Law:

Section:

Section 80-IB of the Income-tax Act, 1961 read with section 11B of the Industries (Development and Regulations) Act, 1951 - Deductions - Profits and gains from industrial undertakings other than infrastructure development undertakings - Assessment year 2004-05 - Whether provisions contained in section 80-IB nowhere stipulate any condition that such a claim has to be made in first year, failing which there would be forfeiture of such a claim in remaining years - Held, yes - Whether, therefore, if conditions stipulated under section 80-IB are fulfilled, benefit of deduction cannot be denied to an assessee merely for reason that he did not claim that benefit in initial assessment year - Held, yes - Whether registration under IDR Act will be of no consequence insofar as extending benefit of provision of section 80-IB is concerned; only aspect which is relevant and is to be considered is as to whether conditions stipulated in notification issued under section 11B of IDR Act for regarding assessee as a small scale industrial undertaking are fulfilled or not - Held, yes FACTS The assessee was running a proprietorship concern which was engaged in the business of manufacturing and export of readymade garments. To manufacture these garments for the purpose of exports, the assessee started to manufacture articles from 1-7-1997. He could avail of the benefit of section 80-IB from the date of manufacture of articles, i.e., from the assessment year 1998-99, which was the first year of the assessee's manufacturing but did not claim the deduction under the said provision in that assessment year. He claimed benefit under the aforesaid provision for the first time in the assessment year 2004-05 and pleaded that even if he had not claimed that benefit for the past years, those should be allowed to him from the assessment year 2004-05 till the remaining period of 10 years, i.e., up to the assessment year 2007-08. The Assessing Officer denied the deduction on the ground that the assessee had not availed of the same in the first year of production, i.e., in the assessment year 1998-99. He also opined that since the assessee was not registered as a small scale industrial undertaking…

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