Sintex Industries Limited, Ahmedabad V. The CIT-IV, Ahmedabad

ITA 310/AHD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85749 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 20-01-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 31-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T P KRISHNA KUMAR
• Keywords: Revision of order; Depreciation; Opportunity of being heard; Principle of natural justice; Period of limitation; Difference of opinion; Assessment record; Change of opinion
• Section: 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD .., , BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.310/AHD/2014 ( / ASSESSMENT YEAR : 2011-12) SINTEX INDUSTRIES LTD. 7 TH FLOOR, ABHIJEET BLGD MITHAKALI SIX ROADS ELLISBRIDGE AHMEDBAD / VS. THE CIT-IV 3 RD FLOOR PRATYAKSH KAR BHAWAN NR.AHMEDABAD STOCK EXCHANGE PANJRAPOLE, AMBAWADI AHMEDABAD-380 015 ./ ./ PAN/GIR NO. : AADCS 0858 E ( # / APPELLANT ) .. ( $% # / RESPONDENT ) #& / APPELLANT BY : SHRI MILIN MEHTA, AR $% #'& / RESPONDENT BY : SHRI T.P.KRISHNAKUMAR,CIT-DR ()'* / DATE OF HEARING 20/01/2015 +,-.'* / DATE OF PRONOUNCEMENT 27/02/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX-IV, AHMEDABAD (CIT IN SHORT) DATED 22/01/2014 PERTAINING TO ASSESSMENT YEAR (AY) 2011- 12. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- ITA NO.310/AHD/ 2014 SINTEX INDUSTRIES LTD. VS. CIT ASST.YEAR 2011-12 - 2 - ALL THE GROUNDS OF APPEAL IN THIS APPEAL ARE MUTUAL LY EXCLUSIVE AND WITHOUT PREJUDICE TO EACH OTHER. 1. THE LEARNED COMMISSIONER OF INCOME TAX-IV, AHMEDAB AD (THE CIT) ERRED IN FACT AND IN LAW IN REVISING THE ASSE SSMENT BY INVOKING POWERS U/S.263 OF THE INCOME TAX ACT, 1961 (THE ACT) DESPITE THE FACT THAT THE CONDITIONS STIPULATED FOR INVOKING SUCH EXTRA-ORDINARY JURISDICTION WERE NOT SATISFIED. 2. THE LEARNED CIT ERRED IN FACT AND IN LAW IN OBSERVI NG THAT THE CLAIM OF DEDUCTION U/S.80IC @ 100% OF THE PROFITS AND GAI NS OF THE BADDI UNIT FOR THE CURRENT YEAR WAS ALLOWED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-8, AHMEDABAD (THE AO) WITHO UT PROPER VERIFICATION, DESPITE THE FACT THAT THE AO DURING T HE COURSE OF ASSESSMENT HAD NOT ONLY EXAMINED THE CLAIM BUT HAD ACTUALLY RECOMPUTED THE ELIGIBLE PROFITS. 3. THE LEARNED CIT ERRED IN FACT AND IN LAW IN HOLDING THAT THE INITIAL ASSESSMENT YEAR FOR CLAIM OF DEDUCTION U/S.80IC IS AY 2005-06 AND AY 2008-09 CANNOT BE CONSIDERED AS INITIAL ASSESSME NT YEAR. 4. THE LEARNED CIT ERRED IN FACT AND IN LAW IN DIRECTI NG THE AO TO ALLOW DEDUCTION @ 30% (RS.18,79,22,767) OF THE PROF ITS AND GAINS OF THE BADDI UNIT INSTEAD OF 100% (RS.62,64,09,223) OF THE PROFITS AND GAINS OF THE BADDI UNIT CLAIMED BY THE APPELLANT AN D THEREBY DIRECTING THE AO TO REDUCE THE DEDUCTION U/S.80IC B Y AN AMOUNT OF RS.43,84,86,456. 5. YOUR APPELLANT CRAVES THE RIGHT TO ADD TO OR ALTER, AMEND, SUBSTITUTE, DELETE OR MODIFY ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 20/03/2013. HOWEVER, THE ASSESSMENT SO FRAME D WAS MODIFIED BY THE LD.CIT BY INVOKING THE PROVISIONS OF SECTION 26 3 OF THE ACT. NOW, THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORD ER U/S.263 OF THE ACT DATED 22/01/2014 PASSED BY THE LD.CIT. ITA NO.310/AHD/ 2014 SINTEX INDUSTRIES LTD. VS. CIT ASST.YEAR 2011-12 - 3 - 3. GROUND NOS.1 TO 3 ARE RAISED AGAINST VALIDITY OF INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT. THE GROUND NO .4 IS ON MERIT. SINCE ALL GROUNDS ARE INTER-CONNECTED, THEREFORE ALL THE GROUNDS ARE BEING DECIDED TOGETHER FOR THE SAKE OF CONVENIENCE. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ORDER OF THE LD.CIT IS WITHOUT JURISDICTION AND AS SUCH IS PASSED WITHOUT SATISFYING THE CONDITIONS AS ENVISAGED U/S.263 OF THE ACT. HE SUBMITTED THAT THE AO HAD ISSUED SP ECIFIC NOTICE DATED 07/01/2013. HE DREW OUR ATTENTION TOWARDS PAGE NOS .133 TO 138 OF THE PAPER-BOOK, WHEREIN THE NOTICE ISSUED U/S.142(1) OF THE ACT IS ENCLOSED. HE SUBMITTED THAT AS PER CLAUSE-36 OF THE NOTICE, THE AO HAD ASKED ABOUT THE DEDUCTION UNDER CHAPTER VI-A OF THE ACT. HE SU BMITTED THAT THE AO HAD APPLIED HIS MIND ON THE REPLY DATED 22/02/2013 ENCLOSED IN THE PAPER-BOOK AT PAGE NO.139 TO 141 FILED BY THE ASSES SEE. HE SUBMITTED THAT A DETAILED REPLY WAS GIVEN BY THE ASSESSEE IN RESPECT OF DEDUCTION CLAIMED U/S.80IC OF THE ACT. HE SUBMITTED THAT THE REASON FOR INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT IS EMBEDDE D IN PARA-3 OF THE ORDER OF THE LD.CIT. HE SUBMITTED THAT THE LD.CIT OBSERVED THAT IN RESPECT OF BADDI UNIT FIRST SUBSTANTIAL EXPANSION OF THE UN IT WAS CARRIED OUT IN PREVIOUS YEAR RELEVANT TO AY 2005-06 AND ASSESSEE C LAIMED DEDUCTION U/S.80IC OF THE ACT FOR THE SAID UNIT ON THE BASIS OF THE SUBSTANTIAL EXPANSION WHICH TOOK PLACE IN AY 2005-06. FURTHER, THE SECOND SUBSTANTIAL EXPANSION IS CLAIMED IN AY 2008-09. HE NCE, FOR BADDI UNIT, INITIAL ASSESSMENT YEARS HAVE BEEN CONSIDERED FROM AYS 2005-06 & ITA NO.310/AHD/ 2014 SINTEX INDUSTRIES LTD. VS. CIT ASST.YEAR 2011-12 - 4 - 2008-09 ONWARDS AS PER 10CCB REPORT, FOR WHICH DEDU CTION @ 100% IS CLAIMED. HE SUBMITTED THAT THE LD.CIT ERRONEOUSLY CAME TO THE CONCLUSION THAT SECOND SUBSTANTIAL EXPANSION IS NOT PERMISSIBLE AND, THEREFORE THE ASSESSEE IS NOT ENTITLED FOR CLAIM OF DEDUCTION U/S.80IC OF THE ACT IN RESPECT OF BADDI UNIT @100%, BUT THE ASS ESSEE WAS ENTITLED ONLY FOR 30% OF THE PROFIT DERIVED FROM SAID INDUST RIAL UNIT. HE SUBMITTED THAT THE LD.CIT ERRONEOUSLY HELD THAT THE ASSESSEES CLAIM OF DEDUCTION IN RESPECT OF BADDI UNIT @ 100% IS EXCESS IVE AND INADMISSIBLE OVER AND ABOVE THE ADMISSIBLE CLAIM @ 30% OF THE PROFIT DERIVED FROM THE SAID INDUSTRIAL UNIT. THE LD.CIT ERRONEOUSLY OBSERVED THAT THE AO HAS NOT EXAMINED AND CROSS-VERIFIED THE SE ISSUES CONSIDERING THE CORRECT FACTS IN THIS REGARD. HE SUBMITTED THA T THE LD.CIT WAS NOT JUSTIFIED IN HOLDING THAT ONCE ASSESSEES INITIAL ASSESSMENT YEAR IS DETERMINED TO BE AY 2005-06, THE PROVISIONS OF SEC TION 80IC(3)(II) OF THE ACT WERE CLEARLY ATTRACTED THAT THE DEDUCTION @ 100% OF THE PROFIT OF SUCH UNDERTAKING WAS ALLOWABLE ONLY FOR 5 YEARS FRO M THE INITIAL ASSESSMENT YEAR I.E. UPTO AY 2009-10 ONLY AND THERE AFTER @ 30%. HE SUBMITTED THAT THE LD.CIT HAS MISCONSTRUED THE PROV ISION. MOREOVER, HE SUBMITTED THAT THE AO HAS APPLIED HIS MIND ON THE E LIGIBILITY AND ENTITLEMENT OF THE ASSESSEE IN RESPECT OF BADDI UNI T @ 100%. HE SUBMITTED THAT THE FINDING OF THE CIT IS CLEARLY A CHANGE OF OPINION. HE SUBMITTED THAT ON THE BASIS OF CHANGE OF OPINION, T HE CONCLUDED ASSESSMENT CANNOT BE REVISED. IN SUPPORT OF THIS C ONTENTION, HE RELIED ITA NO.310/AHD/ 2014 SINTEX INDUSTRIES LTD. VS. CIT ASST.YEAR 2011-12 - 5 - UPON THE JUDGEMENT OF MUMBAI HIGH COURT RENDERED IN THE CASE OF CIT VS. GABRIEL INDIA LTD. REPORTED AT 203 ITR 108(MUM. ). HE FURTHER RELIED ON THE JUDGEMENT OF HONBLE MADHYA PRADESH RENDERE D IN THE CASE OF CIT VS. RATLAM COAL ASH CO. REPORTED AT 171 ITR 141 (MP). HE SUBMITTED THAT LAW IS WELL SETTLED NOW, THAT THE AS SESSMENT ORDER CANNOT BE REVISED MERELY ON THE BASIS OF CHANGE OF OPINIO N. HE SUBMITTED THAT ALL MATERIAL WERE PLACED BEFORE THE AO. THE AO HAS APPLIED HIS MIND ENQUIRIES MADE ABOUT THE ELIGIBILITY AND ENTITLEMEN T OF DEDUCTION AND AFTER MAKING ENQUIRIES, THE AO CAME TO THE CONCLUSI ON THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S.80IC OF THE ACT AND A LLOWED THE CLAIM OF THE ASSESSEE. HE SUBMITTED THAT ONLY GROUND ON WHICH T HE LD.CIT HAS REVISED THE ORDER IS THAT THE ASSESSEE HAS CARRIED OUT A SU BSTANTIAL EXPANSION SECOND TIME, IN RESPECT OF THE BADDI UNIT IN THE RE LEVANT AY 2008-09 AND ON EARLIER OCCASION, THE ASSESSEE HAS CARRIED OUT S UBSTANTIAL EXPANSION FOR THE YEAR RELEVANT TO AY 2005-06. THEREFORE, THE LD .CIT WAS OF THE VIEW THAT INITIAL ASSESSMENT YEAR SHOULD HAVE BEEN AY 20 05-06 AND NOT TO THE AY 2008-09 AS CLAIMED BY THE ASSESSEE. HE SUBMITTE D THAT THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF ASSESSEE BY THE COORDINAT E BENCHES OF THIS TRIBUNAL (ITAT DELHI BENCH & ITAT CHANDIGARH BENCH) IN ITA NO.991/DELHI/2013 IN THE CASE OF TIRUPATI LPG INDUS TRIES LTD. VS. DCIT DEHRADUN AND ITA NO.340/CH./2010 IN THE CASE OF DCI T VS. M/S.S.R.PARYAVARAN ENGINEERS PVT.LTD., WHEREIN IT H AS BEEN HELD THAT THERE IS NO PROHIBITION OR BAR INTO THE STATUTE THA T THE ASSESSEE CANNOT ITA NO.310/AHD/ 2014 SINTEX INDUSTRIES LTD. VS. CIT ASST.YEAR 2011-12 - 6 - CARRY OUT SUBSTANTIAL EXPANSION AFTER HAVING CARRIE D OUT ONCE. HE SUBMITTED THAT IT HAS BEEN HELD THAT MERELY BECAUSE THERE IS A SUBSTANTIAL EXPANSION WOULD NOT DISENTITLE TO THE ASSESSEE FOR CLAIMING INITIAL ASSESSMENT YEAR ON THE BASIS OF THE SECOND SUBSTANT IAL EXPANSION. HE SUBMITTED THAT THE ONLY BAR PRESCRIBED BY THE STATU TE IS THAT THE ASSESSEE CAN CLAIM DEDUCTION ONLY FOR 10 YEARS. HE SUBMITTE D THAT THIS IS NOT THE CASE WHERE THE ASSESSEE HAS BY WAY OF SUBSTANTIAL