PRAVEEN SONI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This appeal was admitted on the following substantial questions of law:

(2.) These questions have arisen in the following factual backdrop. The Appellant (hereinafter referred to as "the Assessee?) herein is an individual who is running his proprietorship concern under the name and style of M/s Ragnik Exports. This concern is engaged in business of manufacturing and exports of readymade garments. To manufacture these garments for the purpose of exports, the Assessee started to manufacture articles from 01.07.1997. The Assessee could avail the benefit of Section 80IB of the Income Tax Act (for brevity "I.T. Act?) from the date of manufacture of these articles, i.e., Assessment Year 1998-99, which was the first year of the Assessee's manufacture, the Assessee did not claim the deduction under the said provision in that assessment year. Obviously, since this claim was not raised in that assessment year, it could not be examined as to whether the Assessee fulfilled the conditions prescribed in Section 80IB of the Act for claiming exemption under the said provision. The Assessee did not claim this benefit even in few succeeding years. Section 80IB of the Act further provides that once an industrial undertaking which fulfils the condition stipulated therein gets the benefit, the same is available for 10 successive assessment years. The Appellant claimed benefit under the aforesaid provision for the first time in the assessment year in question, i.e., Assessment Year 2004-05. On course, at the same time, the Appellant pleaded that even if the Appellant had not claimed this benefit for the past years, it should be allowed to him from 2004-05 till the remaining period of 10 years, i.e., upto 2007-08. This was on the premise that had the claim been allowed and given in the Assessment Year 1998-99, the Assessee would have been entitled to the same for a period of 10 years, i.e., Assessment Year 2007-08. While claiming the benefit of the aforesaid provision, the Assessee also filed requisite documents including Form 10CCB to demonstrate that the Assessee was investor undertaking which could fulfil conditions stipulated in the said provision.

(3.) The Assessing Officer (AO) took note of the report in Form 10CCB and also further details and funds provided by the Assessee in support of his claim vide letter dated 15.12.2006. However, the claim was denied on the ground that the Assessee had not availed the same in the first year in question, i.e., Assessment Year 1998-99. The AO also opined that the small scale industrial undertaking has been denied the benefit under Section 80IB(14)(g) of the I.T. Act and having regard to the said provisions, it should have been registered as a small scale industrial unit in order to claim the status of SSI Unit. Since it was not so registered under the provision of Industries (Development and Regulations) Act, 1951 (hereinafter referred to as the "IDR Act?), the Assessee was not entitled to claim the benefit under Section 80IB of the I.T. Act.