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Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH, AHMEDABAD
ITA No. 2075& 2076/Ahd/2017 Alphatech Software Pvt Ltd Vs. ITO Assessment year: 2009-10 & 2010-11 Page 1 of 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH, AHMEDABAD [Coram: Pramod Kumar, AM and Ms. Madhumita Roy, JM] ITA No. 2075 & 2076/Ahd/2017 Assessment Year: 2009-10 & 2010-11 Alphatech Software Pvt Ltd ............…………......Appellant 5, Aryan Industrial Estate, Opp. Matruchhaya Marriage Hall, Bh. PVR Cinema, Chhani, Vadodara [PAN : AADCA 0799 A] Vs. Income Tax Officer ...........................Respondent Ward-1(1)(1), Vadodara
Appearances by:
Tushar Hemani for the Appellant Saurabh Singh for the Respondent
Date of concluding the hearing : 22.06.2018 Date of pronouncing the order : 09.07.2018
O R D E R Per Pramod Kumar, AM:
By way of these appeals, the assessee-appellant has challenged correctness of the order dated 30th June, 2017 passed by the by the CIT(A)-1, Vadodara in the matter of assessment under section 143(3) r.w.s. 147 of the Income-tax Act, 1961, for the assessment years 2009-10 & 2010-11, on the following grounds:-
“1. The learned CIT(A) has erred in not affording an opportunity of hearing to the appellant and in passing an ex parte order despite the fact that adjournment application was filed by the appellant, which is in violation of the Principles of Natural Justice. 2. The learned CIT(A) has erred both in law and on the facts of the case in confirming the action of AO in reopening the assessment u/s 147 of the Act, On the facts and circumstances of the case, learned CIT(A) ought to have held that the action of reopening is without jurisdiction and not permissible either in law or on facts.
The learned CIT(A) has erred both in law and on the facts of the case in confirming the action of AO of disallowing exemption of Rs.4,26,940/- (AY 2009-10 and Rs.3,89,086/- (AY 2010-11) u/s 10B of the Act.
Alternatively and without prejudice, Id. CIT(A) ought to have granted exemption u/s 10A of the Act.”
ITA No. 2075& 2076/Ahd/2017 Alphatech Software Pvt Ltd Vs. ITO Assessment year: 2009-10 & 2010-11 Page 2 of 4
When these appeals were taken up for hearing, it was noticed that the impugned order dated 30.06.2017 passed by the learned CIT(A) for both assessment years is an ex-parte order and that the appellant could not attend the proceedings before the CIT(A). However, at the time of hearing, learned representatives fairly agree that the issue in appeal is now covered, in favour of the assessee, by a co-ordinate bench’s decision in assessee’s own case in ITA No.2735/Ahd/2015 for the assessment year 2008-09, wherein the Tribunal vide its decision dated 18.12.2017, inter alia, observed as follows :-
“10. We have given a thoughtful consideration to the orders of the authorities below. There is no dispute that the assessee has been duly granted approval by STPI. We find that the said approval of the STPI was ratified by the Board vide letter dated 13.08.2007 and the same is exhibited at pages 18 to 20 of the Paper Book. We also find that the CBDT has come out with the following circular:-
"CLARIFIFATION REGARDING DEDUCTION UNDER SECTION 10B
[Instruction No.02/2009, Dated 9-3-2009, Corrected by [f. no.178/19/2008 - ITA-I] dated 8-5-2009]
Section 10B of the Income Tax Act provides for exemption of income in case of hundred per cent export oriented undertakings subject to prescribed conditions. Explanation 2(iv) below to the said section defines a "hundred percent export oriented undertaking" as an undertaking so approved by the Board appointed in this behalf by the Central Government under section 14 of the Industries Development and Regulation Act, 1951. Subsequent to the delegation of this power by the Ministry of Commerce and Industries to the Development Commissioners, such approvals to 100 per cent EOU's are now being granted by the Development Commissioners, which are later ratified by the Board of Approvals.
The matter regarding validity of approvals given by Development Commissioners has been examined in the Board it has been decided that an approval granted by the Development Commissioner in the case of hundred per cent export oriented unit will be considered valid once such an approval is ratified by the Board of Approval for EOU scheme."
We further find that identical issue was considered by the Hon'ble jurisdictional High Court of Gujarat in the case of PCIT vs. ECI Technologies Pvt. Ltd. (Supra). The relevant findings read as under :-
"Heard the learned advocates appearing on behalf of the respective parties at length. At the outset, it is required that the assessee claimed deduction under section 10B of the Act claiming 100 per cent. export oriented unit. It is an admitted position that there was already a permission/approval granted by the Development Commissioner declaring/approving the assessee as 100 per cent. export oriented unit.
ITA No. 2075& 2076/Ahd/2017 Alphatech Software Pvt Ltd Vs. ITO Assessment year: 2009-10 & 2010-11 Page 3 of 4 However, on considering the word, approved by the Board of Approval as mentioned in section 10B of the Act and at the relevant time there was no ratification of the decision of the Development Commissioner by the Board of Approval, the Assessing Officer denied the deduction under section 10B of the Act. However, is required to be noted and it is not in dispute that, vide Circular/instruction of the Central Board of Direct Taxes dated March 9, 2009, it was clarified that the approval granted by the Development Commissioner in the case of export oriented unit set up in an export processing zone will be considered valid, once such an approval is ratified by the Board of Approval for Export Oriented Unit Scheme. In the present case, it is not in dispute that the permission/approval granted by the Development Commissioner has been ratified by the Board of Approval, may be subsequently. The moment the decision/approval of the Development Commissioner is ratified by the Board of Approval it will relate back to the date on which the approval was granted by the Development Commissioner. If that be so, it cannot be said that the assessee was not a export oriented unit, which was entitled to the deduction under section 10B of the Act. Incidentally it is to be noted that in the subsequent circular No. 68 issued by the Export Promotion Council for EOUS and SEZS, dated May 14, 2009, it mentions that from 1990 onwards the Board of Approval had delegated the power of approval of 100 per cent, to the Development Commissioner and, therefore, it can be very well argued and said that the Development Commissioner while granting the approval of 100 per cent, export oriented unit exercises delegated powers. In any case and apart from the above when it is found that at the relevant time the Development Commissioner granted the approval of 100 per cent, export oriented unit in favour of the assessee-company, which came to be subsequently ratified by the Board of Approval and as observed hereinabove as such the ratification shall be from the date on which the Development Commissioner granted the approval, both the learned Commissioner of Income-tax (Appeals) as well as the learned Tribunal have rightly held that the assessee was entitled to deduction under action 10B of the Act as claimed. We confirm the view taken by both the authorities below holding that the assessee was entitled to 100 per cent. EOU as claimed. No substantial question of law arises in the present tax appeal. Hence, the present tax appeal deserves to be dismissed and is accordingly dismissed."
Respectfully following the findings of the Hon'ble jurisdictional High Court of Gujarat (supra), we set aside the findings of the CIT(A) and direct the Assessing Officer to allow the claim of deduction of Rs.32,56,998/- made under section 10B of the Act.
Appeal filed by the assessee is accordingly allowed.”
We see no reasons to take any other view of the matter than the view so taken by the co-ordinate bench. 4. Respectfully following the Tribunal’s decision dated18.12.2017, in assessee’s own case for assessment year 2008-09, we uphold the grievance of the assessee
ITA No. 2075& 2076/Ahd/2017 Alphatech Software Pvt Ltd Vs. ITO Assessment year: 2009-10 & 2010-11 Page 4 of 4 and direct the Assessing Officer to allow the claim of deduction under section 10B of the Act for both the assessment years under appeal.
In the result, appeals are allowed. Pronounced in the open court today on the 9th July, 2018
Sd/- Sd/-
Ms. Madhumita Roy Pramod Kumar (Judicial Member) (Accountant Member) Ahmedabad, the 9th day of July, 2018 **bt Copies to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad
Date of dictation: ................covered matter..09.07.2018.... 2. Date on which the typed draft is placed before the Dictating Member: ... 09.07.2018.... 3. Date on which the approved draft comes to the Sr. P.S./P.S.: …09.07.2018... 4. Date on which the fair order is placed before the Dictating Member for Pronouncement: ... 09.07.2018.... 5. Date on which the file goes to the Bench Clerk : . 09.07.2018……. 6. Date on which the file goes to the Head Clerk : ……………………………. 7. The date on which the file goes to the Assistant Registrar for signature on the order: …. 8. Date of Despatch of the Order: ………………......
10.