Case Law Details
Indus Teqsite Private Ltd. (presently known as Data Patterns India Pvt. Vs DCIT (Madras High Court)
Merely because the ratification has not been done by a Higher Authority, will it automatically vitiate the approval, which was granted by the Competent Authority namely the Development Commissioner.
The learned Single Judge, after noting that the said assessee (Kone Elevators (India) Private Limited Vs. ACIT was challenged by filing W.P.No.43662 of 2016), as in the case of the assessee before us, had not produced the ratification certificate from the Board, further noted that there were certain confusions even within the Department regarding production of ratification certificate from the Board and that merely because the ratification certificate had not been produced, the presumption could not be drawn that the assessee suppressed the facts. The learned Single Judge further noted that the assessee in the said case had a valid approval from the Software Technology Parks of India (STPI) based on the delegation granted to the directors of STPI by IMSC. The learned Single Judge found that it was not as if the said assessee claimed exemption under Section 10B of the Act without any such approval. Therefore, the learned Single Judge held that the reopening of assessment could not have been made as there was no mistake attributable to the said assessee. The learned Single Judge further held that even assuming that the Assessing Officer, while completing the original assessment, failed to take note of the facts, it could not be a case for reopening the assessment.
We approve the findings of the learned Single Judge in the decision in the case of Kone Elevators (India) Private Limited for the reasons set out by the learned Single Judge and for the reasons assigned by us in the preceding paragraphs. In other words, the non obtaining of ratification certificate from the Board has not been attributed to the assessee as a default committed by the assessee. There may be various reasons, for which, the Board might not have granted a ratification. Nevertheless, the approval granted by the Authority, to whom the power had been delegated was valid and hence, as long as the said approval was not withdrawn, the assessee would be entitled to rely upon the approval and claim deduction under Section 10B of the Act, which is a special provision for earning of foreign exchange. In such circumstances, the reopening of assessment is without jurisdiction and bad in law.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
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