COMMISSIONER OF INCOME TAX Vs. NATIONAL AGRICULTURAL CO OPERATIVE MARKETING FEDERATION OF INDIA LIMITED

JUDGEMENT

(1.) The Income-tax Appellate Tribunal, New Delhi has referred at the instance of the Revenue the following question of law (relating to the assessment year 1979-80) for the opinion of the High Court :

(2.) The assessee is a co-operative society and amongst other activities also exports some agricultural products. Before the Tribunal the controversy centred around the assessee's claim for allowance of weighted deduction under Section 35B of the Income-tax Act, 1961 in respect of inspection fees. The assessee was having arrangement with certain parties who were provisionally qualified for the purpose of inspection of goods meant for export. The submission of the assessee was that under Section 35B(1 )(b)(ix) it was provided that weighted ded uction was allowable on such export promotional activities as may be prescribed. Rules were framed and made effective from 1.8.81 prescribing such activities. Inasmuch as the assessment proceedings had not yet achieved the finality as the appeal was pending before the ITAT when the Rules came into force, the benefit of the Rules was available to the assessee. It was also submitted that once the rule was framed the benefit thereof would be available to the assessee by reference to the date by which the main provision in the statute itself had existed.On behalf of the Revenue,it was submitted that Rule 6AA came into force w.e.f. 1.8.1981 and therefore, the assessee could not claim weighted deduction by relyingon the rule fora period anterior to 1.8.1981 and retroactively extending its applicability thereto.

(3.) The Tribunal agreed with the assessee. Videpara4, the Tribunal has opined: