CAPGEMINI TECHNOLOGY SERVICES INDIA LIMITED (SUCCESSOR TO LIQUID HUB INDIA PRIVATE LIMITED),PUNE vs. ACIT, CIRCLE 16-(1), HYDERABAD

आदेश / ORDER PER RAVISH SOOD, JM:

The present appeal filed by the assessee company is directed against the order of the Commissioner of Income Tax (Appeals), NFAC, Delhi, dated 02/09/2025, which in turn arises from the assessment

2 ITA No.1982/Hyd/2025 Capgemini Technology Services India Limited vs. ACIT order passed by the Assessing Officer (for short, “AO”) under section 143(3) of the Income-tax Act, 1961 (for short, “Act”) dated 23/12/2019 for AY 2017-18. The assessee company has assailed the impugned order on the following grounds of appeal before us:

“General Grounds: 1. The Learned AO / Hon'ble CIT(A) erred in passing the order which is based on incorrect appreciation of facts and incorrect interpretation of law, and therefore erroneous, bad in law, and contrary to the facts and circumstances of the case; 2. The Learned AO erred in determining the Total Taxable Income of the Appellant for AY 2017-18 at INR 22,67,09,699 instead of the amount of INR 12,57,10,140 as reported in the Revised Return of Income filed by the Appellant and the Hon'ble CIT(A) further erred in upholding these actions of the Learned AO; Assessment order bad in law and liable to be quashed: 3. The Learned AO erred in passing an assessment order which is not a speaking order, which has been passed overlooking material facts claimed in the return as also in the course of assessment, and therefore liable to be quashed. 4. The Learned AO erred in issuance of notice u/s 143(2) of the Act dated 22.09.2018 in violation of CBDT instruction F.No.225/157/2017/ITA-II dated 23.06.2017, thereby erring in assumption of jurisdiction for making an assessment on the Appellant u/s 143(3) of the Act. Disallowance of deduction u/s 10AA of the Act: 5. The Learned AO / Hon'ble CIT(A) erred in disallowing the claim for deduction u/s 10AA of the Act. 6. The Learned AO erred in not giving an opportunity of being heard and violating the principles of natural justice while disallowing deduction u/s 10AA of the Act and the Hon'ble CIT(A) erred in upholding these actions of the Learned AO. Capgemini Technology Services India Ltd. Annexure to Form 36 Assessment Year 2017-18 7. The Learned AO / Hon'ble CIT(A) erred in not appreciating that the Revised Return of Income replaces the Original Return of Income and hence the deduction u/s 10AA should not be disallowed.

3 ITA No.1982/Hyd/2025 Capgemini Technology Services India Limited vs. ACIT 8. The Learned AO/ Hon'ble CIT(A) erred in not appreciating the fact that the deduction could not be claimed in the Original Return of Income due to technical glitches in the e-filing portal. 9. The Learned AO / Hon'ble CIT(A) erred in ignoring the fact that the Appellant had filed duly Form 56F within the due date of filing the Original Return of Income and had complied with all procedural requirements as were stipulated under the provisions of the Act for making claim of deduction u/s 10AA of the Act. 10. The Learned AO erred in disallowing the claim for deduction u/s 10AA of the Act by simply ignoring the Appellant's submissions and picking up an incorrect basis for computing the assessed income and the Hon'ble CIT(A) erred in upholding these actions of the Learned AO. 11. The Learned AO / Hon'ble CIT(A) erred in law in computing the assessed income based on the income determined as per intimation u/s 143(1) and ignoring the returned income as per the Revised Return of Income. Disallowance of Bonus u/s 43B of the Act: 12. The Learned AO / Hon'ble CIT(A) erred in making disallowance of bonus u/s 43B of the Act amounting to Rs. 81,52,989. 13. The Learned AO / Hon'ble CIT(A) erred in not granting deduction u/s 10AA with respect to the above disallowance of bonus u/s 43B of the Act. Remand for computation of book profits u/s 115JB: 14. The Hon'ble CIT(A) erred by remanding the matter insofar as computation of book profits u/s 115JB of the Act is concerned, since the provisions of section 251 of the Act do not provide the Hon'ble CIT(A) with powers to remand the matter or any aspect thereof to the file of the Learned AO, thus rendering the order of the Hon'ble CIT(A) to be liable to be quashed and set-aside. Interest u/s 234B and 234C of the Act: 15. The Learned AO/Hon'ble CIT(A) erred by levying the interest u/s 234B and 234C on the additional tax liability arrived by making adjustments in the intimation u/s 143(1) and Order u/s 143(3). Each of the above grounds of appeal is without prejudice to and independent of one another. Capgemini Technology Services India Ltd. Annexure to Form 36 Assessment Year 2017-18 The Appellant craves leave to add, alter, amend or delete the above grounds of appeal at or before the time of hearing of the appeal, so as to enable the Hon'ble Income tax Appellate Tribunal to decide this appeal according to law.”

4 ITA No.1982/Hyd/2025 Capgemini Technology Services India Limited vs. ACIT

5 ITA No.1982/Hyd/2025 Capgemini Technology Services India Limited vs. ACIT 6. Shri Sudin Sabnis, Ld. Authorized Representative (for short, “AR”) for the assessee company at the threshold of the hearing of the appeal, submitted that the “revised” return of income filed by the assessee company substituted the original return of income, and therefore, the deduction under section 10AA ought to have been considered on the basis of the said “revised” return of income. It was submitted that the AO merely adopted the income determined under section 143(1) of the Act while framing the assessment under section 143(3) of the Act, i.e., without independently examining the assessee’s claim for deduction under section 10AA of the Act. Apropos the disallowance under Section 43B of the Act, it was contended that even if the said disallowance is sustained, the enhanced profits would qualify for deduction under Section 10AA of the Act.

6 ITA No.1982/Hyd/2025 Capgemini Technology Services India Limited vs. ACIT on record, as well as considered the judicial pronouncements pressed into service by them to drive home their respective contentions.

7 ITA No.1982/Hyd/2025 Capgemini Technology Services India Limited vs. ACIT in ACIT, Circle 3(2), Ahmedabad Vs. M/s Vishnu Export, ITA No. 1840/Ahd/2018, dated 31/03/2023. In the said case, the indulgence of the Tribunal was sought for, inter alia, adjudicating as to whether the deduction can be claimed under the provisions of Section 10AA of the Act in the revised return of income. The Tribunal, while answering the said issue in the affirmative, had, after relying on the judgments of the Hon'ble High Court of Allahabad in the case of Dhampur Sugar Mills Ltd. v. CIT (1973) 90 ITR 236 (Allahabad), and that of the Hon'ble High Court of Gujarat in the case of CIT Vs. Mitesh Impex (2014) 367 ITR 85 (Gujarat), as well as the Finance Bill, 2023, wherein it was proposed that w.e.f 01st April, 2024, for claiming the benefit of the deduction under section 10AA of the Act, the return of income has to be filed within the “due date” as specified under section 139(1) of the Act, which, thereafter had been made effective from 1st April 2024, i.e., from assessment year 2024-25 and onwards, had observed as under:

“10. We have heard the rival contentions of both the parties and perused the materials available on record. There is no dispute with respect to the facts of the case which have been elaborated in the preceding paragraph, therefore we are not inclined to repeat the same for the sake of brevity and convenience. The following controversies arise for our adjudication: i. Whether the deduction can be claimed under the provisions of section 10AA of the Act in the revised return of income? …………… xxx………………….. xx……...............xxx……………….

10.1 As regards the 1st controversy, we note that the provisions of subsection (5) of section 139 of the Act entitles the assessee to file the revise return of income if there is any omission or any wrong statement in the return filed under section 139(1) of the Act. Once, a return is revised then the original

8 ITA No.1982/Hyd/2025 Capgemini Technology Services India Limited vs. ACIT return has to be ignored and the revised return has to be considered by the Revenue. In this respect the Hon'ble Allahabad High Court in the case of Dhampur Sugar Mills Ltd. v. CIT, 90 ITR 236 held as under:- ''The effective return for purposes of assessment is thus the return which is ultimately filed by an assessee on the basis of which he wants his income to be assessed... But when an assessment has to be made the assessee is given a right to file a correct and complete return if he discovers an error or omission in the return filed earlier. The assessment can be completed only on the basis of the correct and complete return.... Once a revised return is filed, the original return must be taken to have been withdrawn and to have been substituted by a fresh return for the purpose of assessment.''' 10.2 It is not out of the place to mention that a return can be revised only in the situations where there is an omission or any wrong statement in the return filed under section 139(1) of the Act. But, there is no allegation in the order of the AO that there was no omission or any wrong statement in the return of income. Thus, without going into the question whether there was any omission or any wrong statement in the return filed under section 139(1) of the Act, we hold that the AO was duty-bound to take a note of the revised return of income while framing the assessment. 10.3 It is the admitted position that the assessee has claimed the exemption under the provisions of section 10AA of the Act wherein there is no mandate to file the return of income within the time specified under section 139(1) of the Act for claiming the deduction unlike the proviso under the provisions of section 10A(IA) of the Act requiring the assessee to file the return of income within the time specified under section 139(1) of the Act for claiming the deduction. Thus, in the absence of any specific provision under the provisions of section 10AA of the Act to file the return of income within the provisions of section 139(1) of the Act, the assessee cannot be deprived of the benefit granted under the statute for the A.Y. 2015-16 deduction under the provisions of section 10AA of the Act in the given set facts and circumstances. 10.4 The above reasoning is further strengthened by the Finance Bill 2023 wherein it was proposed to file the return of income within the due date as specified under section 139(1) of the Act for claiming the benefit of the deduction under section 10AA of the Act which is effective from 1 April 2024 for the assessment year 2024-25. The relevant extract of the amendment is reproduced as under: 6. In section 10AA of the Income-tax Act, with effect from the 1st day of April, 2024,-- (a) in sub-section (1), after clause (ii) and before the Explanation, the following proviso shall be inserted, namely:-- "Provided that no such deduction shall be allowed to an assessee who does not furnish a return of income on or before the due date specified under sub-section (1) of section 139.";

