The Delhi High Court has held that the amended 80A (5) cannot be read as a stipulation barring and restricting the assessee from revising the computation/claim for deduction made in accordance with Section 80A (5) of the Act.
The respondent-assessee is engaged in providing ‘Processing Outsourcing Services covered within Section 10A of the Act and filed NIL taxable income with was later revised. The Assessing Officer (AO) partly accepted the revised computation. The Commissioner of Income Tax (Appeals) (CIT) held that this acceptance in part by the AO was contradictory since was only accepted to the extent beneficial to Revenue.
The issue for determination before the Hon’ble Court was that whether the ITAT was right in revising the computation of deduction under Section 10A and 80(5) of the Income Tax Act.
It was contended by the revenue-appellant that the revised computation should not have been accepted since the lower authorities have failed to take into account the amendment to Section 80A (5) vide Finance Act 2009.
Justice Sanjiv Khanna, after considering the submissions of both the parties referred to the case of Nath Brothers Exim International wherein a deduction was claimed for the first time in a revised return and constitutional vires of Sub-section 5 to Section 80A were challenged. The Court distinguishing the case from the present one went to the object of the amendment. It held that the object of the amendment was to defeat multiple claims of deduction and ensure better compliance. The provision does not state that deduction once claimed cannot be corrected and modified before AO.
Furthermore, ruling in favor of the assessee-respondent, the Hon’ble Court held that the amended provision cannot be read as a stipulation barring and restricting the assessee from revising the computation/claim for deduction made in accordance with Section 80A (5) of the Act.
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