TMI Blog2016 (9) TMI 1578X X X X Extracts X X X X X X X X Extracts X X X X ..... to year, till the stipulated period expires, the assessee is entitled to claim the said deduction under section 80I. Grant of deduction disturbed in assessment year 1995-96 is deemed to have been allowed to the assessee, since the time period for allowing the appeal effect has expired We hold that where the benefit of deduction was available for particular number of years, unless the same is withdrawn in the first year, it cannot be withdrawn for the subsequent years, particularly when there is no change in the facts. Applying the ratio laid down in CIT Vs. Paul Brothers [ 1992 (10) TMI 5 - BOMBAY HIGH COURT] , M/s. Direct Information Pvt. Ltd. Vs. ITO [ 2011 (9) TMI 137 - BOMBAY HIGH COURT] and subsequently in CIT Vs. Western Outdoor Interactive Pvt. Ltd. [ 2012 (8) TMI 709 - BOMBAY HIGH COURT] we hold that the assessee is entitled to the deduction claimed under section 80I of the Act in assessment year 1992-93, wherein the first year of claim of deduction was assessment year 1991-92 and same has not been disturbed by any of the authorities till date. The Assessing Officer is thus, directed to allow the said claim of assessee. - ITA Nos.1206 to 1210/PN/2013 - - - Dated:- 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o appreciate that the assessee had set up a new industrial undertaking in A.Y. 1991-92 and therefore, the assessee was entitled to claim deduction u/s 80I in respect of the profits from the new industrial undertaking. 6] The learned CIT(A) ought to have appreciated that:- a. The claim of the assessee that it had set up new industrial undertaking in the previous year relevant to A.Y. 1991 - 92 was accepted by the A.O. in the asst. order for A.Y. 1991 - 92 and accordingly, there was no reason to deny the deduction in the subsequent years. b. The assessee had acquired substantial new plant and machinery for the new unit and commenced commercial production and sale of its new product in the previous year relevant to AY 1991 - 92 and hence, the assessee ought to have been allowed the deduction U/S 80I in respect of the profits of the new unit. c. The plant and machinery, manpower and the premises were separately identifiable in respect of the old and the new unit and hence, there was no reason to deny the deduction claimed U/S 80I. d. Simply because, the expenses were allocated between the two units did not mean that the two units were one unit and hence, the deduction di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions of sub-section (2) of section 80IA of the Act in respect of unit set up in the period relevant to assessment year 1992-93, hence the claim of deduction under section 80IA of the Act was rejected. The appeal was also dismissed by the CIT(A). Consequent thereto, the assessment proceedings for the captioned assessment year were reopened after recording reasons for reopening and notice under section 148 of the Act was issued to the assessee. In response to the said notice, the assessee explained that the return of income originally filed may be taken on record. The assessee was asked to explain as to why the deduction originally allowed under section 143(3) of the Act should not be withdrawn, since the facts mentioned clearly show that the assessee was not liable for the said deduction because no new undertaking which satisfied all the conditions of section 80IA(2) of the Act was set up by the assessee in assessment year 1992-93. The assessee reiterated its claim. However, the same was rejected and the deduction allowed at ₹ 5,91,902/- was withdrawn. 6. The CIT(A) upheld the order of Assessing Officer since the assessee had failed to fulfill the conditions laid down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellate proceedings. The learned Authorized Representative for the assessee further referred to the assessment order for assessment year 1991-92, copy of which is placed at page 164 of the Paper Book and its back and further at page 165 of the Paper Book, under which the deduction under section 80I of the Act was allowed to the assessee vide order passed under section 143(3) of the Act dated 31.03.1991. He further referred to the assessment completed under section 143(3) of the Act in assessment years 1992-93 and 1994-95 and pointed out that only in assessment year 1993-94, the return of income was processed under section 143(1) of the Act. The copies of assessment order are placed at page 66 onwards in the Paper Book. He stressed that the Assessing Officer for the first time in assessment year 1995-96 had denied the claim of deduction under section 80I of the Act and order under section 143(3) of the Act was passed on 27.03.1998. Thereafter, earlier years were opened in 1998, since under the pre-amended provisions, the assessment for eight years could be opened as against period of six years provided under new existing provisions of the Act. Another objection raised by the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new unit in assessment year 1991-92, on which it was entitled to the benefit under section 80I of the Act. The assessment for assessment year 1991-92 was completed under section 143(3) of the Act vide order dated 28.03.1994, under which the deduction claimed under section 80I of the Act at ₹ 2,17,064/- was allowed to the assessee; copy of the said order is placed at pages 164 and 165 of the Paper Book. The assessment for assessment year 1992-93 was also originally completed under section 143(3) of the Act vide order dated 31.01.1995 and the deduction claimed under section 80I of the Act at ₹ 