My client is a 100% EOU registered with STPI. They have been claiming deduction u/s 10B of Income Tax Act. The Income Tax department is disallowing their claim on following grounds:

- The unit is not registered with the Board
- STPI units can only claim deduction u/s 10A
- They can't revise the return to claim deduction u/s 10A at the time of scrutiny

Can they now claim deduction u/s 10A instead of 10B? If yes, what will be the procedure? Could anyone provide some case citations?

I THINK THERE IS SOME CONFUSION IN YOUR QUERY, AS I AM SURE THAT 100% EOU STATUS IS AWARDED TO THE UNITS SITUATED OUTSIDE THE BOUNDARIES OF SEZ/STPI ETC. AND THE SAME ARE COVERED BY SECTION 10B ITSELF NOT BY SECTION 10A..

SECONDLY APPROVAL FROM BOARD IS MEANT FOR APPROVAL FROM STPI BOARD OF APPROVAL NOT CBDT AND WITHOUT STPI APPROVAL NOBODY COULD SAY THE UNDERTAKING AS 100% EOU...

I HAVE GOT COMPLETED A NUMBER OF 100% EOU SECRUTINY CASES..

IF THERE IS ANY CONFUSION ASK ME FURTHER IN THIS REGARD..

Thanks Nisha.

The unit acquired a 100% Software Development EOU status after registering with STPI. An STP may be an individual unit by itself or it may be one of such units located in an area designated as STP Complex by the Department of Electronics. I've confirmed with STPI and they should have claimed exemption u/s 10A. The units clamining exemption u/s 10B should be registered with the Board appointed by the Central Government u/s 14 of the Industries Development and Regulation Act, 1951.

Therefore, the unit now wants to claim exemption u/s 10A as it has been denied by the ITO u/s 10B.

Is there a circular/notification from CBDT that directs the ITO to allow the assessee to claim exemption under an alternative section if he has missed his rightful claims/concessions while filing his tax returns in first instance?

This case is for the AY 2008-09.

shri Rajnish Gupta ji

Please refer CBDT Instruction No.1/2006 dated 31.3.06 .Hope, thisinstruction will help you

Respected Nisha,

Do you have any judgment where deduction under section 10B is granted to unit registered under STPI as 100% EOU unit and doesn't have approval from board of approval. 

Is STPI registered unit is entitled to get income tax benefit under section 10B without any further approval from Development commissioner/Board for approval? We have approval from Director, STPI who has been delegated powers of development commissioner.

Please help ASAP.  thanks a lot.

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No. 156 of 2007
DATE OF DECISION : 24.07.2008 Commissioner of Income Tax, Chandigarh-II Vs
M/s Excel Softech Ltd., H. No. 1257, Sector 37B, Chandigarh
 

Please see this Case - A STPI Unit has claimed exemption under Section 10B

Sir, what happened in ur case ? do u received claim u/s 10B ? if yes How?

we have got exemption u/s 10B for three consecutive years for our 100% EOU.. it was A/y 2005-06, 2006-07, 2007-08.