Taxap/82/2019 Of Principal Commmissioner Of Income Tax 2 v. Maps Enzymes Limited

C/TAXAP/82/2019 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 82 of 2019 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE J.B.PARDIWALA Sd/-Sd/- andHONOURABLE MR.JUSTICE A.C. RAOSd/-==========================================================1 Whether Reporters of Local Papers may be allowed to Yessee the judgment ?2 To be referred to the Reporter or not ?Yes3 Whether their Lordships wish to see the fair copy of the Nojudgment ?4 Whether this case involves a substantial question of law Noas to the interpretation of the Constitution of India or any order made thereunder ?==========================================================PRINCIPAL COMMMISSIONER OF INCOME TAX 2 VersusMAPS ENZYMES LIMITED ==========================================================Appearance:MRS MAUNA M BHATT(174) for the Appellant(s) No. 1MR B S SOPARKAR(6851) for the Opponent(s) No. 1========================================================== CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALAandHONOURABLE MR.JUSTICE A.C. RAO Date : 06/08/2019ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1.This tax appeal under Section 260A of the Income Tax Act, 1961 (for short “the Act, 1961”) is at the instance of the Revenue and is directed against the order passed by the Income Tax Appellate Tribunal, SMC Bench, Ahmedabad dated 2[nd] August, 2018 in the ITA No.267/Ahd/2015 for the A.Y. 2008-09. 2.This tax appeal was ordered to be admitted on the following substantial question of law: “Whether the Appellate Tribunal has erred in law and on facts in deleting the disallowance of claim of Rs.64,04,327/- u/s 80JJA of the Income Tax Act, 1961 though the years was eighth year of the business operation ?”” 3.It appears from the materials on record that the appellant-assessee filed its e-return of income on 28[th ]September, 2008, declaring its total income of Rs. NIL after claiming deductions of Rs.19,21,298/- and Rs.64,04,327/- under Sections 80IB and 80JJA respectively. The return of income was processed under Section 143(1) of the Act. The scrutiny assessment under Section 143(3) of the Act was finalized on 3[rd] May, 2010, determining the total income at Rs.6,17,217/- 4.The case was re-opened by issuing notice under Section 148 dated 19[th] November, 2012. The reasons recorded in the notice under Section 148 are as follows: “On perusal of the records, it is noticed that the assessee has claimed deduction under section 80JJA of the Act amounting to Rs.64,04,327/-. The assessee had commenced its business in previous year 1999-2000 relevant to A.Y.2000-01. Thus, this was the eighth year of claim of deduction under section 80JJA of the Act. However, the deduction under section 80JJA of the Act was admissible for a period of five years only from the previous year in which the business commences. Hence the assessee is not entitled for deduction under section 80JJA 0f the Act in A.Y2008-09 as mentioned above. Further, the assessee has also claimed deduction under section 801B of the Act. The deduction under section 801B is to be restricted (4)30% of eligible profit as per the provision. Thus the assessee has wrongly claimed deduction under section 80JJA of the Act as worked under: Wrong claim of deduction u/s.80JJA of the ActRs.40,50,977/- 3.In view of the above facts, 1 have reasons to believe that the assessee has wrongly claimed deduction u/s.80JJA and thereby failed to furnish accurate particulars of its income to the tune of Rs.40,50,977/- which has escaped assessment to that extent for the assessment year 2008-09 and is required to be reassessed as there was a failure on the part of the assessee to disclose fully and truly all material facts.” Wrong claim of deduction u/s.80JJA of the ActRs.40,50,977/- 3.In view of the above facts, 1 have reasons to believe that the assessee has wrongly claimed deduction u/s.80JJA and thereby failed to furnish accurate particulars of its income to the tune of Rs.40,50,977/- which has escaped assessment to that extent for the assessment year 2008-09 and is required to be reassessed as there was a failure on the part of the assessee to disclose fully and truly all material facts.” 5.The appellant-assessee objected to the reopening of the proceedings under Section 147 of the Act. Notice under Section 143(2) of the Act came to be issued on 19[th] August, 2013 upon the assessee. The final show-cause notice under Section 142(1) of the Act was issued dated 14[th] February, 2014. In response to the same, the assessee submitted as under: ”2.01As provided u/s. 80JJA of The Income Tax Act, 1961 exemption under the provision of such section is available up to 5 (five) consecutive years beginning with the assessment year relevant to previous year in which such business commences. 2.2In show cause notice your good self has pointed out as under: “It is stated that on perusal of the records, it is noticed that you have claimed deduction under section 80JJA of the Act amounting to Rs. 64,04,327/-. The business was commenced in previous year 1999-2000 relevant to Asst. Year 2000-01. Thus, this was the eighth year of claim of deduction under section 80JJA of the Act. Further, the deduction under section 80JJA of the Act was admissible for a period of five years only from the previous year in which the business commences.” 2.03 Without prejudice to your notice we would like to distinguish provision laid down u/s. 80JJA of The Income Tax Act, 1961. Section is reproduced as under: ”80JJA. Where the gross total income of an assessee includes any profits and gains derived from the business of collecting and processing or treating of bio-degradable waste for generating power (or producing bio fertilizers, bio pesticides or other biological agents or for producing bio-gas or making pellets or briquettes for fuel or organic manure, there shall be allowed in computing the total income of the assessee, (a deduction of an amount equal to the whole of such profits and gains for a period of five consecutive assessment years beginning with the assessment year relevant to the previous year in which such business commences)” 2.4On going through words and language of section 80JJA of The Income Tax Act, 1961 it is specifically mentioned the words in a section "beginning with the assessment year relevant to the previous year in which business commences" In your show case notice your good self has pointed out that "Only from the previous year in which business commences." Here "SUCH" word is missing. Financial year 2003-04 relevant to Asst. Year 2004-05 was our first year of claim in which we have started our manufacturing of Enzyme which qualify for deduction u/s. 80JJA of The Income Tax Act, 1961. To get deduction u/s. 801B of The Income Tax Act, 1961 the section is clear. To avail benefit under this section "commencement of business" is there. But as provided u/s. 8OJJA it is absolutely clear that "commencement of such business". 2.05 Considering above language and words used in thesection 8011A of The Income Tax Act, 1961 it is clear that assessee may claim such deduction at any time, meaning thereby the year in which such business is commences and not the initial year from which business was commenced. 3.00 In facts, we have started our production of "Enzyme" which qualify for deduction u/s. 8OJJA of The Income Tax Act, 1961 from the Financial Year 2003-04 relevant to Asst. Year 2004-05. Its provided under the section itself this deduction may available to the assessee consecutive for five years from the year beginning with the year in which such business commences. 2.05 Considering above language and words used in thesection 8011A of The Income Tax Act, 1961 it is clear that assessee may claim such deduction at any time, meaning thereby the year in which such business is commences and not the initial year from which business was commenced. 3.00 In facts, we have started our production of "Enzyme" which qualify for deduction u/s. 8OJJA of The Income Tax Act, 1961 from the Financial Year 2003-04 relevant to Asst. Year 2004-05. Its provided under the section itself this deduction may available to the assessee consecutive for five years from the year beginning with the year in which such business commences. 3.01 Therefore Asst. Year 2008-09 is a last and fifth consecutive year of such deduction. 3.02 In support of this facts, we have to submit that the Financial Year 2003-04 i.e. Asst. Year 2004-05 was our first year of the claim. During assessment proceedings Leaned Assessing Officer has asked us a specific question which is produced as under: "8. Show cause deduction of section 80JJA is allowable during the year under consideration as no such deduction was claimed in earlier year. " 6.The Assessing Officer took the view that the assessee had commenced the business of manufacturing and exporting the biological agents (Enzymes) in the F.Y.1999-2000 relating to the A.Y.2000-01. According to the Assessing Officer as per the provision of Section 80JJA, the deduction would be available only for a period of five years from the initial year in which the business commenced. The Assessing Officer took the view that the deduction was allowable upto A.Y.2004-05 being the fifth and the last year for the claim. The year under consideration was the eighth year from the year, in which, the business eligible for deduction under Section 80JJA was commenced. 