5,91,902/- was allowed to the assessee; copy of the said order is placed at pages 166 to 168 of the Paper Book. The return of income for assessment year 1993-94 was processed under section 143(1) of the Act. Thereafter, the assessment for assessment year 1994-95 was completed under section 143(3) of the Act and the deduction claimed under section 80I of the Act at ₹ 18,05,504/was allowed to the assessee vide order dated 16.12.1996; copy of the said assessment order is placed at pages 171 to 173 of the Paper Book. The first year of claim of deduction under section 80I of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter dated 24.08.2012 stated that the Assessing Officer has reported that after verification of claim of deduction under section 80I of the Act as directed by the Tribunal while setting aside the issue to the file of Assessing Officer vide its order dated 03.12.2007 for assessment year 1995-96, has not been undertaken and effect to the set aside the order, has not been given. It was further stated that for the claim of assessee that deduction under section 80I of the Act in respect of new industrial undertaking was first claimed in assessment year 1991-92, the Assessing Officer has reported that upon verification of record it was seen that the claim under section 80I of the Act was made in assessment year 1991-92, which was allowed vide order passed under section 143(3) of the Act dated 31.03.1994. He further states that however, supporting evidence in respect of claim of new industrial undertaking has not been produced before the Assessing Officer for verification during the remand proceedings. In view of such report received from the lower Officer, the CIT(A) held the assessee not to be eligible for the claim of deduction under section 80I of the Act vide order dated 15.03.2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the assessee had claimed the deduction under section 80I of the Act in assessment year 1992-93. The assessee furnished several evidences before the Tribunal and the matter was remanded to the Assessing Officer to determine the first year whether the claim was made in assessment year 1992-93 for the first time or in the earlier years. When the proceedings for assessment year 1995-96 were completed by the Assessing Officer and the deduction claimed under section 80I of the Act was denied to the assessee, then the assessment proceedings for assessment years 1992-93 to 1994-95, 1996-97 and 1997-98 were reopened under section 147 / 148 of the Act. However, the assessment proceedings for assessment year 1991-92 which were also completed under section 143(3) of the Act, as referred to by us in the paras hereinabove, were not reopened under section 148 of the Act; though the time limit for reopening the same had not expired. Since at that relevant time under the pre-amended provisions, the proceedings for eight years could be reopened as against the present law when the proceedings only for six years can be reopened. The plea of the assessee in this regard was that if the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the first time claimed the deduction under section 80I of the Act w.e.f. assessment year 1991-92 consequent thereto. We have already referred to the remand reports submitted by the Assessing Officer during the pendency of appellate proceedings relating to the present appeal before the CIT(A) and it has been confirmed that the assessee has been allowed the deduction under section 80I of the Act from assessment year 1991-92, which has not been disturbed. 14. In the totality of the above said facts and circumstances, where the first year of deduction of claim of deduction under section 80I of the Act by the assessee is assessment year 1991-92 and where the aforesaid deduction has been allowed to the assessee vide order passed under section 143(3) of the Act, the question arises is whether the same could be disturbed in the absence of any change in facts. The answer to the same is No . The authorities below have no power to disturb the continuity of claim of deduction under section 80I of the Act for the stipulated period provided under the Act, where once such a claim has been allowed to the assessee in the initial assessment year, since that is the year when all the conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction claimed under section 10A of the Act. Similar proposition was laid down by the Pune Bench of Tribunal in Expert Net Cad Solutions Pvt. Ltd. Vs. ACIT (supra). 17. Accordingly, we hold that where the benefit of deduction was available for particular number of years, unless the same is withdrawn in the first year, it cannot be withdrawn for the subsequent years, particularly when there is no change in the facts. Applying the ratio laid down by the Hon ble Bombay High Court in CIT Vs. Paul Brothers (supra), M/s. Direct Information Pvt. Ltd. Vs. ITO (supra) and subsequently in CIT Vs. Western Outdoor Interactive Pvt. Ltd. (supra), we hold that the assessee is entitled to the deduction claimed under section 80I of the Act in assessment year 1992-93, wherein the first year of claim of deduction was assessment year 1991-92 and same has not been disturbed by any of the authorities till date. The Assessing Officer is thus, directed to allow the said claim of assessee. 18. Similarly, the assessee is entitled to the benefit of deduction under section 80I of the Act in assessment years 1993-94, 1994-95, 1996-97 and 1997-98. We hold so. Consequently, the grounds of appeal raised by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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