Denial of Benefit u/s 10A only because of Form No.56F was not Filed is quite erroneous: ITAT [Read Order]

The Pune bench of the Income Tax Appellate Tribunal ( ITAT ) has held that denial of benefit u/s 10A only because Form No.56F was not filed is quite erroneous.

The appellant, revenue filed appeal against the order of CIT (A) allowing alternate claim of the assesse u/s. 10A of the Act ignoring the provisions of section 80A(5) of the Act.

Tribunal observed that Section 10A of the Act provides a deduction of such profits and gains derived by an undertaking from export of articles or things or computer software manufactured or produced by it. The assesse claimed that it has undertaken export of computer software manufactured by it and its unit is registered with Director, STPI. The approval granted by Director, STPI has been held to be a sufficient compliance with requirements of section 10 A (2) (i) (b) of the Act even as per the CBDT vide Instruction No.1/2006. Therefore, prima facie the 100% EOU of the assesse, being registered with STPI, is eligible to stake claim for deduction u/s 10A of the Act, provided the other conditions laid down in section 10A of the Act are satisfied.

The Tribunal observed in consolidated order dated 30-10-2014 in assesse’s own case for A.Ys. 2009-10 and 2010-11 that “Having regard to the peculiar facts and circumstances of the instant case, the stand of the Revenue that assesse cannot be allowed the benefits of section 10A of the Act merely because the prescribed Audit Report in Form No.56F was not filed in the return of income, is quite erroneous”.

Tribunal by placing reliance in the case of CIT vs. Valiant Communication Ltd. in ITA Nos.440 – 441/2012 dated 04.01.2013 of Honorable High Court of Delhi held “find no reason to deny the assesse an opportunity to put-forth its claim for deduction u/s 10A of the Act with regard the profits of its STPI unit, subject of-course to the fulfillment of the prescribed conditions. Further, vide Para No. 17 the Tribunal remanded the matter to the file of AO for verifying the claim of the assesse for deduction u/s. 10A of the Act as per law by observing clearly the AO shall consider the Form No.56F furnished by the assesse before the CIT(A) and such other material and submissions that the assesse may put-forth in order to justify its claim of deduction u/s 10A of the Act.

The coram of Sri R.S. Syal, Vice President and Sri S.S. Viswanethra Ravi, Judicial Member while dismissing the appeal held that “the stand of Revenue is quite erroneous in allowing the benefits of section 10A of the Act merely because the prescribed Audit Report in Form No. 56F was not filed in the return of income which clearly establishes that the Tribunal considered the issue in its peculiar facts and circumstances by taking into consideration the provisions of section 80 A (5) of the Act. Therefore, in our opinion, the only step is available for the AO is to examine whether the assesse fulfilled the other conditions to the satisfaction provision u/s. 10A of the Act. As discussed above, the AO did not dispute the same. The CIT (A) in the impugned order allowed alternate claim u/s. 10A of the Act by placing reliance on the order of ITAT. Therefore, we find no reason to interfere with the order CIT (A) and it is justified. Thus, the grounds raised by the appellant-revenue are dismissed”.

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