Calcutta High Court
Principal Commissioner Of Income ... vs M/S. Wizard Enterprises Pvt. Ltd on 17 January, 2022
Form No.(J2)
IN THE HIGH COURT AT CALCUTTA
SPECIAL JURISDICTION (INCOME TAX)
ORIGINAL SIDE
PRESENT:
THE HON'BLE JUSTICE T.S.SIVAGNANAM
AND
THE HON'BLE JUSTICE HIRANMAY BHATTACHARYYA
ITAT/109/2017
IA NO:GA/2/2017
(Old No: GA/1042/2017)
PRINCIPAL COMMISSIONER OF INCOME TAX 3, KOLKATA
VS.
M/S. WIZARD ENTERPRISES PVT. LTD.
Mr. Soumen Bhattacharyya, Adv.
...for the Appellant
Mr. Pratyush Jhunjhunwala, Adv.
...for the respondent
Heard on : 17.01.2022
Judgment on : 17.01.2022
T.S. SIVAGNANAM, J. :- This appeal by the revenue filed
under Section 260A of the Income Tax Act, 1961 (the Act) is directed
against the composite order dated 4th March, 2016 passed by the Income
Tax Appellate Tribunal "C" Bench, Kolkata, (Tribunal) in ITA No.
628/Kol/2011 and C.O. No. 134/Kol/2013 for the assessment year
2007-08 and ITA No.65/Kol/2012 and C.O. No.133/Kol/2013 for the
assessment year 2008-09.
The revenue has raised the following substantial questions of
law for our consideration :-
1. Whether on the facts and in the circumstances of the case, the
Learned Tribunal erred in law in allowing the benefit of
exemption under Section 10 B of the Income Tax Act by holding
the assessee as 100% Export Oriented Undertaking though the
assessee was not approved by the concerned statutory Board as
Export Oriented Undertaking as is required in terms of clause
IV of Explanation 2 of section 10 B of the Act.
2. Whether on the facts and in the circumstances of the case, the
Learned Tribunal erred in law in allowing the benefit of
exemption under section 10 A of the Income Tax Act by holding
the assessee as 100% Export Oriented Undertaking though the
assessee was not approved by the concerned statutory Board as
Export Oriented Undertaking as is required in terms of clause
IV of Explanation 2 of section 10 A of the Act.
3. Whether on the facts and circumstances of the case, the
Learned Tribunal erred in law in treating the assessee as 100%
Export Oriented Undertaking particularly when the assessee
did not have the Certificate of Approval from the Board
appointed in this regard by the Central Government in the
exercise of its power conferred under section 14 of the
Industries (Development and Regulation) Act 1951 and rules
framed thereunder.
We have heard Mr. Soumen Bhattacharyya, learned standing
Counsel appearing for the appellant/revenue and Mr. Pratyush
Jhunjhunwala, learned Counsel appearing for the respondent/assessee.
The assessing officer while completing the assessment under Section
143(3) of the Act by order dated 24.12.2008 denied the benefit of
exemption under Section 10 B of the Act on the ground that the assessee
is not a hundred per cent export oriented undertaking within the
meaning of the said Section. In other words, it was held, that the
assessee was not approved by the concerned statutory Board as a
hundred per cent export oriented undertaking as required under
explanation to Section 10 B of the Act. The assessee carried the matter
in appeal before the Commissioner of Income Tax (Appeals) - VIII,
Kolkata (CIT(A)). The CIT(A) by an elaborate order allowed the appeal
filed by the assessee vide order dated 20.12.2010. Aggrieved by the
same, the revenue has preferred the appeal before the Tribunal, in which
the assessee filed cross objection questioning the correctness of the order
of the CIT(A) in not allowing the deduction under Section 10A of the Act
and granting relief to the assessee only under Section 10B of the Act. The
Tribunal took up the appeals as well as the cross objections together and
noted that the question to be decided in the appeals as well as the cross
objections are whether the assessee is entitled for claim of deduction
under Section 10B/10A of the Act, in respect of profits derived from the
call centre operations from the unit registered with software technology
park of India (STPI) as hundred per cent export oriented unit (EOU).
The Tribunal took note of the entire facts and from paragraph 6 of the
order proceeded to take note of the various approvals which have been
granted by the authorities which were all documents filed by the
assessee in the paper book. Tribunal noted that an agreement was
entered into between the assessee and the Central Government on
20.01.2006 wherein there is a reference to a resolution passed by the
Ministry of Commerce dated 2.3.1994 granting status of the hundred per
cent export oriented unit to the assessee. The Tribunal has also referred
to the copy of the green card issued by the designated officer,
Government of India, Department of Information Technology and
Chairman, Inter-Ministerial standing committee on software technology
park scheme vide green card dated 16.02.2006. Further the Tribunal
took note of a letter dated 2.9.2011 addressed to the assessee by the
STPI regarding registration for setting up STP Unit. After noting these
facts the Tribunal also considered the submission on behalf of the
assessee that CBDT has issued a clarification dated 9.3.2009 to the
effect that power to grant approval under Section 14 of the Industrial
(Development & Regulation) Act, 1951 has been delegated to the
Development Commissioner and the approval granted by the
Development Commissioner shall be considered valid for the purpose of
exemption under Section 10B of the Act. With the above factual finding
the Tribunal granted relief to the assessee under Section 10B of the Act
by affirming the order passed by the CIT(A). Next the Tribunal took up
for consideration the issue as to whether the assessee would be entitled
to relief under Section 10A of the Act. The Tribunal pointed out the
similarities between Section 10A and Section 10B of the Act and held
that assessee is entitled for the benefit of deduction under Section 10A
that the assessee has not claimed the same under that provision on law
in the return of income. Further, the Tribunal rightly took note of the
judgement of the Hon'ble Supreme Court in the case of CIT VS.
Mahalaxmi Sugar Mills Co. Ltd. reported in (1986) 160 ITR 920 (SC)
wherein it was held that the duty cast on the Income Tax Officer to apply
relevant provisions of the Act for the purpose of determining the true
figure of the assessee's taxable income and the consequential tax
liability. That the assessee failed to claim the benefit of a set off cannot
relieve the income tax officer of his duty to apply Section 24 in an
appropriate case. It is settled legal principle that the department cannot
take advantage of the assessee's mistake in not claiming the exemption
in the return of income, thereby denying the exemption. This is so,
because the object of administration of the provisions of the Income Tax
Act is to ensure that the revenue is generated for the development of the
nation at the same time the assessee cannot be taxed for something more
than what is due and liable to be paid to the revenue. As rightly pointed
out by the learned Counsel appearing for the respondent/assessee
powers of the CIT(A) under Section 246A are wide enough to consider as
to whether the assessee was entitled for the claim of deduction under
Section 10A as well. Thus we find that a thorough factual exercise has
been done by the CIT(A) which has been re-examined for its correctness
by the Tribunal while affirming the findings of the CIT(A) qua, the relief
granted under Section 10B of the Act. That apart we find with regard to
the relief granted to the assessee under Section 10A of the act, the
Tribunal rightly took note of the legal position and granted relief. Hence,
we are satisfied that the order passed by the Tribunal is perfectly valid
and does not call for any interference. In the result, the appeal filed by
the revenue is dismissed and substantial questions of law are
accordingly answered against the revenue.
Consequently, the stay application stands dismissed.
(T.S. SIVAGNANAM, J.)
I agree.
(HIRANMAY BHATTACHARYYA, J.)
GH/kb.
