T.S. Sivagnanam, J. - (1.) This appeal by the Revenue, filed under section 260A of the Income Tax Act, 1961 (the 'Act' for brevity) is directed against the order passed by the Income Tax Appellate Tribunal, Chennai 'C' Bench (the 'Tribunal' for brevity), dated 16.05.2008 in ITA No.2255/Mds/2006 for the assessment year 2002-03.
(2.) This appeal was admitted on 25.11.2008 on the following Substantial Questions of Law: " 1.Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in setting aside the order of the Commissioner of Income Tax under Section 263, holding that there was no violation of the conditions stipulated under Section 10A(2)(ii) and (iii) in the matter of the assessee's undertaking claiming exemption for the first time under Section 10A for the assessment year 2000-2001? 2. Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in setting aside the order of the Commissioner of Income Tax without observing that the assessment order and the appellate order of the Commissioner of Income Tax (Appeals) dealt with only the restriction in the quantum of deduction under Section 10A allowable and not with the eligibility of the assessee for deduction under Section 10A as such in the light of the conditions under Section 10(A)(2)(ii) and (iii) or the Income Tax Act?"
(3.) There are two issues arise for consideration. Firstly, whether the Commissioner of Income Tax (Appeals) ('CITA' for brevity) could have invoked his power under Section 263 of the Act, when he had passed an order, on 25.10.2005, granting relief to the assessee. The second issue is whether there was any violation of conditions stipulated under Section 10A(2)(ii) and (iii) of the Act in the matter of assessee's undertaking claiming exemption for the first time under Section 10A for the assessment year 200001.;