PCIT Vs Ms. Oracle (OFSS) BPO Services Ltd (Delhi High Court)
Conclusion: Amended 80A (5) could not be read as a stipulation barring and restricting the assessee from revising the computation/claim for deduction made in accordance with Section 80A (5).
Held: The issue for determination was whether the ITAT was right in revising the computation of deduction under Section 10A and 80(5). Held: The objective behind the amendment in section 80A (5) was to defeat multiple claims of deduction and ensure better compliance. Reference to the expression „multiple claims of deduction‟ would be with reference to the stipulation that deduction should be claimed under a particular provision and it could not be shifted and treated as deduction claimed under the other provision. Language of Sub-section 5 to Section 80 A does not state that the deduction once claimed under a particular section cannot be corrected and modified before AO. Indeed, AO could examine the claim for deduction and could make adjustment/ disallowance. There was no stipulation in the amended provision barring and restricting the assessee from revising the computation/ claim for deduction made in accordance with Section 80A (5).
FULL TEXT OF THE HIGH COURT ORDER / JUDGEMENT
This appeal filed by the Revenue under Section 260A of the Income-Tax Act, 1961 in the case of M/s.Oracle (OFSS) BPO Services Ltd. („respondent-assessee‟, for short) relates to the assessment year 2009-10 and arises out of the order of the Income-Tax Appellate Tribunal („Tribunal‟ for short) dated 31st October, 2017.
2. Present appeal was admitted vide order dated 21st May, 2018.
3. Substantial question of law as re-framed vide order dated 05th September, 2018, reads as under:
“Did the Income Tax Appellate Tribunal (ITAT) fall into error in holding that the revised computation of deduction under Section 10A of the Income Tax Act, 1961 („the Act’) for short) was permissible having regard to Section 10A (5) and Section 80A(5) of the Act?”
4. The respondent assessee engaged in the business of providing „Processing Outsourcing Services’, during the assessment year in question had no other business activity apart from business activities covered under Section 10A of the Act. Accordingly, in return of income filed on 29th September, 2009 it had claimed deduction of Rs.17.87 crores under Section 10A of the Act with NIL taxable income under the head of „income from business and profession’. In order to claim deduction under Section 10A of the Act the respondent-assessee had filed Form 56F along with its return. In addition, respondent – assessee, had earned income of Rs.19.66 lakhs on fixed deposit receipts from banks, which it declared as income under the head „Other Sources’. Accordingly, the net taxable income was Rs.19.68 lakhs.
5. During the course of the assessment proceedings, the respondent-assessee had filed a revised computation of income making suo motu disallowance of Rs.2,14,50,610/- and allowance of Rs.33,25,522/- from business income as declared which it claimed was inadvertently missed out, as per the details given below:
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