COMISSIONER OF INCOME TAX Vs. EASTERN MEDIKIT LTD

JUDGEMENT

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

(2.) Learned counsel for the parties were ready to argue the matter, immediately after the admission. The arguments were heard on the aforesaid questions of law and orders reserved. By this judgment, we proceed to answer the aforesaid questions.

(3.) We would like to comment at the outset that all the three questions touch one issue, viz., validity of the order passed by the Commissioner of Income Tax (hereinafter referred to as the CIT) under Section 263 of the Income Tax Act (for brevity the Tax) whereby the CIT has asked the Assessing Officer (AO) to go into the question as to whether the assessee company had commenced its operation in the Financial Year 1994-95 and therefore, the Assessment Year 1995-96 was the first year to claim deduction under Section 80IB of the Act and on that basis, whether deduction would be admissible for the Assessment Year 2005-06. This issue has cropped up in the following factual background.