E XPANSION WOULD BE ENTITLED FOR CLAIM OF DEDUCTION U/S.80IC OF THE AC T FOR THE PERIOD BEYOND 10 YEARS. HE SUBMITTED THAT LD.CIT HAS NOT DOU BTED THE GENUINENESS OF CLAIM. IT IS ALSO ADMITTED POSITION THAT THE ASSES SEE HAS CARRIED OUT SUBSTANTIAL EXPANSION RELEVANT TO AY 2008-09. IT I S ALSO ADMITTED POSITION THAT DEDUCTION U/S.80IC IS AVAILABLE FOR T EN ASSESSMENT YEARS, BEYOND SUCH PERIOD NO DEDUCTION WOULD BE AVAILABLE. HE SUBMITTED THAT DEDUCTION IS AVAILABLE AS PER SECTION 80IC OF THE A CT. FURTHER, HE CONTENTED THAT THE APPELLANT IS ELIGIBLE TO CLAIM D EDUCTION U/S.80IC OF THE ACT IS NOT DISPUTED. THE FACT THAT THE PERIOD FOR WHICH DEDUCTION IS AVAILABLE IS NOT DISPUTED I.E. AYS 2002-03 TO 2011 -12 (BOTH ASSESSMENT YEARS ARE INCLUSIVE). THE FACT THAT THE APPELLANT HAS UNDERTAKEN SUBSTANTIAL EXPANSION, AS DEFINED U/S.80IC OF THE A CT, IN THE AY 2005-06 AND AY2008-09 HAS BEEN ACCEPTED. THIS FACT HAS BEE N DULY EXAMINED AND VERIFIED DURING THE COURSE OF REGULAR ASSESSMEN T PROCEEDINGS U/S.143(3) OF THE ACT. THE DEPARTMENT HAS ALLOWED THE CLAIM OF DEDUCTION @ 100% U/S.80IB(4)/80IC(2) TILL AY 2010- 11. HE SUBMITTED ITA NO.310/AHD/ 2014 SINTEX INDUSTRIES LTD. VS. CIT ASST.YEAR 2011-12 - 7 - THAT UNDER THE IDENTICAL FACTS THE CO-ORDINATE BENC H OF THIS TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE IN THE CASE OF TIRUPATI LPG INDUSTRIES LTD. VS. DY.CIT(SUPRA). HE SUBMITTED TH AT THE ISSUE IS THEREFORE BE DECIDED IN FAVOUR OF THE ASSESSEE SIN CE IN VIEW OF THE AFORESAID BINDING PRECEDENTS, THE LD.CIT OUGHT NOT TO HAVE REVISED ITS ORDER. 4. ON THE CONTRARY, LD.CIT-DR SUBMITTED THAT AS PER THE PROVISIONS OF SECTION 263 OF THE ACT, THE CIT IS EMPOWERED TO REV ISE THE ASSESSMENT ORDER PASSED BY THE AO. HE SUBMITTED THAT IN THE C ASE IN HAND, THE ORDER PASSED BY THE AO IS BOTH ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. HE SUBMITTED THAT THE AO FAILED TO APPREC IATE THE FACT THAT THE ASSESSEE WAS NOT ELIGIBLE FOR 100% DEDUCTION U/S.80 IC. HE SUBMITTED THAT THERE IS COMPLETE NON-APPLICATION OF MIND ON T HE PART OF THE AO. HE DREW OUR ATTENTION TO PROVISIONS OF SECTION 80IC OF THE ACT. HE SUBMITTED THAT THERE IS NO AMBIGUITY INTO THE PROVI SIONS, HE CONTENDED THAT THE ASSESSEE FALLS UNDER THE CATEGORY OF COMME NCEMENT OF SPECIFIED MANUFACTURING ACTIVITY IN THE SPECIFIED AREA FROM A PARTICULAR DATE WOULD BE ENTITLED FOR 100% DEDUCTION, THEREFORE, 30% OF DEDUCTION. FURTHER, IN RESPECT OF ANOTHER CATEGORY OF ASSESSEE WHO ALTHOUG H MIGHT HAVE COMMENCED THE SPECIFIED ACTIVITY IN SPECIFIED AREA PRIOR TO THE DATE PRESCRIBED BUT CARRIES OUT AND COMPLETE SUBSTANTIAL EXPANSION DURING THE PRESCRIBED PERIOD. SUCH ASSESSEE WOULD ALSO BE ENT ITLED FOR @100% DEDUCTION FOR 5 YEARS AND, THEREAFTER @ 30% FOR ANO THER 5 YEARS. SUCH ITA NO.310/AHD/ 2014 SINTEX INDUSTRIES LTD. VS. CIT ASST.YEAR 2011-12 - 8 - DEDUCTION IS AVAILABLE FOR MAXIMUM PERIOD OF 10 YEA RS FROM THE INITIAL ASSESSMENT YEAR. HE SUBMITTED THAT INITIAL YEAR IS DEFINED UNDER SUB SECTION(8) OF SECTION 80IC OF THE ACT. HE SUBMITT ED THAT THE PROVISIONS DO NOT ENVISAGE TWO INITIAL ASSESSMENT YEARS. HE F URTHER SUBMITTED THAT NO OPTION IS AVAILABLE TO THE ASSESSEE TO FIX INITI AL ASSESSMENT YEAR IN ACCORDANCE WITH HIS WISH. HE SUBMITTED THAT THERE IS NO AMBIGUITY SO FAR THIS PROPOSITION IS CONCERNED. HE CONTENDED THAT L AW IS WELL SETTLED THAT IF SOMETHING IS NOT PROVIDED UNDER THE ACT, CANNOT BE PROVIDED BY WAY OF LIBERAL CONSTRUCTION OF THE PROVISION. HE PLACED R ELIANCE ON THE JUDGEMENT OF HONBLE HIGH COURT OF KARNATAKA RENDE RED IN THE CASE OF CIT VS. INFOSYS TECHNOLOGIES LTD. REPORTED AT (2012 ) 17 TAXMANN.COM 203 (KAR.) IN SUPPORT OF CONTENTION THAT EVERY CONC LUSION AND FINDING BY THE ASSESSING AUTHORITY SHOULD BE SUPPORTED BY REAS ONS, IF THE ASSESSING AUTHORITY FAILED IN THAT, MORE SO EXTENDING THE REL IEF TO THE ASSESSEE SUCH ORDER CONSTITUTES, AN ORDER NOT MERELY ERRONEOUS BU T ALSO PREJUDICIAL TO THE INTEREST OF REVENUE. THE LD.CIT-DR FURTHER REL IED ON THE JUDGEMENT OF HONBLE BOMBAY HIGH COURT RENDERED IN THE CASE O F INDIAN RAYON CORPN.LTD. VS. CIT REPORTED AT (1978) 231 ITR 26 ( BOM) IN SUPPORT OF CONTENTION THAT A STATUTORY ENACTMENT MUST ORDINARI LY BE CONSTRUED ACCORDING TO THE PLAIN NATURAL MEANING OF ITS LANGU AGE AND THAT NO WORDS SHOULD BE ADDED, ALTERED OR MODIFIED UNLESS IT IS P LAINLY NECESSARY TO DO SO IN ORDER TO PREVENT A PROVISION FROM BEING UNINT ELLIGIBLE, ABSURD, UNREASONABLE, UNWORKABLE OR TOTALLY IRRECONCILABLE WITH THE REST OF THE ITA NO.310/AHD/ 2014 SINTEX INDUSTRIES LTD. VS. CIT ASST.YEAR 2011-12 - 9 - STATUTE. HE SUBMITTED THAT THESE ARGUMENTS WERE NO T TAKEN BEFORE THE COORDINATE BENCHES OF THIS TRIBUNAL, HENCE THE SUBM ISSIONS OF THE REVENUE WERE NOT CONSIDERED AND NOT DECIDED FROM TH IS PERSPECTIVE. 