Consistency in Section 10B treatment barred selective denial of deduction for one year on the same facts.
A deduction claim under Section 10B could not be disallowed for one isolated year where the Revenue had accepted the claim in the initial year and in later years on the same facts, and no cogent explanation was given for a different treatment. The Tribunal applied that consistency-based approach, and the High Court upheld it while declining to examine the wider controversy over STP authority approval. The Revenue's challenge failed, and the assessee's entitlement to the deduction remained intact for the year in question.
Issues: Whether the assessee's claim for deduction under Section 10B could be disallowed for want of the particular approval insisted upon by the Revenue, when the claim had been accepted in the initial year and in subsequent years, and the Tribunal had followed its earlier view on the same issue.
Analysis: The appeal turned on the treatment of the Section 10B claim. The earlier dismissal of a connected tax appeal had proceeded on the footing that once the Revenue had ed the certification and allowed the deduction in the initial year and thereafter in subsequent years, it was not open to take a different stand for one isolated year without any explanation. The Tribunal had followed that approach. The remaining questions raised by the Revenue were not examined and were kept open. The Court declined to enter into the broader controversy regarding the effect of approval by the STP authority.
Conclusion: The Tribunal's view allowing the assessee's Section 10B claim was upheld, and the Revenue's challenge failed.
Final Conclusion: The appeal was dismissed, leaving the assessee's entitlement to the deduction intact on the basis of consistency in treatment across the relevant years.
Ratio Decidendi: Where the Revenue has ed a deduction claim in the initial and subsequent years of a continuing statutory period, it cannot pick out a single year for different treatment on the same facts without a cogent explanation.
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AI Drafter ✕
TaxTMI 
