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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI A. MOHAN ALANKAMONY
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) – 11, Chennai, dated 27.01.2016 and pertains to assessment year 2008-09. The assessee has filed cross-objection against the very same order of the CIT(Appeals). Therefore, we heard both the appeal and the cross-objection together and disposing of the same by this common order.
Sh. P. Radhakrishnan, the Ld. Departmental Representative, submitted that the assessee claimed deduction under Section 10A of the Income-tax Act, 1961 (in short "the Act") and no deduction was claimed under Section 10B of the Act. According to the Ld. D.R., since the approval was granted by the Director, Software Technology Parks of India and not by the Board, the assessee is not eligible for deduction under Section 10B of the Act. The CIT(Appeals), however, found that for the assessment year 2009- 10, this Tribunal allowed the claim of the assessee by placing reliance on the Ministry of Information & Technology’s letter dated 22.03.2012 stating that ratification was not required from the from the Board in the assessee's case. Accordingly, a similar order of the CIT(Appeals) was found to be confirmed by this Tribunal.
Therefore, according to the Ld. D.R., the CIT(Appeals) directed the Assessing Officer to allow deduction under Section 10B of the Act.
Referring to the grounds of appeal, the Ld. Departmental Representative submitted that no alternative claim was made by the assessee in the form of revised return. Therefore, according to the Ld. D.R., the CIT(Appeals) ought not to have allowed the claim of the assessee for the year under consideration.
On the contrary, Shri V. Ravichandran, the Ld. representative for the assessee, submitted that the Assessing Officer reopened the assessment without any material available on record. The assessee, according to the Ld. representative, is engaged in the business of export of software and IT enabled services. The Assessing Officer completed the assessment initially under Section 143(3) of the Act on 20.12.2010 after allowing deduction under Section 10B of the Act. Subsequently the Assessing Officer reopened the assessment by issuing notice under Section 148 of the Act. According to the Ld. representative, the Assessing Officer, in fact, withdrew the deduction allowed under Section 10B of the Act in the initial assessment. When the reopening of assessment was challenged before the CIT(Appeals), the CIT(Appeals) found that reopening of assessment was justified.
However, according to the Ld. representative, on merit, the CIT(Appeals) found that an identical claim of the assessee under Section 10A was allowed by this Tribunal, therefore, he allowed the claim of the assessee on merit. According to the Ld. representative, the assessee filed cross-objection challenging the reopening of assessment. The Assessing Officer has not furnished a copy of the reason for reopening, therefore, the reopening is not justified. Even on merit, according to the Ld. representative, the CIT(Appeals) by following the order of this Tribunal in the assessee's own case, allowed the claim of the assessee.
We have considered the rival submissions on either side and perused the relevant material available on record. The original assessment under Section 143(3) of the Act was completed on 30.12.2010 determining the total taxable income at `1,56,82,000/- after restricting the deduction under Section 10B of the Act to the extent of `5,23,71,495/-. Subsequently the Assessing Officer found that the income otherwise chargeable to tax escaped assessment by way of allowing deduction under Section 10B of the Act. The Assessing Officer found that for allowing deduction under Section 10B of the Act, ratification of the Board for EOU scheme is required.
Accordingly, after reopening, the Assessing Officer disallowed the claim of the assessee under Section 10B of the Act. On further appeal, the CIT(Appeals) found that the assessee is eligible for deduction under Section 10A of the Act.
The CIT(Appeals) found that STPI approval was renewed and the same was informed to the Assessing Officer by letter dated 05.03.2014. The CIT(Appeals) further found that for the assessment year 2009-10, a similar deduction under Section 10A of the Act was allowed by the CIT(Appeals) which was further confirmed by this Tribunal. Accordingly, the CIT(Appeals) allowed the claim of the assessee under Section 10A of the Act alternatively.
This Tribunal is of the considered opinion that when the STPI’s approval was informed to the Assessing Officer by letter dated 05.03.2014 and similar deduction under Section 10A of the Act was granted by this Tribunal for assessment year 2009-10, the CIT(Appeals) by rightly placing reliance on the order of this Tribunal directed the Assessing Officer to allow deduction under Section 10A of the Act. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
In the result, the appeal of the Revenue is dismissed. Consequently, the C.O. is also dismissed.
Order pronounced on 1st September, 2016 at Chennai.