Brief about the case
The petitioner is a private limited company carrying on business of manufacture and sale of readymade garments and export of the same. The said Company is an approved 100% (Export Oriented Unit) EOU and thereby it filed its return after claiming exemption u/s 10B of the Income Tax Act for the assessment years 2007-08, 2008-09, 2009-10. The same were accepted under Section 143(1)(a) of the I.T.Act, 1961. Thereafter, each case was selected for a detailed scrutiny and an assessment was made under Section 143(3) on 24.11.2009 allowing recomputed exemption under Section 10B and determining the total income of Rs.40,10,740/-. Thereafter, a notice u/s 147 was issued to the assessee and on enquiring the reasons for issue of such notice the AO replied that the assessee’s EOU had not been approved by the Specified Authority as required as clause (iv) of Explanation 2 to s.10B. Therefore, the assessee-company is not eligible for deduction under Section 10B.
Thereupon, the Company filed an objection through their letter dated 4.6.2014 as required by the Apex Court decision in GKN Driveshaft (India) Ltd Vs. ITO [259 IT 19 (SC)]. However, the Assessing Officer has passed an order dated 18.02.2015 rejecting the objections of the Company and posted the case for hearing and asked for further particulars in a format, which was not received by the Company. In the above background, the present Writ Petitions have been filed.
The petitioner submitted that it had already obtained approval granted by the Development Commissioner for the petitioner unit which shall be considered valid once such an approval is ratified by the Board of Approval for the Export Oriented Unit Scheme, hence the AO does not have any tangible material for reopening the case u/s 148.
The Madras High Court allowed the Writ petition and pronounced in favour of the assessee.
Facts of the case:
