The Commissioner Of Income-Tax, Patiala v. M/S Rai Bahadur Knitting Works, Ludhiana

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH I.T.R. No. 300 of 1995Date of decision: 5.10.2009. The Commissioner of Income-tax, Patiala. Vs. M/s Rai Bahadur Knitting Works, Ludhiana ......Applicant. ...Respondent CORAM:-HON'BLE MR.JUSTICE ADARSH KUMAR GOELHON'BLE MRS.JUSTICE DAYA CHAUDHARY PRESENT:Mr.Rajesh Sethi, Standing Counsel for revenue.None for the assessee. **** ADARSH KUMAR GOEL, J.(Oral) 1.Following question of law has been referred for opinion of thisCourt by the Income-Tax Appellate Tribunal, Chandigarh Bench,Chandigarh, arising out of its order dated 27.5.1993 in I.T.A.No.409/Chandi/1989 relating to assessment year 1985-86: “Whether on the facts and in thecircumstances of the case, the Appellate Tribunal was right in law in upholding the order of the CIT(A) allowing deductionunder Section 80HHC(1)(b)?” 2.One of the partners of the assessee died on 15.3.1984 and in hisplace his widow was taken as a partner during the period from 16.3.1984 to31.3.1984. The Assessing Officer made separate assessment for theAssessment Year 1984-85 in respect of period up to 15.3.1984 and periodfrom 16.3.1984 to 31.3.1984. This was done in view of provisions of I.T.R. No. 300 of 1995 [2] Section 188 of the Income-Tax Act, 1961 (for short,”the Act”). 3.For the next assessment year i.e. 1985-86, the assessee soughtbenefit under Section 80HHC of the Act by comparing its export turn overwith previous year comprising of 15 days from 16.3.1984 to 31.3.1984. Thesaid benefit was sought by moving application under Section 154 of theAct. The Assessing Officer rejected the claim on the ground that eventhough, technically, two separate assessments were made, export turnoverof the previous year, to be taken into account for comparison, has to be forthe whole year. The CIT(A), however, held that since there was separateassessment for the period from 16.3.1984 to 31.3.1984, this period couldbe treated as previous year. This view has been upheld by the Tribunal. 4.We have heard learned counsel for the revenue. 5.Learned counsel for the revenue submits that for purposes ofSection 80 HHC, the words 'previous year' should refer to whole of theprevious year even if separate assessments were made for the period priorto death of a partner and period subsequent thereto. Even though thissubmission merits consideration, having regard to the fact that scheme ofthe provision has itself undergone substantial change and this question maynot frequently arise, we leave the question open. 6. The reference is disposed of accordingly. (ADARSH KUMAR GOEL) JUDGE October 5, 2009 raghav (DAYA CHAUDHARY) JUDGE