REDISOLVE SOFTWARE P LTD.,CHENNAI vs. DCIT, CHENNAI

The appeals filed by the assessee in I.T.A. Nos. 521 to 524/Chny/2018 are delayed by 4 days in filing the appeal before the Tribunal. Similarly, the appeal in I.T.A. No.254/Chny/2016 is filed before the Tribunal with a delay of 274 days delay. The assessee has filed petitions in the form of affidavit to condone the delay. We have gone through the condonation petition filed in the form of affidavits and find that the assessee was prevented by sufficient cause and the ld. DR has not made any serious objections, thereby, the delay in filing of the appeal stands condoned and admitted the appeals for adjudication.

Facts are, in brief, that the assessee is a private limited company providing Call Support Services to foreign companies. The assessee company is an STPI registered entity during the relevant financial year and the assessee is eligible to claim deduction under section 10A of the Act. The assessee company belatedly filed its return of income for the year under consideration claiming deduction under section 10A of the Act and the same was accepted by the Assessing Officer in the assessment order passed under section 143(3) of the Act dated

Aggrieved, the assessee is in appeal before the Tribunal in I.T.A. No. 522/Chny/2018 and also challenged the order passed by the ld. CIT under section 263 of the Act in I.T.A. No. 254/Chny/2016.

When these appeals were taken up for hearing, the ld. Counsel for the assessee has submitted that so far as assessment year 2010- 11 is concerned, the CBDT has condoned the delay and passed an order under section 119(2)(b) of the Act dated 10.10.2022 and directing the Assessing Officer to allow the claim of deduction under section 10A of the Act. So far as appeal in I.T.A. No. 254/Chny/2016 is concerned, consequent upon the directions of the CBDT vide its order dated 10.10.2022, the appeal becomes infructuous.

On the other hand, the ld. DR has submitted that the CBDT, while condoning the delay, has noted that the condonation of delay is not automatic to entitle the assessee to claim the deduction under section 10A of the Act and it has to be examined and for that purpose, the matter may be remitted back to the file of the Assessing Officer.

In reply, the ld. Counsel for the assessee has submitted that the

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. The Assessing Officer has initially allowed the claim of deduction under section 10A of the Act of the assessee by his assessment order under section 143(3) of the Act dated 25.03.2013. Subsequently, the ld. CIT, by exercising the power conferred under section 263 of the Act, directed the Assessing Officer to disallow the claim of deduction under section 10A of the Act. Now the CBDT by order under section 119(2)(b) of the Act dated 10.10.2022 for the assessment year 2010- 11 condoned the delay and also clarified that the condonation of delay in filing the return of income will not amount to acceptance of claims made in the concerned ROI of the assessee and the Assessing Officer shall deal with it on merits. In view of the above, by considering the entire facts and circumstances of the case, we are of the considered opinion that the Assessing Officer has to examine the claim of the assessee under section 10A of the Act in accordance with law. Thus,

So far as appeal in I.T.A. No. 254/Chny/2016 filed against the order passed under section 263 of the Act is concerned, we find that it is mere academic for the reason the issue is remitted back to the file of the Assessing Officer to adjudicate afresh and therefore, no separate adjudication is required and accordingly, the appeal filed by the assessee is dismissed.

So far as assessment years 2011-12 and 2012-13 are concerned, there was delay in filing the return of income and therefore, the Assessing Officer has denied the claim of deduction under section 10A of the Act. On appeal, the ld. CIT(A) has confirmed the order of the Assessing Officer. The assessee filed appeals before the Tribunal. The case of the assessee is that the belated filing of return of income and claiming the deduction under section 10A of the Act is directory in nature and not mandatory and relied upon the decision of the

On the other hand, the ld. DR has relied upon the decision of the Rajkot Special Bench of ITAT in the case of Saffire Garments v. ITO [2012] 28 taxmann.com 27 (Rajkot)(SB) and pleaded that the same should be followed.

We have heard the rival contentions and gone through the decision of the Rajkot Special Bench of the ITAT in the case of Saffire Garments v. ITO (supra), wherein, the Special Bench has held that to claim a benefit under section 10A of the Act, the return of income has to be filed under section 139 of the Act and it is a mandatory and not directory. Respectfully following the decision of the Rajkot Special Bench, we reject the arguments of the ld. Counsel for the assessee and the appeals filed by the assessee for the assessment years 2011- 12 and 2012-13 are dismissed.

So far as appeal for the assessment year 2009-10 is concerned, the assessee has not filed petition for condonation of delay before the

In the result, the appeal filed by the assessee in I.T.A. No. 522/Chny/2018 is allowed for statistical purposes and the appeals in I.T.A. No. 254/Chny/2016, I.T.A. Nos. 521, 523 and 524/Chny/2018 are dismissed. Order pronounced on the 30th November, 2022 in Chennai.