Income-tax Act, 1961 — Section 10A, section 155(11A) — Once the assessee has complied with all formalities and the request of the assessee for extension of time is not rejected, it could be presumed that after reasonable time, the extension of time has be

For A.Y. 2003-2004 (for A.Y. 2004-05 facts were identical and
hence not given here). The assessee-company, engaged in the business of
providing software development and call-centre services, had set up units at
Mumbai and Pune which were registered as Software Technology Park (STP units).
In respect of these units, the assessee was eligible for exemption u/s.10A. For
A.Y. 2003-04, the assessee filed return of income on 25-11-2003 declaring a
total income of Rs.3,89,69,030 after claiming relief u/s.10A amounting to
Rs.8,46,49,114. While computing the claim u/s.10A the assessee had considered
unrealised export revenue of Rs.14,44,50,338 as part of export turnover. Out of
Rs total unrealised export proceeds of Rs.14,44,50,338 an amount of
Rs.6,72,97,027 was realised subsequent to 30th September, 2003 till the
completion of the assessment. The balance unrealised export proceeds of
Rs.7,71,53,311 were not considered by the AO as part of export turnover while
calculating deduction u/s.10A on the ground that the assessee had not been able
to furnish the approval of the competent authority granting extension of time.

Aggrieved the assessee preferred an appeal to the CIT(A) and
contended that in view of the ratio of the Mumbai Bench of the ITAT in the case
of Morgan Stanley Advantage Services (P) Ltd. v. ITO, 30 SOT 1, approval
for extension shall be deemed to have been granted if communication
accepting/rejecting the application was not received after a reasonable time and
in view of the provisions of section 155(11A), the order passed by AO needs to
be rectified by considering the export proceeds realised by the assessee as
export turnover. The CIT(A) did not adjudicate upon the first contention and
rejected the second contention on the ground that the assessment years under
consideration are for a period prior to insertion of section 155(11A).

Aggrieved the assessee preferred an appeal to the Tribunal.

The Tribunal noted that the assessee complied with all the
formalities and had applied for extension to competent authority vide letters
dated 2-9-2003 and 5-11-2003. It held that once the assessee has complied with
all formalities and the request of the assessee for extension of time is not
rejected, it could be presumed that after reasonable time, the extension of time
has been granted in respect of the amount realised and brought into India in
convertible foreign exchange. It observed that section 155(11A) was introduced
to enable rectification of assessments. It held that section 15(11A) is a
provision which permits amendment of assessments already completed due to
subsequent developments taking place and power was given to the AO to carry out
such amendments w.e.f. 13-7-2006. The Tribunal held that in the view nature of
things, this date (13-7-2006) cannot refer to any particular assessment year and
the power having been conferred upon the AO from this date, the assessment for
any assessment year can be amended provided the assessee applies within a period
of four years from the end of the previous year in which the export proceeds are
received in India. The Tribunal noted the findings of the Bangalore Bench of the
ITAT in the case of Nous Info-systems (P) Ltd. v. ACIT, (2009 TIOL 14
ITAT-Bang.).

The Tribunal remitted the matter back to the AO to determine
the amount realised in convertible foreign exchange and to grant the benefit of
deduction in respect of the sum so realised and recomputed the deduction u/s.10A
of the Act.