Revised List of exempted services in Service Tax, to be applicable w.e.f 01-07-2012

Government of India
Ministry of Finance 
(Department of Revenue)

Notification No.  25/2012-Service Tax

New Delhi, the 20^th June, 2012

G.S.R……(E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Act) and in supersession of notification number 12/2012- Service Tax, dated the 17^th March, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 210 (E), dated the 17^th March, 2012, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the following taxable services from the whole of the service tax leviable thereon under section 66B of the said Act, namely:-

1.      Services provided to the United Nations or a specified international organization;

2.      Health care services by a clinical establishment, an authorised medical practitioner or  para-medics;

3.      Services by a veterinary clinic in relation to health care of animals or birds;

4.      Services by an entity registered under section 12AA of the Income tax Act, 1961 (43 of 1961) by way of charitable activities;

5.      Services by a person by way of-

(a)     renting of precincts of a religious place meant for general public; or

(b)     conduct of  any religious ceremony;

6, Services provided by-

 (a) an arbitral tribunal to -

 (i) any person other than a business entity; or

(ii) a business entity with a turnover up to rupees ten lakh in the preceding financial year;

           (b)  an individual as an advocate or a partnership firm of advocates by way of   legal services to,-

         (i) an advocate or partnership firm of advocates providing legal services ;

        (ii) any person other than a business entity; or

        (iii) a business entity with a turnover up to rupees ten lakh in the preceding financial  year; or

     (c)  a person represented on an arbitral tribunal to an arbitral tribunal;

7.  Services by way of technical testing or analysis of newly developed drugs, including vaccines and herbal remedies, on human participants by a clinical research organisation approved to conduct clinical trials by the Drug Controller General of India;

8.  Services by way of training or coaching in recreational activities relating to arts, culture or sports;

  9.    Services provided to or by an educational institution in respect of education     exempted from service tax, by way of,-

(a)  auxiliary educational services; or

(b)  renting of immovable property;

10. Services provided to a recognised sports body by-

(a)  an individual as a player, referee, umpire, coach or team manager for participation in a sporting event organized by a recognized sports body;

(b)  another recognised sports body;

11.  Services by way of sponsorship of sporting events organised,-

(a)  by a national sports federation, or its affiliated federations, where the participating teams or individuals represent any district, state or zone;

(b)  by Association of Indian Universities, Inter-University Sports Board, School Games Federation of India, All India Sports Council for the Deaf, Paralympic Committee of India or Special Olympics Bharat;

(c)   by Central Civil Services Cultural and Sports Board;

(d)  as part of national games, by Indian Olympic Association; or

(e)  under Panchayat Yuva Kreeda Aur Khel Abhiyaan (PYKKA) Scheme;

12. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of -

(a)  a civil structure or  any other original works meant predominantly for  use other than for commerce, industry, or any other business or profession;

(b) a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958);

(c)  a structure meant predominantly for use  as (i) an educational, (ii) a clinical, or  (iii) an art or cultural establishment; 

(d)  canal, dam or other irrigation works;

(e)  pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal; or

(f) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in the Explanation 1 to clause 44 of section 65 B of the said Act;

13.  Services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of,-

(a) a road, bridge, tunnel, or terminal for road transportation for use by general public;

(b) a civil structure or  any other original works pertaining to a scheme under Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana;

(c) a building owned by an entity registered under section 12 AA of the Income tax Act, 1961(43 of 1961) and meant predominantly for religious use by general public;

(d)  a pollution control or effluent treatment plant, except located as a part of a factory; or

a structure meant for funeral, burial or cremation of deceased;

14. Services by way of construction, erection, commissioning, or installation of original works pertaining to,-

(a)  an airport, port or railways, including monorail or metro;

(b)  a single residential unit otherwise than as a part of a residential complex;

(c)   low- cost houses up to a carpet area of 60 square metres per house in a housing project approved by competent authority empowered under the ‘Scheme of Affordable Housing in Partnership’ framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India;

