAST LARGELY DEPENDS ON THE SAVI NGS APPLICABLE. IN A CASE WHERE A PARTICULAR PROVISION IN A STATUTE I S OMITTED AND IN ITS PLACE ANOTHER PROVISION IN A STATUTE IS OMITTED AND IN ITS PLACE ANOTHER PROVISION DEALING WITH THE SAME CONTINGENCY IS INTRODUCED WITHOUT A SAVING CLAUSE IN FAVOUR OF PENDING PROCEE DINGS THEN IT CAN BE REASONABLY INFERRED THAT THE INTENTION OF THE L EGISLATURE IS THAT THE PENDING PROCEEDING FOR THE SAME PURPOSE MAY B E INITIATED UNDER THE NEW PROVISION. 8. ADMITTEDLY, IN THE INSTANT CASE, THERE IS NO SAV ING CLAUSE OR PROVISION INTRODUCED BY WAY OF AN AMENDMENT WHILE OMITTING SU B-SECTION (9) OF SECTION 10B. THEREFORE, ONCE THE AFORESAID SECTION IS OMITTED FROM THE STATUTE BOOK, THE RESULT IS IT HAD NEVER BEEN PASS ED AND BE CONSIDERED AS A LAW THAT NEVER EXISTS AND THEREFORE, WHEN THE ASSES SMENT ORDERS WERE PASSED IN 2006, THE ASSESSING OFFICER WAS NOT JUSTI FIED IN TAKING NOTE OF A PROVISION WHICH WAS NOT IN THE STATUTE BOOK AND DEN YING BENEFIT TO THE ASSESSEE. THE WHOLE OBJECT OF SUCH OMISSION IS TO EXTEND THE BENEFIT UNDER SECTION 10B OF THE ACT IRRESPECTIVE OF THE FACT WHE THER DURING THE PERIOD TO WHICH THEY ARE ENTITLED TO THE BENEFIT, THE OWNERSH IP CONTINUES WITH THE ORIGINAL ASSESSEE OR IT IS TRANSFERRED TO ANOTHER P ERSON. BENEFIT IS TO THE UNDERTAKING AND NOT TO THE PERSON WHO IS RUNNING TH E BUSINESS. WE DO NOT SEE ANY MERIT IN THESE APPEALS. THE SUBSTANTIAL QU ESTION OF LAW IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. ACCORDINGLY, THE APPEALS ARE DISMISSED. 3.5.5 IN THE FACTS AND CIRCUMSTANCES OF THE CASE AN D TAKING INTO ACCOUNT THE LEGAL PRECEDENTS, WE ARE OF THE CONSIDERED OPI NION THAT THE AFORESAID FINDING RENDERED BY THE HONBLE KARNATAK A HIGH COURT IN THE CASE OF GE THERMOMETRICS INDIA PVT. LTD. (SUPRA) SQ UARELY APPLIES TO THE CASE OF THE ASSESSEE; SECTION 10B AND 10A OF THE AC T BEING PARI-MATERIA . RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF GE THERMOMETRICS INDIA PV T. LTD. (SUPRA) WE HOLD THAT THERE BEING NO SAVING CLAUSE OR ANY AMEND MENT WHILE OMITTING SUB-SECTION (9) OF SECTION 10A OF THE ACT, THE RESULT IS THAT IT IS TO BE READ AS HAVING NEVER BEEN PASSED AND HAD NEVE R EXISTED ON THE STATUTE. IN THIS VIEW OF THE MATTER, WE REVERSE TH E ORDER OF THE CIT(A) 12 ITA NO. 4520/MUM/2013 (ASSESSMENT YEAR : 2003-04) ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO A LLOW THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 10A OF THE ACT FO R ASSESSMENT YEAR 2003-04. IT IS ACCORDINGLY ORDERED. 3.5.6 BEFORE PARTING, WE RECORD THAT WE HAVE CAREFU LLY PERUSED THE ORDERS OF THE CO-ORDINATE BENCHES OF ITAT IN ITA NO .2566/MUM/2009 FOR ASSESSMENT YEAR 2004-05 AND ITA NO.348/MUM/2008 DATED 17/06/2008 CITED BY THE LD. DEPARTMENTAL REPRESENTA TIVE. WE FIND THAT CONTRARY TO THIS AVERMENTS, THESE CO-ORDINATE BENCH ES HAVE NOT ADJUDICATED ON THE MERITS OF THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION10A OF THE ACT FOR ASSESSMENT YEAR 2003-04. IN THE TRIBUNALS ORDER FOR ASSESSMENT YEAR 2004-05, THE BENCH COULD NOT HAVE ADJUDICATED ON THE MATTER, AS THE PRESENT APPEAL FO R ASSESSMENT YEAR 2003-04 WAS NOT BEFORE IT. IN RESPECT OF THE TRIBU NALS ORDER DATED 17/6/2009 THE CITS ORDER UNDER SECTION 263 OF THE ACT FOR ASSESSMENT YEAR 2003-04(SUPRA), THE BENCH HAS ONLY UPHELD THE CIT(A)S ASSUMPTION OF JURISDICTION UNDER SECTION 263 AND NOT ADJUDICAT ED ON THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION10A OF THE ACT. 4. IN THE RESULT, THE ASSESSEES APPEAL FOR ASSESSM ENT YEAR 2003-04 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17/02/2016 SD/- SD/- (RAM LAL NEGI) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT ME MBER MUMBAI, DATED 17/02/2016 VM , SR. PS 13 ITA NO. 4520/MUM/2013 (ASSESSMENT YEAR : 2003-04) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI