Court rules in favor of appellant in appeals related to assessment years; clarifies work requirement for Section 80JJAA.

The Court ruled in favor of the appellant in appeals challenging orders related to assessment years 2013-14 to 2016-17. The Court held that for deduction under Section 80JJAA, the 300-day work requirement need not be fulfilled in the previous year. It also clarified that the term 'regular workmen' under Section 80JJAA does not necessitate employees to work 300 days in the year before the assessment year. The Court set aside ITAT orders for the assessment years, answering in favor of the assessee against the revenue, with no costs imposed.

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Issues involved:
The judgment involves appeals challenging orders related to the assessment years 2013-14, 2015-16, 2016-17, and 2014-15 passed by the Income Tax Appellate Tribunal.

Issue 1: Entitlement of deduction under Section 80JJAA of the Income Tax Act

The appellant, engaged in manufacturing apparels, claimed deduction under Section 80JJAA of the Act for employing workmen. The Assessing Officer (A.O.) denied the benefit, stating the workmen were not employed for 300 days in the previous year. The Commissioner of Income Tax (Appeals) and ITAT upheld this view. The appellant argued that a restrictive interpretation of Section 80JJAA would lead to denial of deduction for employees employed after a specific date. Citing precedent, the appellant contended that the 300-day requirement should not be limited to the previous year relevant to the assessment year. The Revenue insisted on strict compliance with the statutory provision, emphasizing the need for employees to work 300 days. The Court held that the period of 300 days need not be fulfilled in the previous year for claiming the deduction under Section 80JJAA.

Issue 2: Interpretation of 'regular workmen' under Section 80JJAA

The appellant highlighted that the term 'new' in Section 80JJAA distinguishes between existing employees and newly employed workmen. The Revenue's stance that employees must work 300 days in the year before the assessment year was deemed legally unsustainable. The Court noted that the Act was amended to reduce the employment period requirement for different industries. Referring to previous cases, it was established that the benefit under Section 80JJAA could be claimed if the employee worked for 300 days, even if the period spanned across assessment or financial years. The Court ruled in favor of the appellant, stating that the orders of the A.O. and appellate authorities were legally unsustainable.

Separate Judgment by the Judges:
The Judges allowed the appeals, setting aside the orders of the ITAT for the respective assessment years and answering the questions of law in favor of the assessee against the revenue, with no costs imposed.

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