(d)  post- harvest storage infrastructure for agricultural produce including a cold storages for such purposes; or

(e)  mechanised food grain handling system, machinery or equipment for units  processing  agricultural produce as food stuff excluding alcoholic beverages;

15. Temporary transfer or permitting the use or enjoyment of a copyright covered under clauses (a) or (b) of sub-section (1) of section 13 of the Indian Copyright Act, 1957 (14 of 1957), relating to original literary, dramatic, musical, artistic works or cinematograph films;

16. Services by a performing artist in folk or classical art forms of (i) music, or (ii) dance, or (iii) theatre, excluding services provided by such artist as a brand ambassador;

17.    Services by way of collecting or providing news by an independent journalist, Press Trust of India or United News of India;

18. Services by way of renting of a hotel, inn, guest house, club, campsite or other commercial places meant for residential or lodging purposes, having declared tariff of a unit of accommodation below rupees one thousand per day or equivalent;

19. Services provided in relation to serving of food or beverages by a restaurant, eating joint or a  mess, other than those having (i) the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year, and (ii) a licence to serve alcoholic beverages;

20. Services by way of transportation by rail or a vessel from one place in India to another of the following goods -

(a)  petroleum and petroleum products falling under Chapter heading 2710 and  2711 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986);

(b)  relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap;

(c)  defence  or military equipments;

(d)  postal mail or mail bags;

(e)  household effects;

(f)   newspaper or magazines registered with the Registrar of Newspapers;

(g)  railway equipments or materials;

(h)  agricultural produce;

(i)  foodstuff including flours, tea, coffee, jaggery, sugar, milk products, salt and edible oil, excluding alcoholic beverages; or

(j)  chemical fertilizer and oilcakes;

21. Services provided by a goods transport agency by way of transportation of -

(a)  fruits, vegetables, eggs, milk, food grains or pulses in a goods carriage;

(b)  goods where gross amount charged for the transportation of goods on a consignment transported in a single goods carriage does not exceed one thousand five hundred rupees; or

(c)  goods, where gross amount charged for transportation of all such goods for a single consignee in the goods carriage does not exceed rupees seven hundred fifty;

22. Services by way of giving on hire -

(a)     to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers; or

(b)     to a goods transport agency, a means of transportation of goods;

23. Transport of passengers, with or without accompanied belongings, by -

(a)  air, embarking from or terminating in an airport located in the state of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, or Tripura or at Bagdogra located in West Bengal;

(b)  a contract carriage for the transportation of passengers, excluding tourism, conducted tour, charter or hire; or

(c)    ropeway, cable car or aerial tramway;

24. Services by way of vehicle parking to general public excluding leasing of space to an entity for providing such parking facility;

25. Services provided to Government, a local authority or a governmental authority by way of -

(a)  carrying out any activity in relation to any function ordinarily entrusted to a municipality in relation to water supply, public health, sanitation conservancy, solid waste management or slum improvement and upgradation; or

(b)  repair or maintenance of a vessel or an aircraft;

26. Services of general insurance business provided under following schemes -

(a) Hut Insurance Scheme;

(b) Cattle Insurance under Swarnajaynti Gram Swarozgar Yojna (earlier known as Integrated Rural Development  Programme);

(c) Scheme for Insurance of Tribals;

(d) Janata Personal Accident Policy and Gramin Accident Policy;

(e) Group Personal Accident Policy for Self-Employed Women;

(f)  Agricultural Pumpset and Failed Well Insurance;

(g) premia collected on export credit insurance;

(h) Weather Based Crop Insurance Scheme or the Modified National Agricultural Insurance Scheme, approved by the Government of India and implemented by the Ministry of Agriculture;

(i)  Jan Arogya Bima Policy;

(j)  National Agricultural Insurance Scheme (Rashtriya Krishi Bima Yojana);

(k) Pilot Scheme on Seed Crop Insurance;

(l)  Central Sector Scheme on Cattle Insurance;

(m) Universal Health Insurance Scheme;

(n)  Rashtriya Swasthya Bima Yojana; or

(o)     Coconut Palm Insurance Scheme;

27. Services provided by an incubatee up to a total turnover of fifty lakh rupees in a financial year subject to the following conditions, namely:-

(a)  the total turnover had not exceeded fifty lakh rupees during the preceding financial year; and

(b)  a period of three years has not been elapsed  from the date of entering  into an agreement as an incubatee;

28. Service by an unincorporated body or a non- profit entity registered under any law for the time being in force, to its own members by way of reimbursement of charges or share of contribution -

(a)  as a trade union;

(b)  for the provision of carrying out any activity which is exempt from the levy of service tax; or

(c)   up to an amount of five thousand rupees per month per member for sourcing of goods or services from a third person for the common use of its members in a housing society or a residential complex;

29. Services by the following persons in respective capacities -

(a)  sub-broker or an authorised person to a stock broker;

(b)  authorised person to a member of a commodity exchange;

(c)   mutual fund agent to a mutual fund or asset management company;

(d)  distributor to a mutual fund or asset management company;

(e)  selling or marketing agent of lottery tickets to a distributer or a selling agent;

(f)    selling agent or a distributer of SIM cards or recharge coupon vouchers;

(g)  business facilitator or a business correspondent to a banking company or an insurance company, in a rural area; or

(h)  sub-contractor providing services by way of works contract to another contractor providing  works contract services which are exempt;

30. Carrying out an intermediate production process as job work in relation to -

(a)  agriculture, printing or textile processing;

(b)  cut and polished diamonds and gemstones; or plain and studded jewellery of gold and other precious metals, falling under Chapter 71 of the Central Excise Tariff Act ,1985 (5 of 1986);

(c)   any goods on which appropriate duty is payable by the principal manufacturer; or

(d)  processes of electroplating, zinc plating, anodizing, heat treatment, powder coating, painting including spray painting or auto black,during the course of manufacture of  parts of  cycles or sewing machines upto an aggregate value of taxable service of the specified processes of  one hundred and fifty lakh rupees in a financial year subject to the condition that such  aggregate value had not exceeded  one hundred and fifty lakh rupees during the preceding financial year;

31. Services by an organiser to any person in respect of a business exhibition held outside India;

32. Services by way of making telephone calls from -

(a)  departmentally run public telephone;

(b)  guaranteed public telephone operating only for local calls; or

(c)   free telephone at airport and hospital where no bills are being issued;

33. Services by way of slaughtering of bovine animals;

34. Services received from a  provider of service  located in a non- taxable territory by -

(a)  Government, a local authority, a governmental authority or an individual in  relation to any purpose other than commerce, industry or any other business or profession;

(b)  an entity registered under section 12AA of the Income tax Act, 1961 (43 of 1961) for the purposes of providing charitable activities; or

(c)   a person located in a non-taxable territory;

35. Services of public libraries by way of lending of books, publications or any other knowledge- enhancing content or material;

      36. Services by Employees’ State Insurance Corporation  to persons governed    under the Employees’ Insurance Act, 1948 (34 of 1948);

 37. Services by way of transfer of a going concern, as a whole or an independent part thereof;

  38. Services by way of public conveniences such as provision of facilities of bathroom, washrooms, lavatories, urinal or toilets;

  39. Services by a governmental authority by way of any activity in relation to any function entrusted to a municipality under article 243 W of the Constitution.

