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TMI Blog2011 (10) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... ded provision, he had the benefit of five years period of exemption from payment of income tax as per the amended provision. 2. The assessee is engaged in the business of software development and exports. The assessee is recognized as a 100% export oriented undertaking. Therefore, the respondent/assessee is entitled to the benefit of the tax holiday under Section 10B of the Income Tax Act (for short hereinafter referred to as the Act). Initially, Section 10B conferred a tax holiday for a period of 5 years out of a band of 8 years. The band of 8 years was to commence from the date the eligible unit commenced software development. The respondent claimed the benefit of tax holiday in accordance with the un-amended provision of section 10B for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner held that there is nothing in the Act to provide that the units which have fully availed the benefit of exemption under Section 10B in accordance with the provisions of Section 10B(7) as it stood originally shall not get the benefit of amended provision introduced by Income Tax (Second Amendment) Act, 1998, Therefore, he held that the assessee is entitled for exemption under Section 10B in respect of its Leela Galleria Units for the assessment year under consideration. Aggrieved by the said order, the revenue preferred an appeal to the Tribunal. The Tribunal after taking note off the object with which the amendment was introduced as well as the amended provisions held that the provisions of Section 10B do not place the old and new EOU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. Admittedly, in the instant case, the assessee commenced production in the assessment year 1993-94 and therefore, he has availed the benefit of 5 years consecutively from that day, which ended in 1997-98. The amended provision came into force only in 1999 after the expiry of 5 years period. Therefore, as the assessee had already availed the benefit under the unamended provision, he is not entitled, to the benefit of the amended provision. Therefore, the Assessing Authority was justified in denying the said benefit, which has been wrongly interfered with by the Appellate Authorities, and therefore, he submits that a case for interference is made out. 5. Per contra, the learned Counsel for the assessee supported the impugned order. 6. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year relevant to the previous year in which the said undertaking begins to manufacture or produce articles or things or computer software, as the case may be. The object behind this amendment, which is extracted in the order of the Appellate Tribunal reads as under:- "Clause 3 seeks to amend section 10A of the Income Tax Act. Under the existing provisions, tax holiday is available to newly established industrial undertaking set up in free trade zones and to units set up in software technology parks for five years out of the block of initial eight years, subject to fulfilment of certain conditions. The proposed amendment seeks to extend the period of tax holiday from five years to ten years in order to give added thrust to export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the benefit under the unamended provision and the 10 consecutive years would fall prior to 01.04.1999, then the assessee would not be entitled to the said benefit. If the said 10 consecutive years from the date of production has not expired, prior to 01.04.1999, for the remaining unexpired period, he would be entitled to the benefit. On the ground that he had the benefit of unamended provision and the 5 years-period has expired on the day amended provision came into force, he cannot be denied the benefit. If that is done, it would run counter to the intention with which the amended provision was brought on the statute book. It would negate the amended provision. 9. In the instant case, the assessee has commenced production in the year 1993 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relief to the assessee, we fail to understand how the department has taken a decision to prefer an appeal in this case, where there is absolutely no error in the order passed by the Appellate Authorities. It only shows the lack of application of mind and it is our experience that it is not an isolated case. It seems that the department is filing these appeals mechanically either for the purpose of statistics or to save their skins without application of mind. In the process, a person who is eligible to a tax holiday has not only been denied the benefit, but made him to contest the proceedings in three forums. If the object of extending these benefits is to give added thrust to exports, the assessee is made to unnecessarily waste his time in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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