Pointel Solutions India Pvt. Ltd., CHENNAI v. ACIT, CHENNAI

ITA 2074/CHNY/2016 | 2008-2009
Pronouncement Date: 17-10-2016

Appeal Details

RSA Number 207421714 RSA 2016
Assessee PAN AABCC6352R
Bench Chennai
Appeal Number ITA 2074/CHNY/2016
Duration Of Justice 3 month(s) 9 day(s)
Appellant Pointel Solutions India Pvt. Ltd., CHENNAI
Respondent ACIT, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 17-10-2016
Appeal Filed By Assessee
Bench Allotted A
Assessment Year 2008-2009
Appeal Filed On 08-07-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . . . . . ' #$ % &' ( [ BEFORE SHRI N.R.S. GANESAN JUDICIAL MEMBER AND SHRI D. S. SUNDER SINGH ACCOUNTANT MEMBER ] ./ I.T.A.NO. 2074/MDS/2016 / ASSESSMENT YEAR : 2008-09 M/S POINTEL SOLUTIONS INDIA PVT. LTD NO.0406 4 TH FLOOR SOUTH-D TIDEL PARK NO.4 RAJIV GANDHI SALAI CHENNAI 600 013 VS. THE ASSTT. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE-V(4) CHENNAI [PAN AABCC 6352 R] ( )* / APPELLANT) ( + )* /RESPONDENT) / APPELLANT BY : SHRI D. ANAND ADVOCATE /RESPONDENT BY : SHRI B. SAHADEVAN JCIT / DATE OF HEARING : 27 - 0 9 - 2016 ! / DATE OF PRONOUNCEMENT : 17 - 10 - 2016 / O R D E R PER D.S. SUNDER SINGH ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-3 CHENNA I DATED 28.3.2016 FOR ASSESSMENT YEAR 2008-09. 2. ALL THE GROUNDS OF APPEAL ARE RELATED TO THE REJECT ION OF ASSESSEES CLAIM UNDER SECTION10A OF INCOME TAX ACT . ITA NO.2074/16 :- 2 -: 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SOFTWARE DEVELOPMENT FILED ITS ORIGINAL RETURN OF INCOME ON 29/08/2008 ADMITTING TOTAL INCOME OF RS. NIL UNDER NORMAL PROV ISIONS AND RS.4266119/- UNDER SECTION 115JB OF THE ACT. THE AS SESSMENT WAS COMPLETED U/S 143(3) BY AN ORDER DATED 31/12/2010 A ND THE ASSESSING OFFICER ALLOWED THE CLAIM OF THE ASSESSEE U/S10B. SUBSEQUENTLY THE ASSESSING OFFICER REOPENED THE ASS ESSMENT FOR DISALLOWING THE ASSESSEES CLAIM U/S 10B FOR WANT O F APPROVAL FROM COMPETENT AUTHORITY. DURING THE REASSESSMENT PROCEE DINGS THE A.R OF THE ASSESSEE STATED BEFORE THE A.O THAT THE ASSESSEE HAD INADVERTENTLY MADE THE CLAIM U/S 10B INSTEAD OF 10A . FURTHER THE ASSESSEE SUBMITTED BEFORE THE A.O THAT IT IS A STPI UNIT AND 100% EOU OF COMPUTER SOFTWARE. NOT SATISFIED BY THE EXPL ANATION OF THE ASSESSEE THE AO REJECTED THE ALTERNATE CLAIM OF TH E ASSESSEE AND WITHDRAWN THE EXEMPTION ALLOWED EARLIER U/S 10B OF INCOME TAX ACT. THE AO RELIED ON THE DECISION OF HONBLE SUPRE ME COURT JUDGMENT IN THE CASE OF GOETZ INDIA LTD VS CIT(284 ITR 323). 4. THE ASSESSEE CHALLENGED THE ORDER OF THE AO BEFORE THE CIT(A) BUT NOT SUCCEEDED. WHILE DISMISSING THE APP EAL THE LD.CIT(A) HELD IN HIS ORDER IN PAGE NO. 6 AS UNDER: I AGREE WITH THE ASSESSING OFFICER THAT SEC. 10A AND SECTION 10B ARE TWO DIFFERENT SECTIONS HAVING DIFFERENT PURPOSE S DIFFERENT CONDITIONS AND DIFFERENT ELIGIBILITY CRITERIA. ON PERUSAL OF SECTION 10A PARTICULARLY FIFTH PROVISO ONE CAN NOTICE THAT THE DEDUCTION UNDER THIS SECTION IS ALLOWED TO AN ASSESSEE WHO F URNISHES RETURN ITA NO.2074/16 :- 3 -: OF INCOME ON OR BEFORE THE DATE SPECIFIED UNDER SUB -SECTION 1 OF SECTION 139. IT IS NOW ADMITTED BY THE APPELLANT T HAT IT HAS CLAIMED WRONG DEDUCTION U/S 10B IN THE RETURN FILE D U/S 139(1) OF THE IT ACT. FURTHER THE RETURN