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Issues involved: Assessment of compliance with the requirements of section 84(2)(iv) of the Income-tax Act, 1961 for the assessment year 1967-68, and section 80J(4) for the assessment years 1968-69 and 1969-70.
Assessment Year 1967-68: The Income-tax Appellate Tribunal previously ruled that a new industrial undertaking did not need to employ a minimum of 10 workers at all times during the year, as long as there was an average of 10 workers employed. The High Court affirmed this view, emphasizing that substantial compliance with the requirement was sufficient. The court referred to previous judgments to support this interpretation. The questions in this reference were answered affirmatively in favor of the assessee. Assessment Years 1968-69 and 1969-70: Similarly, for these assessment years, the Tribunal's decision was upheld by the High Court. The court reiterated that substantial compliance with the requirement of employing ten or more workers during the relevant period was essential for claiming relief. The court emphasized that there was no strict rule for determining substantial compliance, and each case should be assessed based on the facts presented. Citing previous judgments, the court ruled in favor of the assessee for the first questions and against for the second questions in this reference. In conclusion, the High Court upheld the Tribunal's decisions for both assessment years, emphasizing the importance of substantial compliance with the worker employment requirements for claiming relief under the Income-tax Act, 1961.
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