- (1.) HEARD Sri S.P. Gupta, learned Senior Advocate assisted by Sri Suyash Agarwal, learned counsel appearing for petitioner and Sri Bharatji Agarwal, learned Senior Advocate assisted by Sri Dhananjay Awasthi, learned counsel appearing for respondents. This writ petition under Article 226 of Constitution of India has arisen from notice issued by Commissioner, Income Tax - I, Kanpur (hereinafter referred to as 'CIT'), in purported exercise of power under Section 263 of Income Tax Act, 1961 (hereinafter referred to as 'Act, 1961), proposing revision of assessment order dated 19th March, 2014 (assessment year 2011 -12), passed by Income Tax Officer - N (II), Kanpur, under Section 143(3) of Act, 1961, computing income of petitioner -assessee at Rs. 35,37,980/ -, after allowing exemption under Section 10B of Act, 1961.
(2.) PETITIONER is a partnership firm. There are two partners, namely Anoop Kumar Mehra and Ashok Kumar Mehra. The firm is engaged in business of manufacture and export of 'saddlery' goods and allied items. Petitioner's unit is a 100% Export Oriented Unit (hereinafter referred to as 'EOU"). It commenced business and submitted return since Financial Year 2000 -01 (Assessment Year 2001 -02). Being a 100% EOU, petitioner was exempted from liability of tax under Section 10B of Act, 1961 to the extent of total income derived from export articles or things or computer software for a period of 10 consecutive assessment years. It was allowed exemption consistently for 10 years, commencing from financial year 2000 -01 (assessment year 2001 -02) to financial year 2009 -10 (assessment year 2010 -11). For 11th year i.e. financial year 2010 -11 (assessment year 2011 -12), again assessee filed return on 19th September, 2011, declaring 'nil' income, claiming exemption under Section 10B of Act, 1961. Petitioner declared total sales turnover at Rs. 157088434.12 and profit of Rs. 4,66,16,547.45. It claimed exemption on the entire amount of profit under Section 10B of Act, 1961. Assessing Officer passed assessment order dated 9th March, 2014, reducing export turnover of Rs. 15,70,88,434.12 by a sum of Rs. 1,11,76,289.37. In the result, export turnover determined by Assessing Officer for the purpose of Section 10B came to Rs. 14,59,12,144.75. The taxable income of petitioner -assessee thus was assessed at Rs. 35,37,980/ -. Against this assessment of taxable income Rs. 35,37,980/ -, petitioner -assessee preferred appeal before Commissioner of Income Tax (Appeals) -II, Kanpur (hereinafter referred to as 'CIT(A)') on 28th March, 2014, which was allowed vide order dated 9th May, 2014. The Appellate Authority accepted return of assessee and determination of taxable income of Rs. 35,37,980/ - was set aside.
(3.) REVENUE preferred appeal before Tribunal vide memo of appeal dated 15th September, 2014. It was registered as ITA No. 734/LKW/2014. While appeal was pending before Tribunal, Assessing Officer issued notice dated 25.9.2014, under Section 154/155 of Act, 1961, stating that petitioner firm was not entitled for any exemption under Section 10B, since 10 years' period had already completed with assessment year 2010 -11 and it has wrongly claimed exemption under Section 10B for assessment year 2011 -12, which is a manifest error and need be rectified.;