TMI Blog1994 (11) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... erned ITO started processing of the return of income and during the course of hearing, the assessee firm gave declaration in writing on 24th Nov., 1986 to the effect that provisions of s. 10A of the IT Act, 1961 (hereinafter referred to as the Act) may not be made applicable for the previous year ending on 30th May, 1983 i.e. for asst. yr. 1984-85 and also to asst. yr. 1985-86 ending on 30th June, 1984 and the same may be made applicable for asst. yrs. 1986-87 to 1990-91. The ITO concerned referred to the provisions of s. 10A(7) of the Act which provides that such a declaration is to be filed before expiry of the time allowed under sub-s. (1) or sub-s. (2) of s. 139 of the Act and as assessee has not filed the same declaration along with re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 and accordingly the appeal was allowed. This order of learned CIT(A) is the subject-matter of this appeal preferred by the Revenue. 4. The learned Departmental Representative has placed reliance on the order of ITO and argued that it was obligatory on the part of assessee to utilise the option under s. 10A(7) of the Act by filing a declaration in writing stating that this section may not be made applicable to him and that option was to be utilised before the expiry of time allowed under sub-s. (1) or (2) of s. 139 for furnishing a return of income and in this case the assessee has failed to exercise that option in time and filing of declaration by it during processing of return of income will not help the assessee. According to the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d counsel pointed out that this analogy is fully applicable to the facts as in this case option has been utilised before completion of assessment. Reference to the judgment of ITAT Cuttack (Camp : Jaipur) in the case of ITO vs. Jeevdaya Khata (1981) 24 CTR (Ckt) (Trib) 34 was also made which is also to the same effect as laid down by their Lordships of Hon'ble Gujarat High Court in the case referred to above. The learned counsel concluded by asserting that CIT(A) was justified in allowing the appeal and no interference is warranted in the order. 6. Before dealing with the controversy in hand it is relevant to point out that facts of this case are quite clear. The assessee-firm started manufacturing since 20th July, 1982 (accounting year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... initial assessment years. The assessee firm has established its factory at Kandla Free Trade Zone and is also entitled for the benefit of s. 10A as the same is situated in the free trade zone area as well as it fulfils the conditions laid down in sub-s. (2) of s. 10A. However, the legislature has also given an option to assessee to make a declaration in writing to the Assessing Officer before the expiry of time allowed under s. 139(1) or under s. 139(2) of the Act mentioning his intention not to avail of this tax concession. In the case in hand option admittedly has not been utilised by the assessee as was required under s. 10A(7) because declaration in writing has not been submitted with the return of income but filed during the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 26th Nov., 1986 before assessment was completed then it shall be taken that he has utilised the option provided under s. 10A(7) of the Act and approach of the ITO to frame the assessment order under s. 143(3) r/w s. 10A of the Act was not justified. 8. The controversy can also be viewed with another angle. Provisions of s. 10A as mentioned above provide tax concession to the assessee and the very opting to words used in s. 10A(1) are that: "Subject to the provisions of this section, any profits and gains derived by an assessee from an industrial undertaking to which this section applies shall not be included in the total income of the assessee......" This shows that profits and gains have been exempted by the provisions of s. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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