TMI Blog2009 (7) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... loss was not allowed to be carried forward to the subsequent assessment years, as the assessee company, a 100 per cent export oriented unit (EoU) was enjoying the benefits of s. 10B of the Act, and before making the claim for the carry forward of loss determined on assessment, the assessee has not complied with the statutory requirements necessary for opting out of the benefits of provisions of s. 10B. 3. In first appeal, the CIT(A) agreed with the assessing authority that the necessary conditions of exit were not satisfied by the assessee company and by virtue of that failure on the part of the assessee company, it continued to be an EoU benefited by s. 10B of the Act. As per the scheme of s. 10B, the benefit of carry forward would not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commr. is the authority to approve the status of an assessee as an EoU and the said authority has approved the proposal for debonding as sought for by the assessee w.e.f. 17th March, 1999. Even though the formal and final order was given only on 21st Oct., 1999, the final order given by the competent authority debonding the status of the assessee from EoU, dates back to the permission sought for by the assessee and the debonding is valid right from the date the application for debonding was made. In that way, the previous year relevant to the impugned assessment year is covered by the debonding order of the competent authority. Therefore, the withdrawal of the benefits available under s. 10B by the IT Department is only a statutory conseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., Cochin Export Processing Zone (CEPE). Opting out of the scheme of s. 10B is again the product of debonding of assessee's status by the same authority, the Development Commr. of CEPZ. 9. It is true that the assessee has not filed the declaration before the assessing authority as required under s. 10B(8) before the due date of filing of the return conveying the intention of the assessee to opt out of s. 10B. But, in the course of assessment proceedings, when this matter was pointed out to the assessee company, the assessee had filed a detailed reply enclosing a copy of the provisional order of debonding issued by the Development Commr., CEPZ, stating that the assessee company has been debonded and does not enjoy the status of 100 per cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he declaration under s. 10B(8) is substantially a procedural law which should not be permitted to topple the factual state of affairs of a case. The debonding order issued by the Development Commr. is the soul and substance of the issue. That order is the decisive factor in determining whether the assessee is coded or decoded into or out of s. 10B. Filing of the declaration by an assessee is only a re-enforcing procedural matter to be complied with and in that way an enabling provision. The Hon'ble Supreme Court in the case of ACED vs. Prayag Dass Agarwal (1981) 22 CTR (SC) 118 : (1981) 129 ITR 404 (SC) has held that enabling provisions of taxing statutes are ordinarily permissive only. 11. If for any valid reason such a declaration was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sections. The basic principles in this regard have been laid down by the Privy Council in the case of Punjab Co-operative Bank Ltd. vs. CIT (1940) 8 ITR 635 (PC). The Privy Council has observed that an absolute enactment must be obeyed or fulfilled exactly, but it is sufficient if a directory enactment be obeyed or fulfilled satisfactorily. There is no doubt regarding the character of s. 10B(8) that it is in the nature of a directory enactment so as to enable an assessee to opt out of a beneficial scheme enjoyed in the earlier assessment years. Procedural law, as filing of declaration, is generally in the nature of directory statute. 13. It is useful in these circumstances to go through certain profound judicial pronouncements relevant i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ably and in favour of the assessee. Generally speaking there is no vested right in procedures. The Supreme Court in the case of Sreenath vs. Rajesh AIR 1998 SC 1827 has observed that in interpreting any procedural law, where more than one interpretation is possible, the one, which curtails the procedure without eluding the justice, is to be adopted. The procedural law is always subservient to and is in aid to justice. Any interpretation, which eludes or frustrates the recipient of justice, is not to be followed. 14. Therefore, in the facts and circumstances of the case, we find that the assessee has to be held as opted out of the benefit of s. 10B in the previous year 1998-99 relevant to the impugned asst. yr. 1999-2000. The assessee is d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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