9 ITA No.1982/Hyd/2025 Capgemini Technology Services India Limited vs. ACIT 10.5 It is important to note that the AO in his order has made reference to the order of the ITAT in the case of M/s Saffire Garments Vs. ITO 151 TTJ 114 wherein it was provided that the deduction cannot be claimed under section 10A of the Act if the return of income has not been filed within the time specified under section 139(1) of the Act. But undeniably the assessee has not claimed any deduction under section 10A of the Act. Therefore, we are of the view that no reference can be made to the order of the ITAT cited above. 10.6 Moving further, we note that the Hon'ble Gujarat High Court in the case of CIT versus Mitesh Impex reported in 367 ITR 85 has observed as under: "39. This is primarily on the premise that if a claim though available in law is not made either inadvertently or on account of erroneous belief of complex legal position, such claim cannot be shut out for all times to come, merely because it is raised for the first time before the appellate authority without resorting to revising the return before the assessing officer." 10.7 In the above case, the claim of the assessee was allowed by the Hon'ble Gujarat High Court even such claim was not made in the Income Tax Return and it was raised 1st time before the learned CIT-A whereas the facts of the case of A.Y. 2015-16 the assessee are on better footing than the case of the Hon'ble Gujarat High Court cited above. In the case on hand, the claim was made in the revised return of income and therefore, respectfully following the judgement of the Hon'ble Gujarat High Court cited above, we hold that the assessee cannot be deprived of the benefit granted under the statute merely on the reasoning that it was claimed in the revised return of income.”

We, thus, in the backdrop of our aforesaid observations, are of firm conviction that the authorities below had erred in declining the assessee’s claim for deduction under Section 10AA of the Act for the reason that the same was raised in its “revised” return of income, which, we may herein observe was filed on 01/12/2017 as per the mandate of Section 139(5) of the Act. We, thus, in the interest of justice, deem it appropriate to restore this issue to the file of the AO for fresh adjudication after examining the validity and effect of the revised return of income, eligibility of deduction under section 10AA of the Act, and consequential enhancement of deduction, if any, arising from

10 ITA No.1982/Hyd/2025 Capgemini Technology Services India Limited vs. ACIT disallowance under section 43B of the Act. The AO shall, in the course of the set aside proceedings, provide an adequate opportunity of being heard to the assessee company. The Grounds of appeal nos. 2 to 10, 13 are allowed for statistical purposes in terms of our aforesaid observations.

11 ITA No.1982/Hyd/2025 Capgemini Technology Services India Limited vs. ACIT verification. Accordingly, this issue is restored to the AO's file for fresh examination, after consideration of the ledger accounts, the tax audit report, the reconciliation statement, and supporting evidence regarding payments. The AO shall decide the issue afresh in accordance with the law after granting an adequate opportunity of being heard to the assessee company. The Grounds of appeal Nos. 11 & 12 are allowed for statistical purposes in terms of our aforesaid observations.

12 ITA No.1982/Hyd/2025 Capgemini Technology Services India Limited vs. ACIT 16. We principally concur with the Ld. AR that pursuant to the Finance Act, 2001, w.e.f 01/06/2001, the CIT(Appeals) have been divested of the jurisdiction that was earlier vested with them to “set aside” the matter to the AO. At the same time, we are of the view that, as the computation of the “book profit” under Section 115JB of the Act is purely computational, therefore, the subject matter requires to be set aside to the file of the AO, who is directed to verify the figures from the audited financial statements and the “revised” return of income and compute the correct “book profit” in accordance with section 115JB of the Act. The Ground of appeal No. 14 is allowed for statistical purposes. Needless to say, the AO shall, in the course of the set aside proceedings afford a reasonable opportunity of being heard to the assessee company, which shall remain at liberty to substantiate its claim based on fresh documentary evidence, if any.

13 ITA No.1982/Hyd/2025 Capgemini Technology Services India Limited vs. ACIT 19. In the result, the appeal of the assessee is partly allowed for statistical purposes.

Order pronounced in the open court on this 20th day of May, 2026.

Sd/- Sd/- (MANJUNATHA G.) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated 20th May, 2026. *OKK / SPS Copy to: S.No Addresses 1 M/s. Capgemini Technology Services India Ltd., [Successor to Liquid Hub India Pvt. Ltd.], Plot No.14, Rajiv Gandhi Infotech Park, Hinjewadi, Phase-III, MIDC SEZ, Village Man, Taluka Mulshi, Pune District, Pune, Maharashtra-411 057. 2 The ACIT, Circle-16(1), IT Tower, AC Guards, Masab Tank, Hyderabad. 3 The Pr.CIT, Hyderabad 4 The DR, ITAT Hyderabad Benches 5 Guard File

By Order Digitally signed by KAMALA KAMALA KUMAR KUMAR ORUGANTI ORUGANTI Date: 2026.05.21 13:24:35 +05'30' Sr. Private Secretary, ITAT, Hyderabad.