5. W E HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MAT ERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. BEFORE ADVERTING TO THE MERITS OF THE CASE, IT WOULD APPRO PRIATE TO EXAMINE THE CONDITIONS ENVISAGED FOR INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT. SECTION 263 OF THE ACT IS REPRODUCED AS UNDER FOR READY REFERENCE. E.REVISION BY THE [PRINCIPAL COMMISSIONER OR COMMI SSIONER] SECTION 263 REVISION OF ORDERS PREJUDICIAL TO REVENUE. (1) THE [PRINCIPAL COMMISSIONER OR COMMISSIONER] MA Y CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING UNDER THIS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE [ASSESSING OFFICER] IS ERRONE OUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUS ING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THER EON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR M ODIFYING THE ASSESSMENT, OR CANCELLING THE ASSESSMENT AND DIRECTING A FRESH ASS ESSMENT. [ EXPLANATION : FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT, FOR THE PURPOSES OF THIS SUB-SECTION, (A) AN ORDER PASSED [ON OR BEFORE OR AFTER THE 1ST DAY OF JUNE, 1988,] BY THE ASSESSING OFFICER SHALL INCLUDE (I) AN ORDER OF ASSESSMENT MADE BY THE [ASSISTANT C OMMISSIONER OR DEPUTY COMMISSIONER] OR THE INCOME-TAX OFFICER ON THE BASI S OF THE DIRECTIONS ISSUED BY THE [JOINT COMMISSIONER] UNDER SECTION 144A; ITA NO.310/AHD/ 2014 SINTEX INDUSTRIES LTD. VS. CIT ASST.YEAR 2011-12 - 10 - (II) AN ORDER MADE BY THE [JOINT COMMISSIONER] IN E XERCISE OF THE POWERS OR IN THE PERFORMANCE OF THE FUNCTIONS OF AN ASSESSING OF FICER CONFERRED ON, OR ASSIGNED TO, HIM UNDER THE ORDERS OR DIRECTIONS ISS UED BY THE BOARD OR BY THE [PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER ] OR [PRINCIPAL DIRECTOR GENERAL OR DIRECTOR GENERAL] OR [PRINCIPAL COMMISSIONER OR COMMISSIONER] AUTHORISED BY THE BOARD IN THIS BEHALF UNDER SECTIO N 120; (B) 'RECORD' [SHALL INCLUDE AND SHALL BE DEEMED ALWAYS TO HAVE I NCLUDED] ALL RECORDS RELATING TO ANY PROCEEDING UNDER THIS ACT A VAILABLE AT THE TIME OF EXAMINATION BY THE [PRINCIPAL COMMISSIONER OR COMMISSIONER]; (C) WHERE ANY ORDER REFERRED TO IN THIS SUB-SECTION AND PASSED BY THE ASSESSING OFFICER HAD BEEN THE SUBJECT MATTER OF ANY APPEAL [FILED ON OR BEFORE OR AFTER THE 1ST DAY OF JUNE, 1988], THE POWERS OF THE [PRINCIPAL COMMISSIONER OR COMMISSIONER] UNDER THIS SUB-SECTION SHALL EXTEND [AND SHALL BE DEEMED ALWAYS TO HAVE EXTENDED] TO SUCH MATTERS AS HAD NOT BEEN CONSIDERED AND DECIDED IN SUCH APPEAL]. [(2) NO ORDER SHALL BE MADE UNDER SUB-SECTION (1) A FTER THE EXPIRY OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORD ER SOUGHT TO BE REVISED WAS PASSED.] (3) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SECTI ON (2), AN ORDER IN REVISION UNDER THIS SECTION MAY BE PASSED AT ANY TIME IN THE CASE OF AN ORDER WHICH HAS BEEN PASSED IN CONSEQUENCE OF, OR TO GIVE EFFECT TO , ANY FINDING OR DIRECTION CONTAINED IN AN ORDER OF THE APPELLATE TRIBUNAL, [NATIONAL TAX TRIBUNAL] THE HIGH COURT OR THE SUPREME COURT. EXPLANATION : IN COMPUTING THE PERIOD OF LIMITATION FOR THE PU RPOSES OF SUB- SECTION (2), THE TIME TAKEN IN GIVING AN OPPORTUNIT Y TO THE ASSESSEE TO BE REHEARD UNDER THE PROVISO OF SECTION 129 AND ANY PE RIOD DURING WHICH ANY PROCEEDING UNDER THIS SECTION IS STAYED BY AN ORDER OR INJUNCTION OF ANY COURT SHALL BE EXCLUDED. 5.1. A BARE READING OF THE SECTION 263 OF THE ACT, IT IS EVIDENT THAT THE PRINCIPAL COMMISSIONER OR COMMISSIONER MAY CALL FO R AND EXAMINE THE ITA NO.310/AHD/ 2014 SINTEX INDUSTRIES LTD. VS. CIT ASST.YEAR 2011-12 - 11 - RECORD OF ANY PROCEEDING UNDER THE ACT, AND IF HE C ONSIDERS THAT ANY ORDER PASSED THEREIN BY THE ASSESSING OFFICER IS ER RONEOUS AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE MAY , AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MA KING OR CAUSING TO MAKE SUCH INQUIRY AS HE DEEMED IF NECESSARY, PASS S UCH ORDER THEREIN AS THE CIRCUMSTANCES OF THE CASE JUSTIFY. THEREFORE , FOR INVOKING THE PROVISIONS, TWIN CONDITIONS ARE TO BE SATISFIED THA T THE ORDER PASSED BY THE AO IS BOTH ERRONEOUS AND PREJUDICIAL TO THE INTERES TS OF THE REVENUE. IF ANY OF TWO CONDITIONS IS NOT SATISFIED, THE ORDER I NVOKING THE PROVISIONS OF SECTION 263 OF THE ACT BECOMES BAD. THE LAW IS WELL SETTLED BY VARIOUS JUDICIAL PRONOUNCEMENTS OF THE HONBLE SUPR EME COURT AND HONBLE HIGH COURTS. THE HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS. CIT REPORTED AT 245 ITR 83(SC) HAS HELD AS UNDER:- A BARE READING OF THIS PROVISION MAKES IT CLEAR TH AT THE PREREQUISITE TO EXERCISE OF JURISDICTION BY THE CIT SUO MOTU UNDER IT, IS THAT THE ORDER OF THE ITO IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL T O THE INTERESTS OF THE REVENUE. THE CIT HAS TO BE SATISFIED OF TWIN CONDIT IONS, NAMELY, (I) THE ORDER OF THE AO SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF ONE OF THEM IS ABSENTIF THE ORDER OF THE ITO IS ERRONEOUS BUT IS NOT PREJUD ICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IS PREJUDICIAL TO THE REVENUERECOURSE CANNOT BE HAD TO S. 263(1) OF THE ACT. THERE CAN BE NO DOUBT THAT THE PROVISION CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED B Y THE AO; IT IS ONLY WHEN AN ORDER IS ERRONEOUS THAT THE SECTION WILL BE ATTRACTED. AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLI CATION OF LAW WILL ITA NO.310/AHD/ 2014 SINTEX INDUSTRIES LTD. VS. CIT ASST.YEAR 2011-12 - 12 - SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOU S. IN THE SAME CATEGORY FALL ORDERS PASSED WITHOUT APPLYING THE PR INCIPLES OF NATURAL JUSTICE OR WITHOUT APPLICATION OF MIND. THE PHRASE PREJUDICIAL TO THE INTERESTS OF THE REV ENUE IS NOT AN EXPRESSION OF ART AND IS NOT DEFINED IN THE ACT. UN DERSTOOD IN ITS ORDINARY MEANING IT IS OF WIDE IMPORT AND IS NOT (C ONFERRED) TO LOSS OF TAX. THE HIGH COURT OF CALCUTTA IN DAWJEE DADABHOY & CO. VS. S.P. JAIN & ANR. (1957) 31 ITR 872 (CAL) : TC 57R.129, T HE HIGH COURT OF KARNATAKA IN CIT VS. T. NARAYANA PAI (1975) 98 ITR 422 (KAR) : TC 57R.185, THE HIGH COURT OF BOMBAY IN CIT VS. GABRIE L INDIA LTD. (1993) 114 CTR (BOM) 81 : (1993) 203 ITR 108 (BOM) : TC 57R.213 AND THE HIGH COURT OF GUJARAT IN CIT VS. SMT. MINAL BEN S. PARIKH (1995) 127 CTR (GUJ) 333 : (1995) 215 ITR 81 (GUJ) : TC 57R.312 TREATED LOSS OF TAX AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. MR. ABRAHAM RELIED ON THE JUDGMENT OF THE DIVISION BENCH OF THE HIGH COURT OF MADRAS IN VENKATAKRISHNA RICE COMPANY VS. CIT (1987) 62 CTR (MAD) 152 : (1987) 163 ITR 129 (MAD) : TC 57R.3 03 INTERPRETING 'PREJUDICIAL TO THE INTERESTS OF THE REVENUE'. THE HIGH COURT HELD, 'IN THIS CONTEXT, IT MUST BE REGARDED AS INVOLVING A CO NCEPTION OF ACTS OR ORDERS WHICH ARE SUBVERSIVE OF THE ADMINISTRATION O F REVENUE. THERE MUST BE SOME GRIEVOUS ERROR IN THE ORDER PASSED BY THE ITO, WHICH MIGHT SET A BAD TREND OR PATTERN FOR SIMILAR ASSESS MENTS, WHICH ON A BROAD RECKONING, THE CIT MIGHT THINK TO BE PREJUDIC IAL TO THE INTERESTS OF REVENUE ADMINISTRATION'. IN OUR VIEW THIS INTERPRET ATION IS TOO NARROW TO MERIT ACCEPTANCE. THE SCHEME OF THE ACT IS TO LE VY AND COLLECT TAX IN ACCORDANCE WITH THE PROVISIONS OF THE ACT AND THIS TASK IS ENTRUSTED TO THE REVENUE. IF DUE TO AN ERRONEOUS ORDER OF THE IT O, THE REVENUE IS LOSING TAX LAWFULLY PAYABLE BY A PERSON, IT WILL CE RTAINLY BE PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE PHRASE PREJUDICIAL TO THE INTERESTS OF THE REV ENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE A O. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF AO CANNOT B E TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, FOR EX AMPLE, WHEN AN ITO ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND I T HAS RESULTED IN LOSS ITA NO.310/AHD/ 2014 SINTEX INDUSTRIES LTD. VS. CIT ASST.YEAR 2011-12 - 13 - OF REVENUE; OR WHERE TWO VIEWS ARE POSSIBLE AND THE ITO HAS TAKEN ONE VIEW WITH WHICH THE CIT DOES NOT AGREE, IT CANNOT B E TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE ITO IS UNSUSTAINABLE IN LAW. IT H AS BEEN HELD BY THIS COURT THAT WHERE A SUM NOT EARNED BY A PERSON IS AS SESSED AS INCOME IN HIS HANDS ON HIS SO OFFERING, THE ORDER PASSED BY T HE AO ACCEPTING THE SAME AS SUCH WILL BE ERRONEOUS AND PREJUDICIAL TO T HE INTEREST OF THE REVENUE. RAMPYARI DEVI SARAOGI VS. CIT (1968) 67 IT R 84 (SC) AND IN SMT. TARA DEVI AGGARWAL VS. CIT (1973) 88 ITR 323 ( SC). 