ITO, CHENNAI V. Shriram soft Private Ltd., CHENNAI

ITA 506/CHNY/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4580 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2017
• Appeal Filed By: Department
• Bench Allotted: D
• Next Hearing Date: 26-04-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 27-02-2017
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Revised return
• Section: 10B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , . ! '# BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO. 504, 505 & 506/MDS,/2017 / ASSESSMENT YEARS : 2007-08, 2008-09 & 2009-10 THE INCOME TAX OFFICER, CORPORATE WARD -6(2), 121,M.G.ROAD, 7 TH FLOOR, CHENNAI 600 034. VS. M/S .SHRIM SOFT PRIVATE LTD ., F6, APOLLO DUBAI PLAZA, 100, MAHALINGAPURAM MAIN ROAD, NUNGAMBAKKAM, CHENNAI -600 034. [PAN AAICS 2450 F ] ( $% / APPELLANT) ( &'$% /RESPONDENT) / APPELLANT BY : MR.GURUBASHYAM, JCIT, D.R /RESPONDENT BY : NONE / DATE OF HEARING : 26.04 .2017 !' / DATE OF PRONOUNCEMENT : 03 .0 5 .2017 ( / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THESE THREE APPEALS OF THE REVENUE ARE DIRECTED AGAINST THE COMMON ORDER OF THE COMMISSIONER OF INCOME-TAX (AP PEALS)-15, CHENNAI DATED 08.11.2016 PERTAINING TO ASSESS MENT YEARS 2007- 08, 2008-09 & 2009-10. 2. THE ONLY ISSUE IN THESE APPEALS OF THE REVENUE IS WITH DIRECT TO DIRECTION OF LD.CIT(A) TO AO TO GRANT THE ALTERN ATIVE CLAIM OF DEDUCTION U/S.10A OF THE ACT INSTEAD OF SEC.10B OF THE ACT CLAIMED BY THE ASSESSEE IN RETURN OF INCOME. ITA NOS.504 TO 506/MDS./2017 :- 2 -: 3. NONE APPEARED ON BEHALF OF THE ASSESSEE. THE B ENCH WAS OF THE VIEW THAT THE APPEAL CAN BE DISPOSED OF WITHOUT THE ASSISTANCE OF THE ASSESSEE AND THEREFORE, THE APPEAL WAS HEARD E X-PARTE QUA THE RESPONDENT-ASSESSEE AND DISPOSED OF BY CONSIDERING THE MATERIALS AVAILABLE ON RECORD AFTER HEARING THE LD.D.R. 4. THE FACTS OF THE CASE ARE THAT THE ASSESSEE CL AIMED DEDUCTION U/S.10B OF THE ACT. THE SAME WAS DENIED B Y THE AO BY PLACING RELIANCE WITH JUDGEMENT OF DELHI HIGH COURT IN THE CASE OF M/S.REGENCY CREATIONS (27 TAXMANN.COM 322) AND FURT HER THE ALTERNATIVE CLAIM OF DEDUCTION U/S.10A WAS DENIED O N THE REASON THAT THERE IS NO REVISED RETURN OF INCOME FILED BY THE A SSESSEE BY PLACING RELIANCE ON THE JUDGMENT OF SUPREME COURT IN THE CA SE OF GOETZE INDIA IN 157 TAXMAN 01(SC). AGGRIEVED BY THE ORDER OF LD. ASSESSING OFFICER, THE ASSESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A ). ON APPEAL, THE LD.CIT(A) DIRECTED THE LD. ASSESSING OFFICER TO AL LOW ALTERNATIVE CLAIM OF DEDUCTION U/S.10A OF THE ACT AFTER DUE VERIFICAT ION OF CLAIM MADE BY THE ASSESSEE. 5. BEFORE US LD.D.R PLEADED THAT THERE WAS A VIOLA TION OF RULE 46A BY THE LD.CIT(A) IN DIRECTING THE AO THE DEDUC TION U/S.10A REQUIRES EXAMINATION OF THE ELIGIBILITY OF THE ASSE SSEE TO CLAIM THE SAME, AND IT ALSO REQUIRES TO BE ESTABLISHED WHETHE R THE ASSESSEE HAS ITA NOS.504 TO 506/MDS./2017 :- 3 -: COMPLIED WITH ALL THE PROCEDURAL REQUIREMENTS STIPU LATED U/S.10A, WHEN THE LD.CIT(A) OUGHT TO HAVE DIRECTED THE AO TO VERIFY THE SAME UNDER RULE 46A OF THE INCOME TAX RULES. 6. AFTER HEARING THE LD.D.R, WE ARE OF THE OPINION THAT RECENTLY SIMILAR ISSUE CAME FOR CONSIDERATION BEFORE THIS TR IBUNAL IN THE CASE OF ACIT VS. M/S.SOFTWARE PVT LTD., IN ITA NO.1811/HYD. /2011 VIDE ORDER DATED 03.08.2012 WHEREIN HELD AS FOLLOWS:- 5. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY, THE ASSESSEE HAS NOT BEEN APPRO VED AS 100% EOU AS PER EXPLANATION2, CLAUSE (IV) OF SECTION 10B OF THE ACT. SECTIONS 10A AND 10B STAND ON DIFFERENT FOOTING WHI LE SECTION 10B SPEAKS OF APPROVAL AS 100% EOU BY THE APPOINTED BOA RD, NO SUCH REQUIREMENT IS THERE SO FAR AS 10A IS CONCERNED. IN A CASE OF SIMILAR NATURE, THE ITAT, HYDERABAD BENCH IN ITA NO. 577/HY D/10 IN CASE VNS MACRO TECHNOLOGIES PVT. LTD., HYDERABAD WHILE H OLDING THAT THE ASSESSEE IS NOT ENTITLED TO AVAIL EXEMPTION U/S 10B , HOWEVER DIRECTED THE AO TO EXAMINE THE ISSUE OF ALLOWANCE O F DEDUCTION U/S.10A, IF THE ASSESSEE IS ENTITLED FOR SUCH DEDUC TION. THE ITAT HELD IN THE FOLLOWING MANNER: 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE CONTENTION OF THE ASSESSEE S COUNSEL IS THAT THE ASSESSEE IS 100% EOU ENTITLED FOR EXEMPTION U/S 10A AND WRONGLY CLAIMED THE DEDUCTION U/S 10B AND IT WAS A TECHNICAL MISTAKE IN CLAIMING DEDUCTION U/S 10B. THE ASSESSEES COUNS EL ITA NO. 1479/HYD/2012 M /S. OBJECTONE INFORMATION SYSTEMS L TD.,FURTHER ARGUED THAT THE ASSESSEE HAS FULFILLED ALL THE REQU IREMENTS OF PROVISIONS OF SECTION 10A. HOWEVER, THIS CLAIM OF T HE ASSESSEE NOT EXAMINED BY THE LOWER AUTHORITIES AND THEY STICK TO ONE CONTENTION THAT THE ASSESSEE CLAIM U/S 10B IS NOT ALLOWABLE. W E ARE AGREEING WITH THE DEPARTMENT THAT THE CONDITION FOR ALLOWANC E OF DEDUCTION U/S 10A AND 10B ARE STOOD ON DIFFERENT FOOTING. HOWEVER , THE DEPARTMENT CANNOT THRUST UPON THE ASSESSEE TO AVAIL DEDUCTION U/S 10B ONLY. IF THE ASSESSEE ENTITLED FOR DEDUCTION U/S 10A INSTEAD OF 10B, THAT CLAIM REQUIRED TO BE EXAMINED BY THE ASSESSING OFFICER IN ALL FAIRNESS. THE ISSUE OF ALLOWANCE OF DEDUCTION U/S 10A THOUGH ASSE SSEE 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 SET ASIDE THE ISSUE IN THE GROUNDS OF APPEAL OF THE ASSESSEE TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE IS SUE IN ACCORDANCE ITA NOS.504 TO 506/MDS./2017 :- 4 -: WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY TO THE ASSESSEE, AND ALSO TO GIVE A SPECIFIC FINDING WHETHER THE ASSESSE E IS ENTITLED TO DEDUCTION U/S 10A OF THE ACT OR NOT. THE ASSESSEE M AY FILE ANY EVIDENCE IN SUPPORT OF ITS CLAIM FOR DEDUCTION BEFO RE THE ASSESSING OFFICER. WE MAKE IT CLEAR THAT OUR OBSERVATIONS HER EIN ABOVE SHALL NOT HAVE ANY BEARING ON THE DECISION OF THE ASSESSING O FFICER WITH REGARD TO THE MERITS OF THE CLAIM OF THE ASSESSEE FOR DEDU CTION U/S 10A OF THE ACT. WE DIRECT ACCORDINGLY. FOLLOWING THE AFORESAID ORDER, WE RESTORE THE MATTE R TO THE FILE OF THE AO DIRECTING HIM TO EXAMINE AS TO WHETHER THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 10A OR NOT. IT IS OPEN TO THE ASSESSE E TO FILE EVIDENCE IN SUPPORT OF DEDUCTION U/S 10A. IF THE AO ULTIMATELY COMES TO A CONCLUSION THAT THE ASSESSEE ENTITLED TO DEDUCTION U/S 10A, TH EN SUCH DEDUCTION SHALL BE ALLOWED TO THE ASSESSEE. THE AO SHALL AFFORD A R EASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE COMPLETING TH E PROCEEDINGS. 5. BEING SO, IN VIEW OF THE ABOVE ORDER OF THE TRIB UNAL, WE ARE INCLINED TO REMIT THE ENTIRE ISSUE BACK TO THE FILE OF THE ASSE SSING OFFICER FOR FRESH CONSIDERATION. ACCORDINGLY, THIS ISSUE IS REMITTED TO THE FILE OF LD. ASSESSING OFFICER FOR FRESH CONSIDERATION. 7. IN THE RESULT, APPELLANT THE APPEAL OF THE REV ENUE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 03 RD MAY, 2017, AT CHENNAI. SD/ - SD/ - ( . ) ( G.PAVAN KUMAR ) ! / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 03 RD MAY, 2017. K S SUNDARAM &'(()*( +* / COPY TO: ( 1 . / APPELLANT 3. ( ,(- . / CIT(A) 5. */0 (1 / DR 2. / RESPONDENT 4. ( , / CIT 6. 02(3 / GF