Retrospective amendment to section 80HHA required fresh eligibility review under the amended small-scale undertaking test.

A retrospective insertion of Explanation (b) altered the statutory test for eligibility under section 80HHA by deeming a small-scale industrial undertaking to be one recognised as such under section 11B of the Industries (Development and Regulation) Act, 1951 on the relevant date. Because the Assessing Officer and appellate authorities had not examined the claim under the amended basis, the matter required fresh consideration with evidence before eligibility could be determined. The appellate orders were set aside and the assessment remitted for reconsideration under the retrospective amendment, while the reference questions were left unanswered.

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Issues: (i) Whether the claim for deduction under section 80HHA required reconsideration in the light of the retrospective insertion of Explanation (b), and whether the reference questions should be answered by the Court.

Issue (i): Whether the claim for deduction under section 80HHA required reconsideration in the light of the retrospective insertion of Explanation (b), and whether the reference questions should be answered by the Court.

Analysis: The status of a small-scale industrial undertaking had earlier been examined on the basis of the then existing criteria relating to the value of plant and machinery, including the generator set. The retrospective amendment introduced by Explanation (b) changed the statutory basis by deeming an industrial undertaking to be a small-scale industrial undertaking if it was regarded as such under section 11B of the Industries (Development and Regulation) Act, 1951 on the relevant date. Since neither the Assessing Officer nor the appellate authorities had considered the matter under the amended provision, fresh examination and evidence were necessary.

Conclusion: The matter was required to be reconsidered by the Assessing Officer under the amended Explanation (b), and the questions referred were not answered.

Final Conclusion: The appellate orders were set aside and the assessment was remitted for fresh decision under the retrospective amendment, leaving the references unanswered.

Ratio Decidendi: Where a retrospective statutory amendment alters the legal basis of eligibility, the matter must be examined afresh by the fact-finding authority before the claim is finally determined.

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