Deduction claimed u/s 10A of the IT Act

The Income Tax Appellate Tribunal (ITAT) Hyderabad Bench has condoned a 154-day delay in filing an appeal by M/s Annapurna Business Solutions. The appeal concerns an assessment for AY 2011-12, where the Principal Commissioner of Income Tax (Pr.CIT) had initiated proceedings under Section 263. The Pr.CIT questioned the Assessing Officer's assessment, citing two main issues: the handling of funds related to H1B visa processing by the assessee and the allowance of a Section 10A deduction without proper verification.

IN THE INCOME TAX APPELLATE TRIBUNAL
 HYDERABAD BENCHES : BENCH “B” HYDERABAD

(Through Video Conference)

BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER
AND
SHRI L.P. SAHU, ACCOUNTANT MEMBER

I.T.A. No. 97/Hyd./2016
A.Y : 2011-12

M/s Annapurna Business Solutions 
Hyderabad
[PAN: AAGFA5343D]
(Appellant)

vs. 

Dy.CIT,
Hyderabad Central Circle 2(1)
(Respondent)

 For Assessee: Shri S. Rama Rao, Adv.
 For Revenue: Sri Ravi Kiran, D.R.

Date of Hearing : 17/06/2021
 Date of Pronouncement : 12/07/2021

O R D E R

PER S.S. GODARA, J.M.

This Assessee’s appeal for A.Y. 2011-12 arises against the Pr.CIT(Central) Hyderabad’s order dated 17.03.2015 passed in case no. CIT(Central)/263/8/14-15, involving proceedings u/s 263/144 of the Income Tax Act, 1961 [ in short ‘the Act’]. Heard both the parties. Casefile perused.

2. We notice at the outset that assessee’s instant appeal suffers from 154 days delay in filing. Assessee submitted affidavit explaining reasons for the delay and prayed for condonation of delay. Keeping in view the case in Collector Land Acquisition vs. Mst. Katiji & others 1987 AIR 1353(SC) and  University of Delhi vs Union of India Civil appeal no. 9488/2019 dt. 17.12.2019 wherein it was held that such a delay supported by cogent reasons deserves to be condoned so as to make way for the cause of substantial justice. We accordingly hold that the delay in filing is neither intentional nor deliberate and condone the same, proceed with assessee’s appeal.

3. We notice that the relevant facts qua the instant lis are indeed in a very narrow compass. The Assessing officer had framed his sec.144 assessment on 30th March, 2013 in assessee’s case. The Pr.CIT thereafter issued sec.263 show cause notice proposing to revise the same thereby treating it as an erroneous one causing prejudice to the interest of revenue for the following twin reasons:

a) It is found from the records that the assessee Arm was engaged in H 1 B Visa processing on behalf of their client M/s VLS Inc. Although Visa processing was done by the assessee firm, the amount collected for the services were not deposited in the account of the assessee, but separately deposited in thepersonal account(s) of employees and relatives from the seized materials marked as Annexure A/ABS/PO-02/9, it was found that the assessee was collecting amount for process from prospective H1B applicants both in India as well as in USA from the year 2006. The fee ranges from Rs. 1,10,000/- to Rs.l,40,000/- in Indian currency and $ 2190 in US currency. On the basis ofthe seized material, it was found that during the FY 2010-11 (AY 2011-12), the assessee collected an amount of Rs.19,74,116/- towards H1B applications. As the amount was not disclosed by the assessee, the same was required to be included in the total income of the, assessee for the AY 2011-12.

b) It is also found that while completing the assessment the Assessing has not examined the issue relating to the deduction claimed u/s 10A and has allowed the same without proper verification/inquiry.

To know more in details find the attachment file