6. IT IS WELL SETTLED THAT THE REVISIONARY POWER E NSHRINED IN SECTION 263 OF THE ACT IS TO BE EXERCISED SPARINGLY AND IN A RARE CARE, WHEN THE LD.CIT FINDS FROM THE ASSESSMENT RECORD PLACED BEFO RE HIM THAT BOTH THE CONDITIONS OF THE ASSESSMENT BEING ERRONEOUS AND PR EJUDICIAL TO THE INTEREST OF REVENUE ARE SATISFIED, HE CAN INVOKE TH E PROVISIONS OF SECTION 263 OF THE ACT. SINCE THE CONCLUDED REGULAR ASSESS MENT CANNOT BE FURTHER SCRUTINIZED ON THE BASIS OF WHIMS AND FANCIES, IT B ADLY AFFECTS THE RIGHTS OF THE TAXPAYER AND MAKES A DENT INTO THE TRUST OF PUBLIC AT LARGE, INTO THE RULE OF LAW. 6.1. IT IS ALSO SETTLED LAW THAT THE CIT CANNOT REV ISE THE ASSESSMENT MERELY ON THE BASIS OF CHANGE OF OPINION. IN CAS E, THE AO MAKES INQUIRY DURING THE ASSESSMENT PROCEEDINGS IN RESPEC T OF ANY CLAIM OF THE ASSESSEE, IN PURSUANCE OF SUCH INQUIRY, THE ASSESSE E FURNISHES CERTAIN EVIDENCES AND OFFER EXPLANATION QUA THE CLAIM OF DE DUCTION, EXPENDITURE, OR EXEMPTION OF INCOME AND THE ASSESSING OFFICER F ORM HIS OPINION WITH REGARD TO ALLOWABILITY OF SUCH CLAIM. UNLESS SUCH OPINION IS ABSURD AND CANNOT BE A POSSIBLE VIEW UNDER LAW AND FACTS, THE CIT CANNOT REVISE ITA NO.310/AHD/ 2014 SINTEX INDUSTRIES LTD. VS. CIT ASST.YEAR 2011-12 - 14 - SUCH ORDER. IN THE INSTANT CASE, THERE IS NO DISPU TE WITH REGARD TO FACT THAT THE AO ISSUED QUESTIONNAIRE TO THE ASSESSEE, SEEKIN G EXPLANATION IN RESPECT OF ALLOWABILITY OF DEDUCTION CLAIMED UNDER CHAPTER-VI OF THE ACT. IT IS ALSO NOT DISPUTED THAT THE ASSESSEE FILED A D ETAILED EXPLANATION QUA THE ALLOWABILITY OF DEDUCTION U/S.80IC OF THE ACT F ALLING UNDER CHAPTER VI OF THE ACT. AFTER CONSIDERING THE EXPLANATION O F THE ASSESSEE, THE AO ALLOWED THE CLAIM. THIS ACT OF ASSESSING OFFICER WAS REVISED BY THE LD.CIT BY INVOKING PROVISIONS OF SECTION 263 OF THE ACT BY WAY OF THE IMPUGNED ORDER. NOW, THE ISSUE ARISES FOR EXAMINAT ION, WHETHER THE LD.CIT WAS JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT UNDER THE FACTS AND CIRCUMSTANCES OF THE PRESENT CA SE. WE FIND THAT THE LD.CIT REVISED THE ORDER ON THE BASIS THAT THE AO D ID NOT EXAMINE THE ISSUE REGARDING ELIGIBILITY OF CLAIM U/S.80IC OF TH E ACT FOR THE ASSESSEES BADI UNIT. HOWEVER, THE CONTENTION OF THE ASSESSEE IS THAT THE AO HAS EXAMINED THIS ISSUE. THEREFORE, THE ORDER OF THE L D.CIT IS BASED UPON CHANGE OF OPINION. IT IS TRANSPIRED FROM THE RECOR DS THAT THE AO HAD ISSUED A SPECIFIC QUERY WITH REGARD TO ELIGIBILITY UNDER CHAPTER VIA. A NOTICE ISSUED U/S.142(1) OF THE ACT IS ENCLOSED AT PAGE-133 OF THE PAPER- BOOK. AS PER THE SAID NOTICE, THE AO HAD REQUESTED TO THE ASSESSEE TO FURNISH THE DETAILS OF THE DEDUCTION CLAIMED UNDER CHAPTER VIA. IN RESPONSE THERETO, A LETTER DATED 22/02/2013 WAS SUB MITTED TO THE AO, WHEREIN A SPECIFIC EXPLANATION WAS GIVEN IN RESPECT OF THE DEDUCTION CLAIMED U/S.80IC OF THE ACT. THE LETTER SO SUBMITT ED IS ENCLOSED AT PAGE- ITA NO.310/AHD/ 2014 SINTEX INDUSTRIES LTD. VS. CIT ASST.YEAR 2011-12 - 15 - 139 OF THE PAPER-BOOK. ADMITTEDLY, THE AO HAS NOT GIVEN ANY FINDING WITH REGARD TO ELIGIBILITY OF DEDUCTION U/S.80IC @ 100% OF THE ELIGIBLE PROFIT. THE LD.CIT DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE ON THE BASIS THAT AS PER 80IC(III) R.W.S.80IC(VI) OF THE A CT, A UNIT WOULD BE ELIGIBLE FOR CLAIM OF DEDUCTION FOR TOTAL OF TEN ( 10) YEARS ONLY AND OUT OF THAT CLAIM OF DEDUCTION @100% FOR THE FIRST FIVE (5 ) YEARS AND THEREAFTER FIVE (5) ASSESSMENT YEARS @ 30%. FURTHER, WE FIND THAT THE LD.CIT AT PAGE-19 OF HIS ORDER IN SUB-CLAUSE(X) HAS OBSERVED AS UNDER:- (X) ASSESSEES CONTENTION IN PARA-11, ASSESSEE HAS CLAIMED THT IT HAD FULFILLED ALL THE CONDITIONS PRESCRIBED U/S. 80IC OF THE ACT FOR CLAIMING BENEFIT ON SUBSTANTIAL EXPANSION CARRIED O UT IN A.Y. 2008- 09 AND THERE BEING NO RESTRICTION WHICH DEBAR CLAIM ING BENEFIT ON SECOND SUBSTANTIAL EXPANSION WHICH WAS IN CONSONANC E WITH THE OBJECTIVE FOR WHICH SUCH INCENTIVE WAS PROVIDED. I T HAS ALSO RELIED UPON THE DECISION OF ITAT, CHANDIGARH IN THE CASE O F POOJA INDUSTRIES WHERE IT IS CLAIMED THAT ITAT HAS OBSERV ED IT IS CLEAR THAT DEDUCTION U/S.80IC IS AVAILABLE WHENEVER ASSES SEE UNDERTAKES A SUBSTANTIAL EXPANSION TO CLAIM THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION WHENEVER IT UNDERTAKES SUBSTANTIAL EXPANS ION AS OBSERVED BY ITAT TO IMPLY THAT EVERY TIME SUBSTANTI AL EXPANSION IS UNDERTAKEN, IT IS ELIGIBLE FOR 100% DEDUCTION. REBUTTAL - IN THE AFORESAID DISCUSSION, ASSESSEE HAS FAILE D TO STATE AS TO WHETHER THE ITAT, CHANDIGARH HAD