7.In such circumstances, referred to above, the deduction of Rs.64,07,327/- claimed under Section 80JJA came to be disallowed and was added to the total income of the assessee. At the same time, the assessee was held eligible for the deduction under Section 80IB at the rate of 30% of the eligible profit of the business carried out by the assessee. 8.The appellant, being dissatisfied with the order of the Assessing Officer, preferred an appeal before the Commissioner of Income Tax. The Commissioner of Income Tax dismissed the appeal and thereby affirmed the order passed by the Assessing Officer. While dismissing the appeal, the CIT (A), observed as under: “On a careful consideration of entire facts of the case, it is noted that the appellant is in the business of manufacturing enzymes. It started production of enzymes from A.Y. 2000-2001. They are producing biological agents, biocatalyst which is used in various industries like textiles, leather, baking, brewing, alcohol, detergent, starch etc. The enzymes are produced by treating agricultural biodegradable waste i.e. wheat bran flax, maize grits, de-oil groundnut cake etc. which are chemically processed for producing the enzymes. The appellant has submitted that the process of manufacturing was changed in the year 2003 and it had adopted new state of art technique of solid State fermentation technology with the newly developed and isolated microorganisms from soil. The technology was received from the U.S. Company. The claim is of no help to the appellant as, the product nature, that is, enzyme remains the same. The claim of the appellant that since it had employed new process from 2003, this year should be treated as first year of production, cannot be accepted as the appellant was producing 'enzyme' earlier as well as it is producing ‘enzyme’ now. The deduction is available in section 80JJA for processing or treatment of biodegradable waste for generating power or producing bio fertilizers, biopesticides or other biological agents etc. The appellant falls in the category of producer of biological agents and therefore, the deduction has been claimed. The appellant is rightly entitled for the deduction as it clearly falls in the definition of section 80JJA but the year of production has to be taken from A.Y.2000-2001, as the appellant has begun production tram that year. it has started producing enzymes from that year. It is not relevant for the provisions of section 80JJA that it has changed the manufacturing process for producing the enzymes. It has not been able to demonstrate that it has completely changed the product and the earlier product which was being produced is not being produced now and a new type of product which is different and not an enzyme is being produced now. The appellant still fails in the same category of the producer of biological agent. Therefore, the claim of the appellant that the first year of production should be taken as A.Y. 2004-05 is not acceptable. The other important aspect which is to be kept in mind is that section 80JJA provide the calculation of five years from the year in which “such" business commences. It is not related to the year in which the deduction is claimed for the first time as is available in section 80I-A etc. Therefore, the claim of the appellant cannot be accepted and I am constrained to uphold the decision of the A0. The appellant has also placed reliance on the judgement of Honourable Gujarat High Court in the case of T J Agro Fertilisers Pvt. Ltd. (supra). I have carefully gone through the judgement delivered by Honourable High Court, it is noted that the facts of the case are different. In the present case, the limitation of the number of years were involved whereas in that case the allowability of the claim itself was involved. Accordingly, the judgement is respectfully distinguished. The claim of the appellant is not being allowed on the basis of limitation. It is not a case where the dispute is regarding the entitlement of the claim and the manufacturing activity of the assessee. The appellant is otherwise entitled for the claim considering the activity of production of biological agents but since five years from the commencement of business have elapsed it shall not be entitled for deduction under section 80JJA any further. The other judgements relied by the appellant are also respectfully distinguished as the facts and dispute involved are entirely different. The appellant has also disputed that all the details regarding the claim of deduction were given by it to the A0 in the first round of proceedings and therefore the reopening is without any basis. The claim of the appellant is not acceptable. The reopening was done on 09/11/2012 which is within four years from the end of the assessment year. The facts clearly show that the first year of commencement of manufacturing was A.Y. 2000-2001 whereas, the claim was made in the present year which is after six years from the end of that