Justices Antony Dominic and Dama Seshadri Naidu of Kerala High Court, in CIT v. M/S Flytxt Technology P. Ltd. Technopark Campus, Kariavattom, held that exemption under section 10B of the Income Tax cannot be a reason for denying the benefit of section 10A to the assessee.
In the instant case, claimed the benefit of section 10B of the Income Tax Act. Initially, the claim was allowed by the Assessing Officer. However, the Commissioner of Income Tax, by invoking his revisional jurisdiction, rejected the claim. While doing so, he has not considered the alternative plea of the assessee that it is eligible for deduction under section 10A. Instead, he directed the Assessing Officer to withdraw the exemption under Section 10B.
The claim of the assessee was that it could not have been deprived of the statutory benefit it was entitled to under section 10A on the ground that it had made a wrong claim under Section 10B.
On appeal, the ITAT directed the department to decide the issue afresh including the claim of the assessee for the benefit of Section 10A of the Income Tax Act.
Before the High Court, the Revenue contended that the power conferred on the Commissioner under Section 263 only authorised him to examine whether the order passed by the Assessing Officer is erroneous and prejudicial to the interest of the revenue, that restriction of power cannot affect the powers of the Tribunal which is bound to exercise under Section 254 of the Act.
However, the bench overruled the above contention and upheld the view taken by the Tribunal by relying on the Apex Court decision in NTPC’s case.
Read the full text of the Judgment below.