DECIDED AS T O HOW MANY TIMES SUBSTANTIAL EXPANSION CAN BE CARRIED OUT AND FURTHER WHETHER THE FACTS OF THE SAID CASE RELIED UPON BY A SSESSEE INVOLVED MORE THAN ONE SUBSTANTIAL EXPANSIONS AND CLAIM U/S. 80IC OF THE ACT @ 100% FOR EXTENDED PERIOD BEYOND 5 YEARS. FUR THER, THE WORD USED BY ITAT IS SUBSTANTIAL EXPANSION AND NO T SUBSTANTIAL EXPANSIONS TO IMPLY MORE THAN ONE EXPANSION BEING CARRIED OUT TO ITA NO.310/AHD/ 2014 SINTEX INDUSTRIES LTD. VS. CIT ASST.YEAR 2011-12 - 16 - CLAIM DEDUCTION @ 100% FOR THE EXTENDED PERIOD BEYO ND 5 YEARS FROM THE INITIAL ASSESSMENT YEAR IN WHICH SUCH SUBS TANTIAL EXPANSION WAS COMPLETED. ASSESSEE HAS ALSO RELIED UPON THE OPINIONS OF FORME R HIGH COURT JUDGES SHRI P.B. MAJMUDAR AND SHRI D.A. MEHTA IN SU PPORT OF ITS CLAIM FOR 100% DEDUCTION FOR THE EXTENDED PERIOD BE YOND 5 YEARS, HOWEVER, ON PERUSAL OF THE SAME, IT IS SEEN THAT NO NE OF THESE OPINIONS MAKE REFERENCE TO PROVISIONS OF SECTION 80 IC(3)(III) OF THE ACT WHICH IS ENABLING SECTION SO FOR RATE OF DEDUCT ION & PERIOD OF DEDUCTION SPECIFIED IN THIS SECTION AND HENCE ARE N OT RELEVANT FOR DECIDING THE MATTER IN THE PRESENT CASE. THEREFORE , THE CLAIM OF THE ASSESSEE ON THIS COUNT IS ALSO NOT TENABLE. 6.2. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE ON THE DECISION OF THE COORDINATE BENCH RENDERED IN TH E CASE OF TIRUPATI LG INDUSTRIES LTD., NEW DELHI VS.DCIT-CIRCLE-2, DEHRA DUN(SUPRA), WHEREIN THE COORDINATE BENCH HAS FOLLOWED THE DECISION REND ERED IN THE CASE OF ITAT CHANDIGARH B BENCH IN THE CASE OF DCIT VS. M/S.S.R.PARYAVARAN ENGINEERS PVT.LTD.(SUPRA). THE HONBLE COORDINATE BENCH IN ITA NO.991/DEL/2013, VIDE ITS ORDER DATED 29/01/2014, UNDER THE IDENTICAL FACTS, HAS DECIDED THIS ISSUE AS UNDE R:- 10.4. THE ONLY DISPUTE THAT ARISES FOR OUR CONSIDE RATION IS THE INTERPRETATION OF THE TERM 'INITIAL ASSESSMENT YEAR ' AND WHETHER THE SAME COMES WITH ANY RESTRICTION. THE REVENUE SEEKS TO TAKE THE COLOR FROM THE OBJECT OF INTRODUCING SECTION 80-IC. THE A .O. REFERRED TO POLICY OF THE GOVERNMENT FOR GIVING INCENTIVES TO T HE STATE OF UTTARANCHAL AND HIMACHAL PRADESH. IT IS WELL SETTLE D THAT EXTERNAL AIDS SHOULD NOT BE TAKEN FOR THE PURPOSE OF INTERPRETING THE STATUTE, WHEN THE LANGUAGE OF THE SECTION IS CLEAR AND UNAMBIGUOUS. A PLAIN READING OF SEC.80-IC(8)(V) WHICH DEFINES THE TERM 'INITIAL ASS ESSMENT YEAR' READ ITA NO.310/AHD/ 2014 SINTEX INDUSTRIES LTD. VS. CIT ASST.YEAR 2011-12 - 17 - WITH SEC.80-IC(8)(IX) WHICH DEFINES THE TERM 'SUBST ANTIAL EXPANSION' MAKES IT CLEAR THAT THERE IS NO RESTRICTION OR BAR ON MORE THAN ONE SUBSTANTIAL EXPANSION BEING UNDERTAKEN BY AN ASSESS EE. IN OUR VIEW, A UNIT CAN UNDERTAKE ANY NUMBER OF SUBSTANTIAL EXPANS IONS, IN THE ABSENCE OF ANY SPECIFIC RESTRICTION IN THE SECTION. THERE IS NO SUGGESTION IN THE LANGUAGE OF THE SECTION THAT INCENTIVE U/ S 80 1C IS NOT AVAILABLE IF THE ASSESSEE SUBSTANTIALLY EXPANDS FOR A SECOND OR THIRD TIME. SUBSTANTIAL EXPANSION REQUIRES ADDITIONAL INVESTMEN T AND RESULTS IN HIGHER PRODUCTION, EMPLOYMENT ETC. INDUSTRIALISTS H AVE TO BE ENCOURAGED TO UNDERTAKE SUBSTANTIAL EXPANSION. THE SECTION RECOGNIZES THIS FACT AND PROVIDES FOR AN INCENTIVE, IF AN ASSE SSEE UNDERTAKES 'SUBSTANTIAL EXPANSION'. 10,5. THE TERM 'SUBSTANTIAL EXPANSION' IS STATED IN S.80-IC(8)(IX) REQUIRES INVESTMENT IN PLANT 85 MACHINERY EXCEEDING ATLEAST 50% OF THE BOOK VALUE OF PLANT AND MACHINERY I.E. GROSS VA LUE BEFORE TAKING DEPRECIATION INTO ACCOUNT. IF SUCH SUBSTANTIAL EXPA NSION IS COMPLETED, THEN, FOR THE PURPOSE OF THIS SECTION, THE ASSESSME NT YEAR RELEVANT TO THE P.Y. IN WHICH SUCH SUBSTANTIAL EXPANSION IS COMPLET ED BECOMES THE INITIAL ASSESSMENT YEAR. ONCE IT BECOMES THE INITIA L ASSESSMENT YEAR CONSEQUENTLY UNDER SUB SECTION (3) THE ASSESSEE WOU LD BE ENTITLED TO 100% DEDUCTION OF PROFITS AND GAINS FOR A PERIOD OF 5 YEARS COMMENCING FROM SUCH INITIAL ASSESSMENT YEAR, AND T HEREAFTER THE % OF DEDUCTION FROM PROFITS COME DOWN. THE TERM 'INITIAL YEAR' HAS BEEN DEFINED, AS A YEAR IN WHICH SUBSTANTIAL EXPANSION I S COMPLETED. THERE IS NOTHING TO SUGGEST THAT THERE CANNOT BE A SECOND IN ITIAL YEAR IF A SECOND SUBSTANTIAL EXPANSION IS COMPLETED. EVEN IF AN EXIS TING UNIT WHICH IS CLAIMING 80 1C, UNDERTAKES FIRST SUBSTANTIAL EXPANS ION THEN ALSO THE YEAR OF COMPLETION OF THE SUBSTANTIAL EXPANSION WIL L BE THE 'INITIAL YEAR'. IF THE LITERAL MEANING OF THE TERM 'INITIAL ASSESSMENT YEAR' IS TO BE TAKEN, THEN