Initial assessment year governs Section 80-IA eligibility for small-scale undertaking deduction, with later-year revalidation not required.

For deduction under Section 80-IA of the Income-tax Act, the small-scale undertaking eligibility condition is tested with reference to the initial assessment year, not by reapplying the condition in every successive year. The Court followed its earlier binding common judgment on the same issue and held that once the condition is satisfied in the initial year, the deduction is not denied merely because the condition is not separately examined in later years. The Revenue's challenge was therefore rejected, and the issue was decided in favour of the assessee.

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Issues: Whether the assessee was required to satisfy the small-scale undertaking eligibility condition for deduction under Section 80-IA of the Income-tax Act, 1961 on every successive assessment year, or only with reference to the initial assessment year.

Analysis: The Court treated the question as covered by its earlier common judgment on identical issues. It accepted that the initial assessment year remains the relevant year for testing the eligibility condition, and that once the condition is satisfied in that year, the deduction is not lost merely because the condition is not re-examined or separately satisfied in each of the remaining years. The Revenue's challenge was therefore held to be governed by the earlier binding decision on the same point.

Conclusion: The question was answered against the Revenue and in favour of the assessee.

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