Prakash Krishna, J. - (1.) The judgment of the court was delivered by Prakash Krishna J.-At the instance of the Revenue, the following question of law has been referred by the Income-tax Appellate Tribunal, Delhi, for the opinion of this court : "Whether, on the facts and in the circumstances of the case, the assessee was entitled to relief under Sections 80J and 80HH for the assessment years 1976-77 and 1977-78 ?"
(2.) The assessee is a registered firm manufacturing rice and dealing in food grains. Its claim for relief under Sections 80] and 80HH of the Income-tax Act, 1961 (hereinafter referred to as "the Act") in respect of its rice manufacturing business was disallowed by the Income-tax Officer on the ground that the assessee did not employ ten or more workers in the manufacturing process and, therefore, it did not satisfy the conditions of Section 80J(4)(iv) and Section 80HH(2)(iv) of the Act. But the claim of the assessee was accepted by the Commissioner of Income-tax (Appeals) for the assessment year 1976-77 as well as by the Income-tax Appellate Tribunal.
(3.) The controversy in the present case centres round the question of the number of workers employed in the manufacturing process carried on by the industrial undertaking. Section 80J(4) of the Act reads as under : "(4) This section applies to any industrial undertaking which fulfils all the following conditions, namely : (i) it is not formed by the splitting up, or the reconstruction, of a business already in existence ; (ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose ; (iii) it manufactures or produces articles, or operates one or more cold storage plant or plants, in any part of India, and has begun or begins to manufacture or produce articles or to operate such plant or plants, at any time within the period of thirty-three years next following the 1st day of April, 1948, or such further period as the Central Government may, by notification in the Official Gazette, specify with reference to any particular industrial undertaking ; (iv) in a case where the industrial undertaking manufactures or produces articles, the undertaking employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power.";