2.   Definitions. - For the purpose of this notification, unless the context otherwise requires, –

(a) “Advocate” has the meaning assigned to it in clause (a) of sub-section (1) of section 2 of the Advocates Act, 1961 ( 25 of 1961);

(b) “appropriate duty” means duty payable on manufacture or production under a Central Act or a State Act, but shall not include ‘Nil’ rate of duty or duty wholly exempt;

(c)  “arbitral tribunal” has the meaning assigned to it in clause (d) of section 2 of the Arbitration and Conciliation Act, 1996 (26 of 1996);

 (d) “authorised medical practitioner” means a medical practitioner registered with any of  the  councils of the recognised system of medicines established or recognized by law in India and includes a medical professional having the requisite qualification to practice in any recognisedsystem of medicines in India as per any law for the time being in force;

 (e) "authorised person” means any person who is appointed as such either by a stock broker (including trading member) or by a member of a commodity exchange and who provides access to trading platform of a stock exchange or a commodity exchange as an agent of such stock broker or member of a commodity exchange;

(f) “auxiliary educational services” means any services relating to imparting any skill, knowledge, education or development of course content or any other knowledge – enhancement activity, whether for the students or the faculty, or any other services which educational institutions ordinarily carry out themselves but may obtain as outsourced services from any other person, including services relating to admission to such institution, conduct of examination, catering for the students under any mid-day meals scheme sponsored by Government, or transportation of students, faculty or staff of such institution;

(g) “banking company” has the meaning assigned to it in clause (a) of section 45A of the Reserve Bank of India Act,1934(2 of 1934);

(h) “brand ambassador” means a person engaged for promotion or marketing of a brand of goods, service, property or actionable claim, event or endorsement of name, including a trade name, logo or house mark of any person;

(i) “business facilitator or business correspondent” means an intermediary appointed under the business facilitator model or the business correspondent model by a banking company or an insurance company under the guidelines issued by Reserve Bank of India;

(j) "clinical establishment" means a hospital, nursing home, clinic, sanatorium or any other institution by, whatever name called, that offers services or facilities requiring diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India, or a place established as an independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases;

(k) “charitable activities” means activities relating to -

           (i) public health by way of -

(a)  care or counseling of (i) terminally ill persons or persons with  severe physical or mental disability, (ii) persons afflicted with HIV or AIDS, or (iii) persons addicted to a dependence-forming substance such as narcotics drugs or alcohol; or

(b)  public awareness of preventive health, family planning or  prevention of HIV infection;

            (ii) advancement of religion or spirituality;

            (iii) advancement of educational programmes or skill development relating to,-

(a)     abandoned, orphaned or homeless children;

(b)     physically or mentally abused and traumatized persons;

(c)      prisoners; or

(d)     persons over the age of 65 years residing in a rural area; 

            (iv) preservation of environment including watershed, forests and wildlife; or

(v) advancement of any other object of general public utility up to a  value of,-

(a)  eighteen lakh and seventy five thousand rupees for the year 2012-13 subject to the condition that total value of such activities had not exceeded twenty five lakhs rupees during 2011-12;

(b)  twenty five lakh rupees in any other financial year subject to the condition that total value of such activities had not exceeded twenty five lakhs rupees during the preceding financial year; 

(l) “commodity exchange” means an association as defined in section 2 (j) and recognized under section 6 of the Forward Contracts (Regulation) Act,1952 (74 of 1952);

(m) “contract carriage” has the meaning assigned to it in clause (7) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988);

(n)“declared tariff” includes charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air-conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit;

(o) “distributor or selling agent” has the meaning assigned to them in clause (c) of the rule 2 of the Lottery (Regulation) Rules, 2010 notified by the Government of India in the Ministry of Home Affairs, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (i), vide number G.S.R. 278(E), dated the 1st April, 2010 and shall include distributor or selling agent authorised by the lottery- organisingState;

(p) "general insurance business" has the meaning assigned to it in clause (g) of section 3 of General Insurance Business (Nationalisation) Act, 1972 (57 of 1972);

(q)“general public” means the body of people at large sufficiently defined by some common quality of public or impersonal nature;

(r)“goods carriage” has the meaning assigned to it in clause (14) of section 2 of the Motor  Vehicles Act, 1988 (59 of 1988);

(s) “governmental authority’’ means a board, or an authority or any other body established with 90% or more participation by way of equity or control by Government and set up by an Act of the Parliament or a State Legislature to carry out any function entrusted to a municipality under article 243W  of the Constitution;  

(t) “health care services” means any service by way of  diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India and includes services by way of transportation of the patient to and from a clinical establishment, but does not include hair transplant or cosmetic or plastic surgery, except when undertaken to restore or to reconstruct anatomy or functions of body affected due to congenital defects, developmental abnormalities, injury or trauma;

(u) “incubatee” means an entrepreneur located within the premises of a Technology Business Incubator (TBI) or Science and Technology Entrepreneurship Park (STEP) recognised by the National Science and Technology Entrepreneurship Development Board (NSTEDB) of the Department of Science and Technology, Government of India and who has entered into an agreement with the TBI or the STEP to enable himself to develop and produce hi-tech and innovative products;

(v)“insurance company” means  a company carrying on life insurance business or general insurance business;

(w)“legal service”  means any service provided in relation to advice, consultancy or assistance in any branch of law, in any manner and includes representational services before any court, tribunal or authority;

(x)“life insurance business” has the meaning assigned to it in clause (11) of section 2 of the Insurance  Act, 1938 (4 of 1938);

(y) “original works” means  has the meaning assigned to it in Rule 2A of  the Service Tax (Determination of Value) Rules, 2006;

(z) “principal manufacturer” means any person who gets goods manufactured or processed on  his account from another person;

(za) “recognized sports body” means - (i) the Indian Olympic Association, (ii) Sports Authority of India, (iii) a national sports federationrecognised by the Ministry of Sports and Youth Affairs of the Central Government, and its affiliate federations, (iv) national sports promotionorganisations recognised by the Ministry of Sports and Youth Affairs of the Central Government, (v) the International Olympic Association or a federation  recognised by the International Olympic Association or (vi) a federation or a body which regulates a sport at international level and its affiliated federations or bodies regulating a sport in India;

(zb) “religious place” means a place which is primarily meant for conduct of prayers or worship pertaining to a religion, meditation, or spirituality;

(zc) “residential complex” means any complex comprising of a building or buildings, having more than one single residential unit;

(zd)“rural area” means the area comprised in a village as defined in land revenue records, excluding-

the area under any municipal committee, municipal corporation, town area committee, cantonment board or notified area committee; or

any area that may be notified as an urban area by the Central Government or a State Government;

(ze)“single residential unit” means a  self-contained residential unit which is designed for use, wholly or principally, for residential purposes for one family;

(zf) "specified international organization" means an international organization declared by the Central Government in pursuance of section 3 of the United Nations (Privileges and Immunities) Act, 1947 (46 of 1947), to which the provisions of the Schedule to the said Act apply;

(zg)"state transport undertaking" has the meaning assigned to it in clause (42) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988);

(zh)"sub-broker" has the meaning assigned to it in sub-clause (gc) of clause 2 of the Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations, 1992;

(zi) “trade union” has the meaning assigned to it in clause (h) of section 2 of the Trade Unions Act,1926(16 of 1926).

3. This notification shall come into force on the 1^st day of July, 2012.

 [F. No.334/1/2012 -TRU]

(Rajkumar Digvijay)

Under Secretary to the Government of India

Deduction u/s. 10B wrongly claimed instead of deduction u/s. 10A, claimed in revised return shall be allowed held ITAT Hyderabad Bench

Summary: Instead of claiming deduction u/s. 10A assessee claimed deduction U/s. 10B-the deduction u/s. 10A was claimed in the revised return- A.O. Disallowed the deduction u/s.10A by stating that, the deduction be only allowed when claimed in the original income tax return- Hon'ble ITAT Hyderabad Bench held that assessee claimed wrong deduction u/s. 10B instead of deduction u/s. 10A -filed Return of income within due date- hence the deduction claimed u/s. 10A cannot be denied when claimed in the revised return

IN THE ITAT HYDERABAD BENCH 'A'

VNS Makro Technologies (P.) Ltd.

vs.

Deputy Commissioner of Income-tax, Circle-3(3), Hyderabad*

CHANDRA POOJARI, ACCOUNTANT MEMBER

AND SAKTIJIT DEY, JUDICIAL MEMBER

IT APPEAL NO. 577 (HYD.) OF 2012

[ASSESSMENT YEAR 2008-09]

JUNE 8, 2012

ORDER

Saktijit Dey, Judicial Member - This appeal by the assessee is directed against the order dated 22-3-2012 passed in ITA No.432/DCIT-3(3)/CIT(A)-IV/10-11 pertaining to the assessment year 2008-09.

2. The assessee has raised the following grounds before us:-

"(i)  The order of the CIT (A) treating the revised return filed u/s 139(5) as that of sec. 139(4), rejecting the claim on the ground, as no such claim was made u/s 139(1), which is not a prerequisite for sec. 139(5), is erroneous in law, contrary to the facts, probabilities of the case and against the principles of equity and natural justice.

(ii)  The CIT (A) relying on the irrelevant case law, also alleging that there is an amendment to section 139(4) w.e.f. 1-4-2006 ignoring the fact that the return filed u/s 139(5) i.e., revised return within due date claiming relief u/s 10A which was wrongly claimed u/s 10B in the return filed u/s 139(1), which is totally unjustified and unwarranted both in law and facts.

(iii)  Subject to the above, the appellant submits that for other issues, relied by the AO, furnished substantial material documentary evidence in support, that no relationship whatsoever nature and manner exist between the appellant and the exporter in considering the relief u/s 10A.

(iv)  The appellant crave to submit that all the contentions, facts and case laws mentioned in the statement of facts, shall be treated as part and parcel of these grounds and shall be dealt with."

3. Facts of the case, in brief, are that the assessee is engaged in Software export and is a 100% EOU registered with STP. For the assessment year under dispute i.e. 2008-09 the assessee filed its return within the due date declaring a total income of Rs. 62,40,790/- after claiming deduction of Rs. 2,18,19,831 u/s 10B of the Act. Subsequently, the assessee finding that it has wrongly claimed deduction/s 10B instead of u/s 10A of the Act, filed a revised return u/s 139(5) on 19-2-2010 declaring an income of Rs. 38,16,365/- after claiming exemption u/s 10A of the IT Act. In course of assessment proceedings u/s 143(3) the assessee explained before the AO that in the original return, the assessee has wrongly claimed deduction u/s 10B because of the fact that the assessee's claim of deduction u/s 10B had been accepted by the department up to the assessment year 2006-07. Subsequently when the assessee became aware of the fact that it is entitled for exemption u/s 10A and not u/s 10B, revised return has been filed within due date claiming exemption u/s 10A. The AO while completing the assessment, disallowed the claim u/s 10A on the ground that the proviso to section 10A of the Act requires a deduction u/s 10A to be claimed in the return filed u/s 139(1), the assessee having not claimed the deduction u/s 10A in the return filed u/s 139(1) of the IT Act the claim made in the revised return cannot be accepted. The AO had further observed that the assessee company has received technical know from its associated enterprise without any payment resulting in high exempted income, the assessee has failed to make the transaction at arms length price, the assessee failed to prove any services exported or rendered, the assessee has shown abnormally high profit.

