M/S ACCURATE DATA CONVERTORS vs. THE INCOMETAX OFFICER

TCA.No.549 of 2019 In the High Court of Judicature at Madras Dated : 07.8.2019 Coram : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal No.549 of 2019 M/s.Accurate Data Convertors P. Ltd., Coimbatore-2. ...Appellant Vs The Income Tax Officer, Corporate Ward-1, Coimbatore. ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 26.5.2017 made in ITA.No.2514/Mds/2016 on the file of the Income Tax Appellate Tribunal, Madras 'B' Bench for the assessment year 2009-10. For Appellant: Mr.Venkatanarayanan for M/s.Subbaraya Aiyer Padmanabhan For Respondent: Mr.T.R.Senthilkumar, SSC & Ms.K.G.Usharani, SC Judgment was delivered by

T.S.Sivagnanam,J

We have elaborately heard Mr.Venkatanarayanan, learned counsel appearing on behalf of the appellant – assessee and Mr.T.R.Senthilkumar, learned Senior Standing Counsel and Ms.K.G.Usharani, learned Standing 1/7 http://www.judis.nic.in TCA.No.549 of 2019 accepting notice for the respondent - Revenue. 2. This appeal, filed by the assessee under Section 260A of the Income Tax Act, 1961 (for short, the Act), is directed against the order dated 26.5.2017 made in ITA.No.2514/Mds/2016 on the file of the Income Tax Appellate Tribunal, Madras 'B' Bench for the assessment year 2009-10. 3. The assessee has filed this appeal by raising the following substantial questions of law : “i. Whether the Tribunal was right in law in holding that reopening of assessment under Section 147 on the basis of change of opinion is valid ? ii. Whether the Tribunal was right in law in holding that the appellant is not entitled to deduction under Section 10A(1) of the Act for the assessment year 2009-10 when the date of manufacture/production of computer software as 23.3.2000 relevant to assessment year 2000-01 was undisputed? iii. Whether the Tribunal was right in law in holding that the period of ten consecutive assessment years for computing deduction under Section 10A(1) should be considered from 1998-99 even though the approval for setting up a 100% export oriented unit under the STPI Scheme for the development/manufacture of computer software was granted only on 23.3.2000? and 2/7 http://www.judis.nic.in TCA.No.549 of 2019 3/7 http://www.judis.nic.in TCA.No.549 of 2019 iv. Whether the Tribunal erred in law in not appreciating that Section 10A(1) of the Act provides for deduction of such profits and gains derived by an undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years beginning with the assessment year relevant to the previous year, in which, the undertaking begins to manufacture or produce such articles or computer software as the case may be, shall be allowed from the total income of the assessee?” 4. The assessee has raised two issues namely with regard to the validity of reopening under Section 147 of the Act and with regard to the assessee's entitlement for deduction under Section 10A(1) of the Act. 5. On the reopening, the learned counsel for the assessee has pointed out that there was no tangible material referred to by the Assessing Officer while recording reasons for reopening as communicated to the assessee vide letter dated 15.12.2004 and that therefore, it was a case of change of opinion. The learned counsel has placed reliance on the decision of the Full Bench of the Delhi High Court in the case of CIT Vs. Kelvinator of India Ltd. [reported in (2002) 256 ITR 1]. 4/7 http://www.judis.nic.in TCA.No.549 of 2019 6. With regard to the benefit under Section 10A of the Act, the learned counsel for the assessee has strenuously contended that there was a valid approval as a software technology park unit only on 23.3.2000 and when the assessee filed the statutory form in Form 56FS furnishing the details relating to the claim made by the assessee for deduction under Section 10A of the Act, the date of commencement of manufacture or production was wrongly stated as 03.10.1997, which referred to the date of incorporation of the company i.e. 06.10.1997. According to the learned counsel, this aspect of the matter was not taken into consideration by the Assessing Officer while completing the assessment under Section 147 of the Act and the Commissioner of Income Tax (Appeals)-1, Coimbatore [for short, the CIT(A)] also brushed aside the same and further, the Tribunal wrongly confirmed the order passed by the CIT(A). 7. At the first blush, we were of the opinion that a genuine mistake had occurred when the assessee submitted Form 56FS. However, on a closer reading of the factual aspects, we find that the month and year of commencement furnished by the assessee are correct except for the date, as instead of 06.10.1997, it has been mentioned as 03.10.1997. Therefore, the theory of mistake committed while submitting Form 56FS deserves to be outrightly rejected. 5/7 http://www.judis.nic.in TCA.No.549 of 2019 8. With regard to the plea that the reopening of assessment is a mere change of opinion, the learned counsel has pressed into service the decision of the Full Bench of the Delhi High Court in the case of Kelvinator of India Ltd. 9. We have perused the scrutiny assessment under Section 143(3) of the Act, from which, we find that there is absolutely no discussion nor there is anything to indicate that the Assessing Officer, while completing the scrutiny assessment on 04.10.2011, had taken into consideration these facts and more particularly the date, from which, the assessee is entitled to claim the benefit under Section 10A of the Act. Furthermore, the re-assessment is within four years and under Section 147 of the Act, the Assessing Officer has got powers to assess and re-assess. This aspect was elaborately gone into by the Assessing Officer while completing the re-assessment and subsequently by the CIT(A) by re-appreciating the factual position and once again by the Tribunal by further re-appreciating the factual position and noting the provisions of Section 10A of the Act as they stood during the period 1997-98 to 1999-2000 and the amendment made to Section 10A of the Act vide the Finance Act, 2000. Thus, we find that the entire issue revolves around the factual matrix and that there is no substantial question of law arising for consideration in this appeal. 6/7 http://www.judis.nic.in TCA.No.549 of 2019 T.S.SIVAGNANAM,J AND V.BHAVANI SUBBAROYAN,J RS 10. Accordingly, the above tax case appeal is dismissed. No costs. 07.8.2019 Internet: Yes To 1.The Income Tax Appellate Tribunal, Madras 'B' Bench. 2.The Income Tax Officer, Corporate Ward-1, Coimbatore. TCA.No.549 of 2019 7/7 http://www.judis.nic.in