FILED U/S 139( 1) WAS SCRUTINIZED AND ORDER U/S 143(3) WAS PASSED. NOWHERE APPELLAN T HAS BROUGHT THE FACT BEFORE THE A.O AFTER FILING THE RE TURN OF INCOME TILL THE COMPLETION OF ASSESSMENT PROCEEDINGS. IND EED APPELLANT HAS MERRILY ACCEPTED ORDER U/S 143(3) AS A.O HAS ALLOWED DEDUCTION U/S 10B IN THE ORDER US 143(3). THIS FA CT ITSELF SPEAKS VOLUMES ABOUT APPELLANTS BONAFIDES. IT IS SEEN TH AT APPELLANT HAS CHANGED ITS STAND BECAUSE IT HAS NOW COME TO KNOW T HAT IT CANNOT FULFILL THE CONDITIONS LAID DOWN U/S 10B HENCE AP PELLANT IS CLAIMING DEDUCTION U/S 10A. THE SUBMISSIONS OF T HE AR OF THE APPELLANT CANNOT BE CONSIDERED AS PROVISO TO SECTIO N 10A IS CLEARLY PROHIBITING TO ALLOW APPELLANTS CLAIM AFTER ORIGIN AL RETURN WAS FILED U/S 139. AS FAR AS APPELLANTS CLAIM U/S 10B IS C ONCERNED I FOUND THAT A.O HAS CORRECTLY DISALLOWED THE SAME AFTER EX AMINING ELIGIBILITY OF THE APPELLANTS CLAIM. IT IS ALSO F OUND THAT APPELLANT COULD NOT SUBSTANTIATE ITS CLAIM U/S 10B. THEREFO RE I HAVE NO HESITATION TO AGREE WITH THE ASSESSING OFFICERS FI NDINGS THAT APPELLANT IS NOT ELIGIBLE TO CLAIM DEDUCTION U/S 1 0B. FURTHER THE ARGUMENTS OF THE LD. AR THAT CLAIM U/S 10B WAS INA DVERTENTLY MISTAKE IN THE ORIGINAL RETURN FILED U/S 139(1) IS NOT HOLD GOOD BECAUSE THE ISSUE OF DEDUCTION U/S 10B WAS EXAMINE D BY AUDITORS AND FILED REQUISITE FORM. SECONDLY THE C LAIM U/S 10B WAS ALLOWED U/S 143(3) THEREFORE I HOLD THAT THI S ARGUMENT OF THE LD. AR IS DEVOID OF MERITS. IN VIEW OF THE ABO VE DISCUSSION I CONFIRM THE DISALLOWANCE MADE BY THE A.O U/S 10B. 5. DURING THE APPEAL THE LD. A.R OF THE ASSESSEE STA TED THAT THE ASSESSEE IS A 100% SOFTWARE EXPORT UNIT LO CATED IN STPI AND ELIGIBLE FOR DEDUCTION U/S10A AND AT THE TIME O F FILING THE RETURN OF INCOME IT INADVERTENTLY CLAIMED THE DEDUC TION U/S10B INSTEAD OF 10A.THE ASSESSEE HAS FILED THE NECESSARY AUDIT REPORT AND THE COLUMNS OF THE AUDIT REPORT FOR 10A/10B ARE ONE AND THE SAME AND THERE WAS NO DIFFERENCE. FURTHER THE LD. A .R ARGUED THAT THE ASSESSEE SATISFIES ALL THE CONDITIONS FOR CLAIM ING THE DEDUCTION ITA NO.2074/16 :- 4 -: U/S 10A. DURING THE ORIGINAL ASSESSMENT PROCEEDINGS THE AO HAS NOT RAISED THIS ISSUE AND THERE WAS NO OCCASION T O THE ASSESSEE TO RELOOK THE EXEMPTION CLAIMED SINCE THE QUANTUM OF E XEMPTION IS THE SAME. THEREFORE THE A.R. ARGUED THAT THE LD CIT (A) SHOULD HAVE CONSIDERED THE ALTERNATE CLAIM MADE BY THE ASS ESSEE FAVORABLY. THE A.R ALSO RELIED ON THE DECISION OF ITAT CHENNAI B BENCH IN THE CASE OF DCIT VS DATA SOFTWARE RESEARC H COMPANY PVT. LTD. IN ITA NO.1837 & 1838/MDS/2014 DATED17TH JULY 2015. 6. ON THE OTHER HAND THE LD.DR ARGUED THAT SECTIONS 10A/10B ARE TWO DIFFERENT SECTIONS TO CLAIM THE TWO DIFFERENT EXEMPTIONS UNDER VARIOUS SECTIONS AND THE AO HAS NO JURISDICTION TO ENTERTAIN A FRESH CLAIM OTHER THAN BY WAY OF REV ISED RETURN OF INCOME AS HELD IN HONBLE SUPREME COURT JUDGMENT CI TED SUPRA. THEREFORE THE D.R HAS ARGUED THAT THERE IS NO ERROR IN THE DECISION OF LD.CIT(A) ORDER AND REQUESTED TO CONFIRM THE ORD ER OF THE CIT(A). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL PLACED BEFORE US. IN THE ORIGINAL RETU RN THE ASSESSEE MADE CLAIM U/S 10B AND THE ASSESSING OFFICER HAS AL LOWED THE CLAIM IN THE ORDER PASSED U/S143(3). DURING THE ASSESSMEN T PROCEEDINGS THE AO HAS NOT RAISED ANY ISSUE RELATING TO THE APP ROVAL FROM ITA NO.2074/16 :- 5 -: COMPETENT AUTHORITY FOR CLAIMING THE EXEMPTION U/S 10B OF THE ACT. SUBSEQUENTLY THE ASSESSMENT WAS REOPENED FOR WANT OF APPROVAL U/S14 OF INDUSTRIAL(DEVELOPMENT & REGULATI ONS) ACT 1951 FOR CLAIMING EXEMPTION U/S 10B. AT THE TIME OF ORIG INAL ASSESSMENT THOUGH THE AO ALLOWED AND ORDER U/S 143 WAS FRAMED NO APPROVAL WAS ASKED BY THE AO. WHILE MAKING THE ASSESSMENT I T IS THE DUTY OF THE AO TO CALL FOR NECESSARY DETAILS FOR ALLOWIN G THE CLAIMS MADE BY THE ASSESSEE . THE ASSESSING OFFICER REJECTED THE CLAIM SIMPLY BECAUSE THE ASSESSEE HAS NOT MADE THE CLAIM U/S 139 (1) THOUGH THE ASSESSEE SATISFY ALL THE CONDITIONS FOR CLAIMIN G EXEMPTION UNDER SECTION 10A. IT IS AN 100% EXPORT UNIT LOCATED IN S TPI . THE LD. CIT(A) HAS NOT BROUGHT ON RECORD ANY MATERIAL CONTR OVERTING THE ASSESSEES ELIGIBILITY EXCEPT A TECHNICAL ERROR REG ARDING THE FILING OF RETURN WITH CORRECT CLAIM U/S 10A. IT IS NOT DISPUT ED THAT THE ASSESSEE HAS FILED RETURN U/S 139(1) CLAIMING THE E XEMPTION OF INCOME OF RS.4383184/- AND THERE WAS NO CHANGE IN T HE AMOUNT OF EXEMPTION U/S 10A ALSO. THEREFORE WE ARE OF THE CON SIDERED OPINION THAT THE ASSESSEES ALTERNATE CLAIM U/S 10A OF THE ACT HAS TO BE ALLOWED SINCE THE ASSESSEE SATISFIED ALL THE CONDITIONS FOR EXEMPTION U/S10A. THE ITAT CHENNAI B BENCH IN TH E CASE OF DATA SOFTWARE RESEARCH COMPANY PVT. LTD(SUPRA) WHILE DECIDING THE SIMILAR ISSUE HELD IN PARA 5 AS UNDER: ITA NO.2074/16 :- 6 -: 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE CLAIM OF THE ASSESSEE THAT DEDUCTION U/S 10B WAS REJECTED BY THE ASSESSING OFFICER ON THE GROUND THAT THE APPROVAL F ROM THE BOARD AS REQUIRED UNDER THE PROVISIONS OF SECTION 10B WAS NOT OBTAINED. THEREFORE THE ASSESSEE MADE AN ALTERNATIVE CLAIM U/S 10A OF THE ACT. THE ONLY CONTENTION OF THE LD. DR IS THA T THE ASSESSEE CANNOT MAKE A CLAIM UNLESS THE SAME WAS MADE IN THE RETURN OF INCOME. WE HAVE GONE THROUGH THE JUDGMENT OF THE A PEX COURT IN M/S GOETZE (INDIA) LTD (SUPRA). THE APEX COURT FOUND THAT FOR THE PURPOSE OF MAKING A CLAIM THE SAME HAS TO BE M ADE IN THE RETURN OF INCOME. IN THE VERY SAME JUDGMENT THE A PEX COURT FOUND THAT HOWEVER IT WILL NOT DEPRIVE THE AUTHOR ITY OF THE TRIBUNAL TO ENTERTAIN ADDITIONAL GROUND OR ALTERNAT IVE GROUND. THEREFORE WHEN THE ASSESSEE IS ELIGIBLE FOR ALTER NATIVE CLAIM U/S 10A THIS TRIBUNAL IS OF THE CONSIDERED OPINION TH AT THE CIT(A) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE. T HIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) O N THIS ISSUE. ACCORDINGLY THE SAME IS CONFIRMED. 8. THE ABOVE DECISION OF THE COORDINATE BENCH SQUARELY COVERS THE ASSESSEES CASE AND FOLLOWING THE COORDI NATE BENCH DECISION THE EXEMPTION CLAIMED BY THE ASSESSEE U/S 10A INSTEAD OF 10B IS ALLOWED. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED ON 17 TH OCTOBER 2016 AT CHENNAI. SD/- SD/- ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( . . ' #$ ) (D.S. SUNDER SINGH) % / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 17 TH OCTOBER 2016 RD ITA NO.2074/16 :- 7 -: &' ()*) / COPY TO: 1 . / APPELLANT 4. + / CIT 2. / RESPONDENT 5. ) - . / DR 3. +/' / CIT(A) 6. -01 / GF