HARSHA DEVANI,J. - (1.)THE appellant - assessee has challenged the order dated 15th December, 1999 passed by the Income Tax Appellate Tribunal, Rajkot Bench (hereinafter referred to as 'the Tribunal') in ITA No.1382/Ahd/93.
(2.)HAVING regard to the controversy involved in the present case, it would be necessary to refer to the facts in some detail including the facts relating to the previous assessment years. The assessment year is 1990-91 and the relevant accounting period is the year ended on 31st March, 1990. The assessee, a partnership firm, is engaged in the manufacture of corrugated boxes having its factory in the Kandla Free Trade Zone. The assessee firm was formed on 21st October, 1981 and commenced manufacturing activities on 20th July, 1982. Its first previous year was the year that ended on 31st December, 1981. The assessee filed its return of income for assessment year 1982-83 declaring nil income. Since the assessee had not commenced manufacture or production of articles or things, the provisions of section 10A of the Act were not applicable to it in the said assessment year. By an application dated 1st February, 1983, the assessee applied for permission to change the previous year and to complete the books of accounts on 30th June, 1983 relevant to the assessment year 1984-85. Thereafter, the assessee filed its return of income for assessment year 1984-85 on 30th June, 1984 declaring loss of Rs.1,69,890.00. On 24th November, 1986, during the course of the assessment proceedings, the assessee gave a declaration in writing to the effect that the provisions of section 10A of the Act may not be made applicable for the previous year ending on 30th June, 1983, that is, for assessment year 1984-85 and also for assessment year 1985-86 ending on 30th June, 1984 and that the same may be made applicable for assessment years 1986-87 to 1990-91. The Assessing Officer observed that a declaration under section 10A(7) of the Act has to be filed before the expiry of the time allowed under sub-section (2) of section 139 of the Act and that the assessee had not filed such declaration alongwith the return of income but had filed the same on 24th November, 1986, after a period of more than two years. The Assessing Officer held that section 10A of the Act was applicable to the initial assessment year that is, 1984-85, viz., the year under consideration and four subsequent years and framed assessment under section 143(3) read with section 10A of the Act. The assessee carried the matter in appeal before the Commissioner (Appeals) contending that the return showing loss was filed by the assessee and that the assessee did not derive any profit or gain during the previous year relating to assessment year 1984-85 and as such, the Assessing Officer was not justified in treating the return of the assessee as one under section 10A of the Act. The Commissioner (Appeals) held that the Assessing Officer was not justified in applying the provisions of section 10A to the case of the assessee for assessment year 1984-85. Revenue preferred appeal before the Tribunal which held that the assessee had filed a declaration in writing on 26th November, 1986 before the assessment was completed which was to be taken as if the assessee had utilised the option provided under section 10A(7) of the Act and as such, the Assessing Officer was not justified in framing assessment order under section 10A of the Act. It was, however, observed that the observations made by the Commissioner (Appeals) that the assessee shall be entitled to the benefit of section 10A for five years from assessment year 1986-87 to 1990-91 was uncalled for as the claim of the assessee for those years was not a matter in issue before him.
For the assessment year 1985-86, the assessee filed its return of income on 9th September, 1985 declaring the total income at nil. In the statement of income filed with the original return, the assessee had shown the total income at Rs.1,05,564.00 and the entire income was claimed as exempt under section 10A of the Act. Subsequently, pursuant to a notice dated 28th January, 1991 issued under section 148 of the Act, the assessee filed return of income on 28th February, 1991 in which it withdrew its claim for exemption under section 10A of the Act and declared total income of Rs.1,05,564.00/. The Assessing Officer, however, made assessment on protective basis as the assessee had offered the entire income to tax.

(3.)IN respect of assessment years 1987-88 and 1988-89, the income was assessed at nil. In respect of assessment year 1989-90, the Assessing Officer held that since the initial year for availing of exemption under section 10A of the Act was 1984-85, the period of five years came to an end in assessment year 1988-89 and hence, the assessee was not entitled to exemption under section 10A of the Act beyond assessment year 1988-89. The assessee carried the matter in appeal before the Commissioner (Appeals) who followed his earlier order and allowed the ground of appeal. Revenue went in appeal to the Tribunal. Before the Tribunal, the representatives of both the parties submitted that the controversy involved stands covered in favour of the assessee by the order passed by the Tribunal in ITA No.3005/Ahd/1990 dated 11th November, 1994 in the assessee's own case. The Tribunal, accordingly, without discussing the merits of the case rejected the said ground of appeal by following its earlier order.