year. The claim is therefore factually incorrect. The appellant has also not given any evidence to demonstrate that the allowability of deduction with reference to the year of production was examined by the AO during the course of scrutiny proceedings. Therefore, the reopening cannot be considered to be on the basis of change of opinion. Accordingly, the reopening of the case is held to be valid” 9.The appellant, being dissatisfied with the order passed by the CIT(A), preferred further appeal before the Income Tax Appellate Tribunal. The Tribunal allowed the appeal of the respondent-assessee holding as under: “I find that. as clearly borne out of material on record, the first year in which 80JJA deduction was claimed, was the assessment year 2004-05 and, during the course of scrutiny assessment proceedings. the Assessing Officer had specifically asked the assessee to “show cause deduction of section 80JJA is allowable during the year under consideration as no such deduction was claimed in the earlier years”. The claim was explained at length and the Assessing Officer duly accepted it as the first year of claim. By this basis, the current year’s claim is fifth and final year. There is no infirmity in the claim thus. The mere fact that the assessee was involved in somewhat similar activity is not really relevant inasmuch as the character of activity was materially distinct from assessment year 2004-05 and that aspect of the matter, by the Assessing Officer having accepted it as first year of claim, has reached finality. In view of these discussions, I find merits in the plea of the assessee. The disallowance of claim under section 80JJA is thus devoid of legally sustainable merits, and cannot be upheld. Accordingly, I direct the Assessing Officer to delete the impugned disallowance of section 80JJA claim of Rs.64,04,327/-” 10.Thus, the Appellate Tribunal took into consideration the fact emerging from the record that the first year, in which, the Section 80JJA deduction was claimed, was the A.Y. 2004-05 and during the course of the scrutiny assessment proceedings, the Assessing Officer had specifically called upon the assessee to show that the deduction under Section 80JJA was allowable during the year under consideration and no such deduction was claimed in the earlier years. The Appellate Tribunal further notes, in its impugned order, that the Assessing Officer had duly accepted it as the first year of claim. Considering the same, the Appellate Tribunal took the view that the claim of the current year was the fifth and the final year. 11.The revenue, being dissatisfied with the order passed by the Appellate Tribunal is here before this Court with the present appeal. 12.Ms. Bhatt, the learned counsel appearing for the revenue vehemently submitted that the Appellate Tribunal committed an error in passing the impugned order. It is submitted that the business of the assessee had commenced in the F.Y. 1999- 2000 relevant to the A.Y.2000-2001. Therefore, the first year for the claim of deduction under Section 80JJA of the Act should be determined as the A.Y.2000.2001 and not A.Y. 2004-05. Ms. Bhatt submitted that the deduction under Section 80JJA of the Act is admissible for the period of five year only from the year, in which, the business commenced. 13.In such circumstances, referred to above, Ms. Bhatt prays that there being merit in this appeal, the same be allowed and the substantial question of law, as framed by this Court, be answered in favour of the revenue and against the assessee. 14.On the other hand, Mr. B.S. Soparkar, the learned counsel appearing for the assessee has vehemently opposed this appeal. Mr. Soparkar submitted that no error, not to speak of any error of law, could be said to have been committed by the Appellate Tribunal in passing the impugned order. 15.The principal argument of Mr. Soparkar is that the business of the assessee might have commenced in the F.Y. 1999-2000 relating to the A.Y.2000-2001, but the process of manufacturing was changed in 2003. To put it in other words, the argument of Mr. Soparkar is that for the first time, the Enzyme in question came to be manufactured in the year 2003, for which, the deduction has been claimed. In such circumstances, according to Mr. Soparkar, the deduction was claimed, for the first time, in the A.Y. 2004-05. 15.The principal argument of Mr. Soparkar is that the business of the assessee might have commenced in the F.Y. 1999-2000 relating to the A.Y.2000-2001, but the process of manufacturing was changed in 2003. To put it in other words, the argument of Mr. Soparkar is that for the first time, the Enzyme in question came to be manufactured in the year 2003, for which, the deduction has been claimed. In such circumstances, according to Mr. Soparkar, the deduction was claimed, for the first time, in the A.Y. 2004-05. 16.Mr. Soparkar made available for us, a paper-book of the documents, i.e, the very same paper-book which was before the Appellate Tribunal. Mr. Soparkar invited the attention of this Court to a letter issued by the Income Tax Officer to the respondent-assessee, calling for certain information. The information, called for, reads as follows: “What is Enzyme, it is used by whom and for what purposes. Furnish copies of sample sales bills. Furnish proof of staring of business of manufacture or production between 1.4.1991 to 31.03.2002. Show how deduction of section 80JJA is allowable during the year under consideration as no such deduction was claimed in the earlier year. “ 17.The questions which were raised by the Income Tax Officer came to be answered by the respondent-assessee as under: “We are a core industrial Biotechnology Company producing various Enzymes which are Bio-logical agents, Bio-catalyst using Solid State Fermentation (SSF) technology.The main Enzymes we are producing as are follows: 1)Alpha Amylase Enzyme (Palkozyme Ultra 1OOS, Palkozyme HT Plus, Palkozyme Plus SPL. Palkozyme CLL, Palkolase HT) 2)Fungal Alpha Amylase Enzyme (Pidkoamylo SOS) 3)Alkaline Protease Enzyme (Palkobate Ultra 10X) 4)Acid Protease Enzyme (Palkocid Conc. 80S) 5) Protease + Lipase Enzymes (Palkosoak Conc.) 6) Amylase + Protease Enzymes (Palkofeed AP, Palkotreat SP 60) 7) Amylase + Protrase + Beta Glucanase (Palkofeed APG) 8) Fungal Protease Enzyme (Palkotase ACP 500S) 9) Neutral Celulase Enzyme (Palkostone NCA 5) 10) Xylanase Enzyme (Palkobake X 360S) 11) Catalase Enzyme (Palkoperox CT 10L) These Enzymes are used in various industries like Textile, Leather, Baking, Brewing. Alcohol. Detergent, Starch, Animal feed, Effluent treatment, etc. We have enclosed the technical bulletins, MSOS (Material Safety Data Sheet) and product labels of these Enzymes for your reference. As regards to the technology for producing these Enzymes, we are treating agriculture biodegradable waste ; i.e. Wheat Bran Flex, Maize Grits, De-oil Groundnut cake, De-oil Soya cake, Rioe Bran Flex, Sorghum straw, ; etc. as substrate media using Solid State Fermentation by newly isolated micro-organisms like Bacillus Subtitles. Bacillus lichenifomis, Aspergillus Niger, Trichoderma Reseei, etc., from the year 2003. We inoculate these micro-organisms in the above agriculture biodegradable wastes with 40-50% moisture content for Solid State Fermentation. The following fermentation parameters maintained to produce Enzymes:' Temperature: 35-40'C Relative humidity: 85% Incubation/fermentation time: 48 to 64 hours After the end of incubation I fermentation, the biomass is dried and pulverised to get Crude Enzyme. This Crude Enzyme is then standardized with various diluents and tillers to make the final finished goods i.e. Enzyme powder and in this Crude Enzyme is timber extracted with buffer solution and filtrated to get final finished goods i.e. Enzyme liquid. Further, these Biological agents, Bio-catatyst (Enzymes) produced are from agricultural biodegradable wastes involve Bio-remediates, otherwise causing issues of agro-waste management Hence the end products (Enzyme) so produced can be further utilized for Bio-remediation and Biodegradable waste management Based on the above explanations, we request you to cover us under the section 130.1.IA of the Income Tax Act.” After the end of incubation I fermentation, the biomass is dried and pulverised to get Crude Enzyme. This Crude Enzyme is then standardized with various diluents and tillers to make the final finished goods i.e. Enzyme powder and in this Crude Enzyme is timber extracted with buffer solution and filtrated to get final finished goods i.e. Enzyme liquid. Further, these Biological agents, Bio-catatyst (Enzymes) produced are from agricultural biodegradable wastes involve Bio-remediates, otherwise causing issues of agro-waste management Hence the end products (Enzyme) so produced can be further utilized for Bio-remediation and Biodegradable waste management Based on the above explanations, we request you to cover us under the section 130.1.IA of the Income Tax Act.” 18.The aforesaid questions were raised by the Income Tax Officer in connection with the A.Y. 2004-05. Ultimately, the assessment order for the A.Y. 2004-05 came to be passed as under: “The return of income was filed by the assessee company on 31.10.2004 showing income of Rs.NIL after claiming deductions under chapter VIA of the Income Tax Act, 1961. The return was processed under section 143(1) without making any adjustment on 04.03.2005. The case was selected for scrutiny assessment by issuing notice u/s.143 [2] on 27-07-2005 which was duly served on the assessee by RPAD. The assessee is engaged in the business of Manufacturing of Enzyme. During the course of assessment proceedings Shri D.R. Thakkar C.A., A.R. attended alongwith the director Shri Dipal P. Palkhiwala, director from time to time as per the dates mentioned in the order sheet and produced details called for. During the course of assessment proceedings the following points arose for consideration: Claim of deduction u/s 80IB is allowable after reducing the profit to the extent of the deduction claimed under section 80HHC and similarly the claim of other deduction is to be computed after reducing the deduction claimed in other sections of the chapter VIA. However, since there is eligibility of the deduction in excess of the positive income and the fact that the assessee company has paid tax on book profit of Rs. 36,58,565/4 amounting to Rs. 3,02,576/- including interest the return income as per the return filed on 31-10-2004 is accepted u/s.143(3) of the Act. Book profit of Rs. 36,78,565/- remains unchanged. Give credit for prepaid taxes. Charge interest u/s 234A,B,C and D as the case may be. Issue D.N./challan accordingly.” 19.It is also pertinent to note that the revenue accepted the order of assessment. 20.One another important aspect which Mr. Soparkar brought to our notice is that the claim towards deduction for the A.Ys. 2004-05, 2005-06, 2006-07 and 2007-08 came to be allowed. It is only with respect to the fifth and the last A.Y.2008-09 that this issue was raised by the department. According to Mr. Soparkar, having allowed the deduction under section 80JJA for four consecutive years, the department could not have raised the objection with respect to the last and the fifth year of the assessment i.e., 2008-09. Mr. Soparkar, in support of his aforesaid submission, has placed reliance on two orders. One order passed by this Court in the case of Principal Commissioner of Income Tax vs. Quality BPO Services Pvt. Ltd., Tax Appeal No.439 of 2016, decided on 14[th] June, 2016 and the judgment of the Bombay High Court in the case of Simple Food Products (P.) Ltd. vs. Commissioner of Income-Tax-II, Nagpur, reported in (2017) taxmann.com 239 (Bombay). 21.We take notice of the fact that the decision of this Court in the case of Quality BPO Services Pvt. Ltd. (supra) was one with respect to disallowance of deduction as claimed under Commissioner of Income Tax vs. Quality BPO Services Pvt. Ltd., Tax Appeal No.439 of 2016, decided on 14[th] June, 2016 and the judgment of the Bombay High Court in the case of Simple Food Products (P.) Ltd. vs. Commissioner of Income-Tax-II, Nagpur, reported in (2017) taxmann.com 239 (Bombay). 21.We take notice of the fact that the decision of this Court in the case of Quality BPO Services Pvt. Ltd. (supra) was one with respect to disallowance of deduction as claimed under Section 10B of the Act, 1961, whereas in the Bombay High Court decision in the case of Simple Food Products (P.) Ltd. (supra), the subject matter of deduction under Section 80IB of the Act. However, the ratio of both the decisions is that where the deduction is granted for an initial assessment year, the same cannot be rejected for the subsequent assessment years unless the relief for the initial year has withdrawn. We may quote the relevant observations made by the Bombay High Court in Simple Food Products (supra). “According to us. the entire issue is no longer res-integra. The impugned order of the Tribunal has. after recording that the appellant Assessee relies upon the decision of this Court in Paul Brothers (supra) has not dealt with the same. It gives no finding as to why and in what manner it would not apply to the present facts. Further, we find that distinction which has been made in the impugned order of the Tribunal with regard to Dinshaw Frozen Foods Ltd. (supra) viz. that the assessment in that case has been completed under Section 143(3) of the Act in initial year and it is only in such cases that the Revenue be barred from denying the claim for deduction in the subsequent Assessment Years, unless the claim for deduction has been withdrawn in the initial year when deduction was claimed and allowed unlike an assessment which is completed under Section 143(1) of the Act. We have perused the decision of this Court in Dinshaw Frozen Food Ltd. Nagpur (supra) which in turn has followed the decision Paul Brothers (supra). We note that there is no finding in the two orders to the effect that the in the initial year the claim under Section 8OIA/IB of the Act was granted by virtue of an order passed under Section 143(3) of the Act. Nothing has been brought on record to indicate that there has been some change in manufacturing process from that existing when the claim was allowed in the initial year i.e. Assessment Year 1996-1997 and subject Assessments. The intent/object of the deduction under Section 8OIA/IB of the Act is to encourage setting up of industries to manufacture goods which are not specified in the Eleventh Schedule to the Act. (k) The distinction sought to be made by Mr. Bhattad learned counsel for the Revenue that the claim for deduction in Paul Brothers (supra) the deduction was an investment based deduction, while in the present case. we are concerned with the performance base deduction. This is in fact no distinction. In absence of the Revenue being able to establish that for the subject Assessment Years. the facts with regard to the performance were different from facts with regard to the performance in which the claim for deduction in initial year was allowed, the grant of deduction in the subsequent subject Assessment Year cannot be withheld. The other issue raised by Mr. Bhattad that merely because a claim was allowed in an earlier year would not prohibit the revenue from disallowing the claim in subsequent assessment years is no longer res-integra as this Court in Paul Brothers (supra) as it is categorically held that in absence of deduction granted in the initial Assessment Years being withdrawn, the relief for subsequent Assessment Years could not be withheld. The basis for the same is found in sub-clause (3) under Section 80lA/IB of the Act which gives deduction for 10 consecutive years to the profit and gains of an Industrial undertaking from initial year of assessment when the deduction was allowed. subject to the condition laid down therein. It is not the Revenue's contention that the condition in clause (3) of Section 8013 of the Act has not been fulfilled. Therefore, once deduction is granted in the initial Assessment Year, the same would continue for the period of 10 consecutive year unless the relief for initial year is also withdrawn at the time of withholding the relief under Section 80lA/lB of the Act. (I)Mr. Bhattad also points out that under the Act, there is distinction between assessment which has been completed under Section l43(3) of the Act and intimation given to Assessee under Section 143(1) of the Act. In support of, he places reliance in Rajesh Jhaveri Stock Brokers, (supra) which brings out the distinction, by pointing out that an intimation under Section 143(1) of the Act is only a ministerial act and no examination of the claim is made by the Assessing Officer. However, one must recognize the fact that the aforesaid decision in case of Rajesh Jhaveri Stock Brokers (supra) was rendered in the context of reopening of assessments. As against that the decisions of this Court in Paul Brothers (supra) and Dinshaw Frozen Food Ltd. Nagpur (supra) were while dealing with deduction under Chapter VI-A of the Act. This Court in the above two cases has very categorically held that in absence of relief/deduction for the initial year being withdrawn, the relief under Chapter Vl-A of the Act (Section 801A/801B of the Act) in case of Dinshaw Frozen Food Ltd, Nagpur (supra) cannot be withheld for the subsequent years. The manner in which the relief has been granted in the initial Assessment Year is not determinative for withholding the relief in the subsequent Assessment Years. In-fact, in Paul Brothers (supra), our Court had occasion to observe the deduction allowed in the initial year i.e. Assessment Year, l980-l98] was without any discussion. (m) According to us, the decision of this Court in Paul Brothers (supra) and the Dinshaw Frozen Food Ltd. Nagpur (supra), conclude the issue in favour of the appellant Assessee and against the Revenue. (n) Thus, the substantial questions of at No.1 is answered in the affirmative i.e. in favour of the appellant-Assessee and against the Revenue. 5. Regarding Question No.2::- (a) Mr. Thakar, learned counsel for the appellant Assessee states that in view of our answer to question No.1 above, he does not press this question. (b) Therefore, no occasion to examine question No.2 arises 6.Accordingly, appeal allowed. No order as to costs.” (m) According to us, the decision of this Court in Paul Brothers (supra) and the Dinshaw Frozen Food Ltd. Nagpur (supra), conclude the issue in favour of the appellant Assessee and against the Revenue. (n) Thus, the substantial questions of at No.1 is answered in the affirmative i.e. in favour of the appellant-Assessee and against the Revenue. 5. Regarding Question No.2::- (a) Mr. Thakar, learned counsel for the appellant Assessee states that in view of our answer to question No.1 above, he does not press this question. (b) Therefore, no occasion to examine question No.2 arises 6.Accordingly, appeal allowed. No order as to costs.” 22.We may also quote the relevant observations made by this Court in Quality BPO Services Pvt. Ltd. (supra). “2. The issue pertains to the assessment year 2008-09 and concerns the respondent-assessee's deduction of Rs. 67.08 lacs (rounded off) claimed under Section 10B of the Income Tax Act, 1961 ['the Act' for short]. The contention of the Revenue is that, the assessee had not produced the approval by the Board appointed for such purpose by the Central Government in exercise of powers conferred under Section 14 of the Industries (Development and Regulation) Act, 1951, as required under Explanation 2 Clause (iv) to Section 10B of the Act. 3. Learned counsel Mr. Patel for the Revenue vehemently contended that the assessee had obtained such approval certificate from the Director, Software Technology Park of India, which may be a Government of India Authority cannot substitute the authority prescribed in Clause (iv) to the said explanation. 4. This contention we are not inclined to examine in view of the fact that, admittedly, in the first year of claim of the assessee under Section 10B of the Act i.e. the assessment year 2007-08, such claim was granted. In the subsequent assessment years also, i.e. in the assessment years 2010-11 and 2011-12, such claim was made and accepted by the Department. We may notice that Section 10B pertains to special provisions in respect of newly established hundred per cent export-oriented undertakings. Sub-section (1) of Section 10B provides for deduction of profits and gains derived by a hundred per cent export-oriented undertaking from the export of articles or things or computer software for a period of ten consecutive years beginning with assessment relevant to the previous year in which the undertaking begins to manufacturer, produce articles or things or computer software from the total income of the assessee. Thus, the provision envisaged is for a period of ten consecutive years commencing from the first year during which the undertaking begins to manufacture or produce articles, things or computer software, as the case may be. When the Revenue therefore, did not question the certification by the Director, Software Technology Park of India, in the initial year of the claim made by the assessee as well as in the subsequent years, it would not be open for the Revenue to pick one year out of a total of ten consecutive years for different treatment that too without offering any explanation for the same. We would refer to Gujarat High Court Judgement in case of Saurashtra Cement & Chemical Industries Ltd. vs. Commissioner of Income Tax, Gujarat-V reported in 123 ITR 669 and a later judgement in Tax Appeal No. 1367 of 2010 dated 14.09.2011 in case of Commissioner of Income Tax vs. M/s. T.J.Agro Fertilizers Pvt. Ltd. 5.In the result, tax appeal is dismissed.” 23.The Delhi High Court, in Commissioner of Income-Tax vs. Rio Tinto India (P.) Ltd., reported in(2012) taxmann.com 259 (Delhi), observed as under: 5.In the result, tax appeal is dismissed.” 23.The Delhi High Court, in Commissioner of Income-Tax vs. Rio Tinto India (P.) Ltd., reported in(2012) taxmann.com 259 (Delhi), observed as under: “This Court is of the opinion that reasoning given by the AO in his order for the assessment year 1998-99 is clear and conclusive. It accepted the assessee's contentions with regard to having commenced business with effect from 01.01.1997. It was only on the basis of such a fundamental premise that income was assessed and certain disallowances were made. In these circumstances, it would be unfair for the revenue to contend for each successive assessment year that the assessee had to establish that it "commenced business." The evidence on record clearly shows that substantial services were being rendered and salaries etc. were disbursed even though on reimbursement basis. The mere fact that other service charges are meagre in nature would not, in any way, influence the decision as to whether business was commenced. Furthermore, in line with the decision of this Court in ESPN (supra) the question of date of commencement of business is one of fact. Having regard to these circumstances, it is held that the findings of the Tribunal in the impugned common judgment and order are sound and do not call for interference. The question of law is accordingly answered in favour of the assessee and against the revenue.” 24.We are of the view that the Appellate Tribunal committed no error, not to speak of any error of law in passing the impugned order. When the department thought fit to grant the deduction for four consecutive years, there was no reason to raise any objection with regard to admissibility of such deduction under Section 80JJA in the fifth and the final assessment year 2008-09. 25.In view of the aforesaid, this appeal fails and is hereby dismissed. The substantial question of law, formulated by this Court, is answered in favour of the assessee and against the Revenue. (J. B. PARDIWALA, J) (A. C. RAO, J) Vahid