4. Being aggrieved by the assessment order, the assessee filed an appeal before the CIT (A). Before the CIT (A), the assessee reiterated its stand taken before the AO and contended that the assessee having filed the revised return within the due date claiming deduction u/s 10A, it should have been allowed. The CIT (A) rejected the assessee's contention on the ground that the assessee having not made a claim of deduction u/s 10A in the return filed u/s 139(1), the claim of deduction in the revised return cannot be allowed in view of the proviso to section 10A of the Act. As the CIT (A) held against the assessee, this issue only be did not adjudicate the other grounds raised on the merits of disallowance. For the sake of convenience, the relevant portion from the order of the CIT (A) is extracted hereunder:-

"6.1 So far the claim of deduction u/s 10A is concerned, it is seen that as per the proviso below sec. 10A(1A), no deduction u/s 10A shall be allowed to an assessee who does not furnish a return of income on or before the due date specified under sub sec.(1) of section 139. In the case of the present appellant, however, o deduction at all was claimed u/s 10A in the return filed u/s 139(1). It was only in the revised return filed in terms of the provisions of sec. 139(4) that the appellant filed such claim. Accordingly, it cannot be said that the appellant's claim in accordance with the proviso stated above, which was inserted w.e.f. 1-4-2006. It is also clear that a return filed u/s 139(4) does not stand on the same footing, as that of a return filed u/s 139(1). Even though in the decisions like that of the Hon'ble Guwahati High Court in the case of CIT v. Rajesh Kumar Jalan (286 ITR 274) or that of the Hon'ble High Court in the case of CIT v.Jagruti Agarwal (203 Taxman 203), it has been held that for the purpose of sec. 54, the due date for finishing of return of income u/s 139 automatically gets extended by the period prescribed u/s 139(4), it is clear that the said view has been taken only in respect of sec. 54. On the other hand, it is seen that the Honble Amritsar Bench of ITAT in the case of Bal Kishan Dhawan, HUF v. ITO (2011 TMI 211498-ITAT-Amritsar) in ITA No.235-236 (ASWR) of 2011 dtd. 16-12-2011, making such distinction, have held that having not claimed deduction u/s 80IB in the return filed u/s 139(1) in view of the provisions of sec. 80 IB in the return filed u/s 139(1) in view of the provisions of sec. 80AC, an assessee would not be entitled to claim such deduction in the return filed u/s 139(4). It is seen that the proviso to sec. 10A mentioned above is similar to the provisions of sec. 80AC. Accordingly, it is clear that the appellant cannot be allowed deduction u/s 10A on the basis of the claim made in the revised return filed u/s 139(4) of the Act."

5. The learned AR contended before us that up to the assessment year 2006-07, the assessee was all along claiming deduction u/s 10B and the department was also allowing the assessee's claim of deduction u/s 10B only. For the assessment year 2006-07, the order passed u/s 143(3) allowing exemption u/s 10B was set aside by the CIT (A) by invoking his jurisdiction u/s 263 of the IT Act and directing the assessee to disallow the claim of deduction u/s 10B as the assessee is not entitled to such claim. The assessee being aggrieved by the order passed under section 263, filed an appeal before the ITAT. The ITAT, Hyderabad Bench disposed of the appeal by an order dated 5-8-2001 in ITA No. 870/Hyd/11 directing the assessing officer to consider the assessee's claim of deduction u/s 10A. Identical issue again cropped up for assessment year 2007-08 and the dispute again came before the ITAT, Hyderabad Bench. The ITAT, Hyderabad Bench in ITA No.1057/Hyd/10 directed the AO to consider the assessee's claim of deduction u/s 10A of the Act.

6. The learned DR, on the contrary, referring to the reasoning given by the CIT (A) in para 6.1 of his order justified the disallowance of claim made by the assessee in the revised return.

7. We have heard rival contentions of the parties and perused the materials available on record. It is apparent from the order of the CIT (A) that the reason behind disallowance of claim made by the assessee since the assessee has not claimed deduction u/s 10A in the return filed u/s 139(1), the proviso to section 10A debars him from making any such claim in revised return. At this stage, it will be relevant to take note of the proviso under section 10A which is extracted hereunder:-

"Provided that no deduction under this section shall be allowed to an assessee who does not furnish a return of his income on or before the due date specified under sub-section (1) of section 139."

8. A reading of the aforesaid proviso makes it clear that requirement for claiming deduction u/s 10A of the Act, filing of a return of income on or before the due date specified under sub-section (1) of section 139. In the present case, there is no dispute to the fact that the assessee has filed a return of income u/s 139(1) within the due date claiming deduction u/s 10B. Therefore, the reasoning of the CIT (A) that the proviso to section 10A operates as a bar in allowing deduction claimed in the revised return is not a correct interpretation. It is a fact on record that the assessee up to the assessment year 2006-07 was claiming deduction u/s 10B and the department was allowing the same even under scrutiny assessments. It was only in the assessment year 2006-07 after the CIT set aside the order passed u/s 143(3) directing the AO to disallow the claim of deduction u/s 10B that the assessee is claiming deduction u/s 10A of the Act. It is also a fact that the ITAT in assessee's own case for assessment year 2006-07 directed the AO to consider the assessee's claim for deduction u/s 10A by observing in following manner:-

"We have considered the rival submissions and have perused the order of the CIT passed u/s 263 of the Act. We find that the assessee has claimed deduction u/s 10B of the Act, which was allowed by the assessing officer without making further enquiries with regard to allowability thereof. Accordingly, the order of the assessing officer could be interfered with by the CIT u/s 263 of the Act. However, the CIT should have remanded the matter to the file of the assessing officer with a direction to consider the claim of the assessee that there was no difference between s. 10A and S.10B and the deduction u/s 10A was allowable to the assessee on the basis of the material available on record. In these facts of t he case we hold that it be justified to modify the order of the CIT passed u/s 263 to the effect that the assessment is set aside to the file of the assessing officer with a direction to reframe the assessment de novo in accordance with t law and to adjudicate the issue of deduction allowable to the assessee, after providing reasonable opportunity of hearing to the assessee and the assessee shall be at liberty to claim deduction under some other provision of law, which shall be decided by the assessing officer on merits thereof. We direct accordingly."

For the assessment years 2007-08 also the ITAT directed the AO to consider the assessee's claim u/s 10A by observing in the following manner:-

"10. We have heard both the parties and perused the materials available on record. The contention of the assessee's counsel is that the assessee is 100% EOU entitled for exemption u/s 10A and wrongly claimed the deduction u/s 10B and it was a technical mistake in claiming deduction u/s 10B. The assessee's counsel further argued that the assessee has fulfilled all the requirements of provisions of section 10A. However, this claim of the assessee not examined by the lower authorities and they stick to one contention that the assessee claim u/s 10B is not allowable. We are agreeing with the department that the condition for allowance of deduction u/s 10A and 10B are stood on different footing. However, the department cannot thrust upon the assessee to avail deduction u/s 10B only. If the assessee entitled for deduction u/s 10A instead of 10B, that claim required to be examined by the assessing officer in all fairness. The issue of allowance of deduction u/s 10A though assessee made a claim before the lower authorities has not examined by the assessing officer. In the facts and circumstances of the case, we are of the considered opinion that it shall be in the interest of justice to set aside the issue in the grounds of appeal of the assessee to the file of assessing officer with a direction to decide the issue in accordance with law after providing reasonable opportunity to the assessee, and also to give a specific finding whether the assessee is entitled to deduction u/s 10A of the Act or not. The assessee may file any evidence in support of its claim for deduction before the assessing officer. We make it clear that our observations herein above shall not have any bearing on the decision of the assessing officer with regard to the merits of the claim of the assessee for deduction u/s 10A of the Act. We direct accordingly."

Therefore, keeping in view the orders of the ITAT for the earlier assessment years 2006-07 and 2007-08, directing the AO to consider assessee's claim for deduction u/s 10A we think it proper to restore the matter back to the file of the AO directing him to consider assessee's claim of deduction u/s 10A after examining the materials available before him and allow such deduction if the assessee is legally entitled to. The AO shall afford a reasonable opportunity of being heard to the assessee before assessment order is passed.

9. In the result, the appeal filed by the assessee is treated as allowed for statistical purpose.

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