Rule of consistency supports section 10B deduction where STPI approval was accepted in the earlier year.

Deduction under section 10B was allowed where the assessee's unit was treated as a hundred per cent export oriented undertaking on the strength of Software Technology Park of India approval, supported by the CBDT instruction and administrative clarification relied upon by the assessee. The Tribunal also applied the rule of consistency because the same deduction had been accepted in scrutiny assessment for the immediately preceding year, with no change in facts or law and no showing of reopening or revision of that earlier order. On that basis, the Revenue was not permitted to take a different view in the year under appeal, and the deduction claim was accepted.

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Issues: Whether the assessee was entitled to deduction under section 10B on the strength of approval or registration granted by Software Technology Park of India and whether the Revenue could deny the claim in the year under appeal despite allowance in the immediately preceding assessment year.

Analysis: The deduction under section 10B turned on whether the assessee's unit could be treated as a hundred per cent export oriented undertaking approved by the competent authority. The Tribunal accepted the view that registration granted by the Software Technology Park of India was valid for the purpose of section 10B, especially in the light of the CBDT instruction and the administrative clarification relied upon by the assessee. It further noted that the same deduction had already been allowed in the earlier assessment year in scrutiny assessment, with no change in facts or law, and that the Revenue had not shown any reopening or revision of that earlier order. On these facts, the Tribunal applied the rule of consistency and declined to permit a different view in the year in question.

Conclusion: The assessee was held entitled to deduction under section 10B, and the Revenue's objection was rejected.

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