[Praveen Soni v. CIT, 333 ITR 324 (Del)]
The assessee was engaged in the business of manufacturing and exports of readymade garments. For the first time the assessee claimed deduction u/s. 80-IB in the A.Y. 2004-05 pleading that even if he had not claimed the benefit for the past years, it should be allowed to him from A.Y. 2004-05 for the remaining period of 10 years, i.e., up to A.Y. 2007-08. The Assessing Officer denied the benefit on the ground that the assessee had not availed the deduction in the first year in question, i.e., A.Y. 1998-99. The Assessing Officer also held that since the assessee was not registered as a small-scale industry under the provisions of the Industries (Development and Regulation) Act, 1951 the assessee was not entitled to claim the benefit u/s.80-IB of the Act. The Tribunal upheld the decision of the Assessing Officer.
On appeal by the assessee, the Delhi High Court reversed the decision of the Tribunal and held as under:
“(i) Merely because though the assessee was eligible to claim the benefit, he did not claim it in that year that would not mean that he would be deprived from claiming this benefit till the A.Y. 2007-08, which was the period for which his entitlement would accrue. The provisions contained in section 80-IB of the Act nowhere stipulated any condition that such a claim had to be made in that first year, failing which there would be forfeiture of such claim in the remaining years.
(ii) It was not the case of the assessee that he should be allowed to avail of the claim for 10 years from A.Y. 2004-05. The assessee had realised his mistake in not claiming the benefit from the first assessment year, i.e., A.Y. 1998-99. At the same time, the assessee forwent the claim up to the A.Y. 2003-04 and was making the claim only for the remaining period. There was no reason not to give the benefit of the claim to the assessee if the conditions stipulated u/s.80-IB of the Act were fulfilled.
(iii) The registration under the 1951 Act would be of no consequence for availing of the benefit u/s.80-IB of the Act. Clause (g) of sub-section (14) of section 80-IB of the Act only mandates that such an industrial undertaking should be regarded as small-scale industrial undertaking u/s.11B of the 1951 Act.
(iv) Thus, insofar as extending the provisions of section 80-IB of the Act was concerned, the only aspect which was relevant was whether the conditions stipulated under Notification issued u/s.11B of the 1951 Act for regarding it as small-scale industrial undertaking were fulfilled or not. There was no dispute that the assessee fulfilled the eligibility conditions prescribed u/s.80-IB of the Act and was to be regarded as small-scale industrial undertaking.
(v) The Assessing Officer was directed to give the benefit of deduction claimed by the assessee u/s.80-IB of the Act for the A.Y. 2004-05.”