THERE IS NO REQUIREMENT OF DEFINING THIS TERM IN THE SECTION. WE HAVE TO GO BY THE LANGUAGE OF THE SECTI ON. 10.6. THE CIT(A) DENIES THE DEDUCTION ON THE GROUND THAT IT WOULD AMOUNT TO EVERGREENING OF AN INCENTIVE PROVISION. S UB SECTION (6) OF S.80-IC READS AS FOLLOWS. ITA NO.310/AHD/ 2014 SINTEX INDUSTRIES LTD. VS. CIT ASST.YEAR 2011-12 - 18 - '6) NOTWITHSTANDING ANYTHING CONTAINED IN THIS ACT, NO DEDUCTION SHALL BE ALLOWED TO ANY UNDERTAKING OR ENTERPRISE U NDER THIS SECTION, WHERE THE TOTAL PERIOD OF DEDUCTION INCLUS IVE OF THE PERIOD OF DEDUCTION UNDER THIS SECTION, OR UNDER THE SECON D PROVISO TO SUB- SECTION (4) OF SECTION 80-IB OR UNDER SECTION 10C, AS THE CASE MAY BE, EXCEEDS TEN ASSESSMENT YEARS.' THIS SECTION IMPOSES A RESTRICTION FOR A TOTAL PERI OD OF 10 YEARS FOR CLAIMING THE DEDUCTION IN QUESTION, IRRESPECTIVE OF THE FACT WHETHER THE DEDUCTION IS CLAIMED U/S 80-IC OR U/S 80-IB OR U/S 10C AS THE CASE MAY BE. THUS THERE IS NO EVERGREENING OF THE PROVISIONS . THE ASSESSEE CANNOT CLAIM THE SAID DEDUCTION FOR A TOTAL PERIOD EXCEEDI NG 10 YEARS. THE DEDUCTION COULD BE ALLOWABLE ONLY FOR THE BALANCE P ERIOD OF 5 YEARS INCLUDING THIS ASSESSMENT YEAR 2009-10. ONLY THE RA TE OF DEDUCTION GOES UP. 10.7. THE CHANDIGARH 'B' BENCH OF THE TRIBUNAL IN T HE CASE OF M/S S.R.PARYAVARAN ENGINEERS P.LTD. (SUPRA) WAS CONSIDE RING A CASE WHERE THE ASSESSEE ORIGINALLY CLAIMING DEDUCTION U/S 80 I B(IV) OF THE ACT FROM THE A.Y. 1999-2000. FOR THE FIRST 5 YEARS IT HAD CL AIMED EXEMPTION OF 100%. THEREAFTER IT UNDERTOOK SUBSTANTIAL EXPANSION AND CLAIMED DEDUCTION U/S 80 IB(IV). THE AO REJECTED THE SAME A ND OBSERVED THAT BENEFIT COULD BE AVAILED U/S 80 1C AND AS THE SUBST ANTIAL EXPANSION WAS LESS THAN 50% OF THE VALUE OF PLANT AND MACHINERY T HE CLAIM IS TO BE REJECTED. THE TRIBUNAL OBSERVED THAT THE ASSESSEE I S ENTITLED TO DEDUCTION U/S 80-IC. IT HELD THAT MERE MENTION OF A WRONG SECTION WOULD NOT DISENTITLE THE ASSESSEE TO CLAIM THE ABOV E SAID DEDUCTION. TO OUR MIND THIS CASE LAW IS NOT DIRECTLY ON THE PO INT. 11. IN VIEW OF THE ABOVE DISCUSSION, AS ON A PLAIN READING OF THE SECTION AND INTERPRETATION OF THE TERM INITIAL ASSE SSMENT YEAR, WE CONCLUDE THAT THE CLAIM OF THE ASSESSEE IS ADMISSIB LE. EVEN IF A VIEW IS TAKEN THAT THERE IS SOME AMBIGUITY IN THE LANGUA GE OF THE SECTION, THEN, BEING AN INCENTIVE PROVISIONS, THE RATIO OF T HE DECISIONS OF THE HON'BLE SUPREME COURT IN THE CASE OF BAJAJ TEMPO (S UPRA), GWALIOR RAYON SILKS MFG.CO.LTD.(SUPRA) HAVE TO BE FOLLOWED AND BENEFIT GIVEN TO THE ASSESSEE. WE ALSO MAKE IT CLEAR THAT THE DED UCTION CANNOT BE EXTENDED BEYOND THE PERIOD OF 10 YEARS FROM THE A.Y . 2004-05. ITA NO.310/AHD/ 2014 SINTEX INDUSTRIES LTD. VS. CIT ASST.YEAR 2011-12 - 19 - 12. IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED. 6.3. THE AFORESAID DECISION OF THE COORDINATE BENCH WAS NOT SUBMITTED BEFORE THE LD.CIT, THEREFORE IT WOULD APPROPRIATE T HAT THE MATTER BE RESTORED TO HIS FILE FOR DECISION AFRESH, TAKING IN TO CONSIDERATION THE DECISION OF THE COORDINATE BENCH RENDERED IN THE CA SE OF TIRUPATI LPG INDUSTRIES LTD.(SUPRA). MOREOVER, THE REVENUE HAS NOT PLACED ANY CONTRARY BINDING PRECEDENT ON RECORD TAKING A CONTR ARY VIEW THAN THE VIEW EXPRESSED BY THE COORDINATE BENCH OF THIS TRIB UNAL IN THE CASE OF TIRUPATI LPG INDUSTRIES LTD.(SUPRA). THEREFORE, TH E ORDER OF THE LD.CIT IS HEREBY SET ASIDE AND THE MATTER IS RESTORED BACK TO HIS FILE FOR DECISION AFRESH. NEEDLESS TO SAY THAT THE LD.CIT WOULD AFFO RD SUFFICIENT OPPORTUNITY TO THE ASSESSEE. THUS, THE GROUNDS RAIS ED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 27 TH OF FEBRUARY, 2015 AT AHMEDABAD. SD/- SD/- ( .. ) ( ) ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 27/ 02 /2015 2*..,(.../ T.C. NAIR, SR. PS ITA NO.310/AHD/ 2014 SINTEX INDUSTRIES LTD. VS. CIT ASST.YEAR 2011-12 - 20 - !'#$%&' &$ / COPY OF THE ORDER FORWARDED TO : 1. # / THE APPELLANT 2. $% # / THE RESPONDENT. 3. 345 6 / CONCERNED CIT-IV, AHMEDABAD 4. 6 ( ) / THE CIT(A)-CONCERNED 5. 7(8$45 , *45. , 3 / DR, ITAT, AHMEDABAD 6. 8:;<) / GUARD FILE. ! / BY ORDER, %7$ //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 5/26.2.15(DICTATION-PAD 14 -PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 6/19/26.2.15 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.27.2.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 27.2.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER