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TMI Blog2014 (4) TMI 929X X X X Extracts X X X X X X X X Extracts X X X X ..... B of the Income Tax Act, 1961 (for short the Act) and in view of sub-section (5) of section 80HHE of the Act, no deduction under any other provisions of the Act can be allowed once deduction is claimed u/s 80HHE of the Act. The DR further contended that the assessee had commenced business from AY 1992-93 and hence there was no reason for claim of deduction u/s 10B of the Act for the year under consideration i.e. 2005-06 because the period of 10 years was over by AY 2001-02. The DR also contended that the assessee claimed deduction u/s 10B of the Act being a 100% EOU computer software company in STP to the extent of Rs. 5,88,28,278 but it was also observed that the assessee had claimed deduction u/s 80HHE of the Act in earlier years. The DR pointed out that the assessee had no cogent reason to switch over to deduction from section 80HHE of the Act to section 10B of the Act. The DR vehemently contended that the act of switch over of the assessee from deduction u/s 80HHE of the Act to section 10B of the Act was not an incidental or normal act but the same has been done with a specific motive to claim excess deduction to avoid payment of tax. Placing reliance on the decision of Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2001-02, which is well within 10 years. Therefore, the unit of the assessee cannot be denied the said exemption on the ground that it is not the newly established undertaking in the assessment year in question. In our view, the words "newly established undertaking" are only to identify the initial year of the period of 10 years for which the assessee is eligible for claim of exemption under Section 10B of the Act. Section 10B (1) of the Act does not use the words "newly established undertaking". Only in the heading, the words "newly established hundred per cent export-oriented undertakings" have been mentioned. It is well settled law that headings or titles prefixed to sections or group of sections can be referred to in construing an Act of the legislation, only when the enacting words are ambiguous, but when the language of the section is clear, then the heading cannot be used to give a different effect to clear words in the section. In our view, there is no ambiguity in section 10B of the Act, which provides exemption to certain newly established hundred per cent exportoriented undertakings, on fulfilling certain conditions, for a period of ten consecutive assessment years. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anted by the Secretariat for Industrial Approvals (EOU Section) along with other connected correspondence and Press Notes etc. It was submitted by the appellant that in all the earlier asstt. years the claim of the appellant was accepted by the assessing officer after proper verification of all the necessary documents and therefore, it was under bona fide belief that since the necessary certificates etc. have already been examined by the AO in the initial years of claim, there was no necessity to file the same again. However, the Auditors' certificate in Form 560 was duly filed. It is, therefore, argued that if the assessing officer had any doubts about the approvals etc., he could have asked the appellant to file the same. However, according to the appellant, the Assessing Officer was not justified to deny its legitimate claim in such arbitrary manner. It is, therefore, argued that the appellant was prevented by sufficient cause from producing the copy of approvals etc. granted by the Secretariat for Industrial Approvals(EOU Section) in as much as the assessing officer did not give any opportunity to it to file such documents before him. 3.2 I have given a carefu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and on a perusal of the documents placed before me, I find that the assessing officer was not justified in rejecting the assessee's claim u/s 10B of the Act. On a close reading of the assessment order, I find that the assessing officer has not assigned any reasons for taking a view which was apposed to the view taken by his predecessors in earlier years in identical fact situations. I am fully aware of the fact that strictly speaking, rule of res judicata does not apply to income-tax proceedings and every assessment year is a separate unit and what is decided in one year may not be necessarily followed in the following years. However, when the assessing officer himself has taken a view after examination of relevant facts in a particular year and that decision of the AO has not been brought into question by any of his supervisory/reviewing authority, it is expected that in normal course that decision of the predecessor must be respected and followed otherwise we will be creating a chaotic situation which may shaken the taxpayers' faith in the system. While writing this, I am guided and supported , apart from others, by the land mark judgment of the apex court the case of Rad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns by directing the Assessing Officer to grant exemption u/s 10B of the Act to the assessee with following operative para of the impugned order:- "In the case of the assessee, neither the period of five years nor the block period of eight years expired when the amendment replacing the word 'ten' for 'five' was introduced by IT (Second amendment) Act, 1998 w.e.f. 1- 4-1999. Since the assessee was entitled to exemption in the year in which amendment became effective & operative, the assessee will be entitled to the extended period of exemption because the period of five years had not exhausted up to assessment year 1999-2000. Since the right of the assessee was continuing in the year of amendment and was not lost on the date when the amendment came into existence, the view taken by the Ld.CIT(A) cannot be upheld. So far as the objections of the Ld.CIT(A) regarding conduct of the assessee firm in not claiming the exemption in earlier year is concerned, the approach of the Ld.CIT(A) raising this objection, cannot be legally justified because if the assessee is entitled to any benefit under any statutory provision then the past conduct cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... versity, ambiguity, perversity or any other valid reason to interfere with the findings of the Commissioner of Income Tax(A). Per contra, we clearly observe that the Assessing Officer ignored this fact that the assessee's 100% EOU was established in AY 1997- 98 related to AY 1998-99. The Assessing Officer denied exemption on surmises and conjectures by taking hyper technical approach. Since the assessee was entitled to exemption u/s 10B of the Act, then the period cannot be said to be exhausted in the year under consideration, hence we uphold the findings of the Commissioner of Income Tax(A) in the impugned order. Accordingly, ground no.2 of the revenue is dismissed. Ground No.3 9. Apropos ground no.3, ld. DR submitted that the Assessing Officer rightly observed that the professional receipts as per TDS certificates were to the extent of Rs. 8,59,730/- in the accounts but it has been taken at Rs. 8,02,136. Therefore, in the absence of any evidence to substantiate the claim, the sum of Rs. 57,594 was rightly added to the total income as suppression of receipt. The ld. DR submitted that the Commissioner of Income Tax(A) has considered certain evidence while granting relief to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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