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Income Tax Appellate Tribunal, MUMBAI BENCHES “C”,MUMBAI
Before: SHRI JOGINDER SINGH & SHRI ASHWANI TANEJA
Appellant by Shri Abhishek Sharma, DR Respondent by Shri Sachin (Partner) Date of hearing : 03-05-2016 Date of pronouncement : 18-05-2016 O R D E R
Per ASHWANI TANEJA, AM
This is an appeal by the revenue raising following grounds of appeal:
Whether on the facts and circumstances of the case and in law, the Ld. (CIT(A) erred in allowing assesssee's claim for deduction u/s. 10A without appreciating the facts of the case.
The appellant prays that the order of the Ld. CIT(A) be set aside and the order of the AO be restored.”
The only issue raised in this appeal by the revenue is with regard to deduction allowed u/s 10A by ld.CIT(A). During the course of hearing, ld.DR relied upon the order of the Assessing Officer.
Per contra, the ld.counsel submitted that assessee had claimed deduction u/s 10B in its return. But during the course of assessment proceedings, the same was not found to be allowable by the Assessing Officer on the ground that approval from the competent authority was not available which was mandatory for claiming deduction u/s 10B. Under these circumstances, the assessee alternatively claimed exemption u/s 10A and submitted that it fulfilled all the conditions u/s 10A and was eligible to claim the deduction. All requisite evidences were also filed in this regard before the Assessing Officer . The Assessing Officer did not doubt the eligibility of the assessee to claim deduction u/s 10A, but denied the benefit of the same in view of judgment of Hon’ble Supreme Court in the case of Goetze India Ltd 284 ITR 323 (SC). During the course of appeal before the ld.CIT(A), the assessee demonstrated that it had submitted before the Assessing Officer Form No.56F being a report prescribed u/s 10A of the Income-tax Act, 1961 dated 15th July, 2010 showing that assessee was eligible to claim deduction u/s 10A of Rs.1,17,57,148. The assessee also demonstrated that it had fulfilled all requisite conditions for claiming deduction u/s 10A of the Act. After considering the submissions of the assessee it was found by ld.CIT(A) that assessee was eligible to claim deduction u/s 10A and the same should be allowed even if a claim was made in the given circumstances, for the first time during the course of assessment proceedings. Relevant part of order of ld.CIT(A) is reproduced below :
“5.1 I have carefully considered the facts and circumstances o the case, statement of facts, relevant assessment order, written submission, relied upon case laws and the arguments made by the LAR before the undersigned.
5.2 The only substantial issue of dispute in this appeal is the claim of appellant of deduction u/s 10A of the I.T. Act. In the return of income appellant made a claim u/s l0B of the I.T. Act but during the assessment proceedings when it was pointed out by the AO that in the light decision of Delhi High Court in the case of M/ s Regency Creations the appellant is not eligible for its claim u/s 10B as the assessee does not have approval required for claiming the deduction u/s l0B from the competent Board of Approval. Thereafter, the appellant made a request to AO that if deduction u/s l0B is denied then the deduction u/s l0A should be given to the appellant as it fulfills the conditions of deduction u/s 10 A. The AO did not agree to such claim of the appellant on the ground the revised return has not been filed in this case, therefore, in the light e decision of Hon'ble Apex Court in the case of M/s Goetz India Ltd. in of revised return the claim u/ s l0A cannot be allowed. The appellant, on the other hand, has pleaded during the appellate proceedings that in its the decision of Hon'ble Apex Court is not applicable because in the instant case there is no change in the returned income as the quantum of deduction u/s l0A and l0B remains the same. It is contended by the appellant that after the limitation of time for filing of revised return the appellant could only make a claim during the assessment proceedings by the revised computation of income and calculation of deduction u/ s 10A in prescribed proforma. The appellant has mainly relied upon the decision of two cases (i) M/ s Prithvi Brokers & Shareholders 349 ITR 336 (Bom) holding that additional claims can be made before the appellate authorities and (ii) M/ s Efextra solutions P. Ltd. 313/Del/2012 (ITAT Delhi) wherein under similar circumstances, as in the instant case, the appellant made alternate claim of deduction u/s l0A instead of section10B rut filing revised return. The appellant has also pleaded that in turn the appellant filed revised return and therein the AO has also allowed deduction u/s l0A as the appellant fulfills the conditions for the same. After considering the rival submissions, as well as the aforesaid case laws lied upon by the appellant I do not agree with the finding of the AO that in subsequent assessment year when time limit permitted filing of revised return the appellant filed revised return and therein the Assessing Officer has also allowed deduction u/s 10A as the appellant fulfils the conditions for the same. After considering the rival submissions, as well as he aforesaid case laws relid upon by the appellant I do not agree with the finding of he Assessing Officer that in view of the decision of M/s Goetz India Ltd. deduction u/s l0A cannot be lowed to the appellant because it is a fact that (i) the appellant fulfills the conditions of section l0A which is further strengthen from the fact that in subsequent years also the AO has allowed it to the appellant. (ii) there is no range in the returned income because the deduction claimed by the appellant u/s l0A & lOB are equal and the returned income is not reduced , claiming the deduction ix] s l0A. When the other conditions of claim of deduction u/s l0A are fulfilled, then the appellant deserves the deduction, accordingly, following the ratio of the decision of Delhi ITAT in the case M/s Efextra Esolutions P. Ltd. where under almost similar circumstances the alternative claim of the appellant for deduction ix] s l0A without filing the revised return was allowed, in the instant case also the AO is directed to low the same.”
Thus, it is noted from the above that on facts and law, the assessee was eligible for deduction u/s 10A. The only obstacle was that the claim in this regard was made during the course of assessment proceedings in substitution of earlier claim of deduction u/s 10B. In our considered view, the object of the assessment proceedings is to determine the correct amount of income and tax payable thereon. The revenue officials are not expected to collect the tax without the authority of law. The tax should never be collected for any amount which is more than the amount actually payable by the assessee as per law. The law has given ample powers to the assessing officers to make proper assessment of income of an assessee and simultaneously the legislature has also put various duties and obligations upon the AOs to ensure that no unfair or incorrect assessment is made upon a taxpayer. Undoubtedly, making of claim in accordance with the law is the primary responsibility of the assessee. But, if the assessee somehow failed to do so in the most appropriate manner as it should have been done, and if on an earliest occasion such a failure or lapse is brought to the notice of the Assessing Officer, then, it is equally a duty of the Assessing Officer to ensure that a valid claim of deduction / expense is not denied to the assessee especially when the assessee has complied with all the substantive conditions of the law.
We have support of many judgements to support our view. Immediate reference could be made to the judgment of the Hon’ble Bombay High Court in the case of M/s Prithvi Brokers & Shareholders 349 ITR 336 (Bom) as well as the judgment of Hon’ble Delhi High Court in the case of CIT vs Jai Parabolic Springs Ltd 306 ITR 42 (Del). We find that CIT(A) has written a well reasoned order while allowing claim of deduction u/s 10A to the assessee. Nothing wrong could be pointed out by the ld.DR during the course of hearing and, therefore, we are inclined to uphold the order of ld.CIT(A). 6. It is further brought to our notice that the Assessing Officer has himself granted the benefit of deduction u/s 10A for an amount of Rs.21,83,30,737 in the order passed u/s 143(3) dated 31-12-2013 for A.Y. 2012-13. Thus, we find no reason to deny the benefit of deduction for the year before us. Under these circumstances, the order of the ld.CIT(A) is upheld and ground raised
by the revenue is dismissed.
7. In the result, appeal of the revenue is dismissed. Order pronounced in the court on 18th May, 2016.