JUDGMENT
1. At the instance of the Revenue, the Income-tax Appellate Tribunal, Allahabad Bench, has referred the following question of law for the opinion of this court under Section 256(1) of the Income-tax Act, 1961 (for short "the Act") :
"Whether, on the facts and in the circumstances of the case, the deduction as contemplated under Section 80J of the Income-tax Act, 1961, was rightly allowed to the assessee ?"
2. In the previous year relevant to the assessment year 1977-78 which is in dispute, the assessee claimed a relief of Rs. 34,820 under Section 80J of the Act by filing a revised return. In the initial return which was filed for that year, no such claim was made. The assessee-firm had started its business in the previous year relevant to the assessment year 1974-75, but failed to claim deduction under Section 80J. Even during the two subsequent assessment years, i.e., 1975-76 and 1976-77, no such claim was made. The Income-tax Officer was of the view that the assessee's claim ought to have been allowed in the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles. Since the assessee had failed to make such a claim, the Income-tax Officer did not entertain the claim under Section 80J. Feeling aggrieved, the assessee took the matter in appeal, before the Appellate Assistant Commissioner of Income-tax. The appellate authority relying upon a Division Bench decision of this court in Addl CIT v. Sheetalaya [1979] 117 ITR 658 (All), held that the claim of the assessee under Section 80J should have been entertained and, therefore, he directed the Income-tax Officer to compute the relief admissible to the assessee under Section 80J and to allow the necessary deduction. On second appeal at the instance of the Revenue, the order passed by the appellate authority was upheld. It is on these facts that the aforesaid question has been referred to this court for its opinion.
3. Sub-sections (1) and (2) of Section 80J, which are relevant for the decision of the controversy, at the relevant time, provided as under :
"80J. (1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel, to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains (reduced by the deduction, if any, admissible to the assessee under Section 80HH) of so much of the amount thereof as does not exceed the amount calculated at the rate of six per cent, per annum on the capital employed in the industrial undertaking or ship or business of the hotel, as the case may be, computed in the prescribed manner in respect of the previous year relevant to the assessment year (the amount calculated as aforesaid being hereafter, in this section, referred to as the relevant amount of capital employed during the previous year ) :
Provided .....
(2) The deduction specified in Sub-section (1) shall be allowed in computing the total income in respect of the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or to operate its cold storage plant or plants or the ship is first brought into use or the business of the hotel starts functioning (such assessment year being hereafter, in this section, referred to as the initial assessment year) and each of the four assessment years immediately succeeding the initial assessment year :
Provided ......"
4. It would be noticed that Sub-section (1) of Section 80J, inter alia, provides for a deduction at the rate of six per cent, per annum of the capital employed from the profits of a new industrial undertaking which fulfils the prescribed conditions. What is an industrial undertaking for the purpose of Section 80J, it is not necessary to discuss it, because there is no dispute between the parties that the assessee was an industrial undertaking in the year in dispute within the meaning of that expression as contemplated in Section 80J of the Act. Sub-section (2) of Section 80J provides the period for which the benefit of exemption under Sub-section (1) of Section 80J can be availed of. The starting point of such period would be the year in which the manufacture or production of articles begins. This has been described as "the initial assessment year" under Sub-section (2) of Section 80J. The exemption then continues to be available for a total period of five consecutive years including the initial assessment year,
5. The question for consideration is, if the assessee had failed to make a claim in any one of the earlier assessment years comprised in the five-year period, whether the assessee can legally be denied the benefit of Section 80J for the remaining period of five-year term.
6. It cannot be disputed that Section 80J provides for an incentive in the form of a "tax holiday" to a newly established industrial undertaking by granting certain partial benefit, so far as the profits of a new industrial undertaking are concerned for a limited period. The deduction contemplated is "per annum" for full five years. The assessee is entitled to get the relief for each of the five years, during which the relief under this section is available. The profits and gains derived from business are assessable in each assessment year. The assessee can legitimately make a claim for relief under Section 80J within the period of exemption of five years by showing that it fulfils all the requirements for the grant of relief contemplated under Section 80J of the Act. There is nothing in the statutory provisions under consideration which imposes a limitation that the relief must necessarily be claimed for all the five assessment years.
7. Learned standing counsel could not bring to our notice any statutory compulsion or a provision which may go to show that if the claim under Section 80J is not made in any one or more of the assessment years comprising the period of five years, then the relief will not be admissible during the balance of the exemption period notwithstanding that all other conditions of Section 80J stand satisfied. It has to be borne in mind that the provisions under consideration are relating to exemption and are, therefore, to be construed liberally. It is the settled rule of interpretation of statutes that expressions used therein should ordinarily be understood in a sense in which they best harmonise with the object of the statute and which effectuates the object of the legislation. The expression "and each of the four assessment years immediately succeeding the initial assessment year" occurring in Sub-section (2) of Section 80J is to be construed in its plain and ordinary sense. When so construed, there is no room for ambiguity on a plain reading of those words. The failure to make a claim for relief under Section 80J in the initial assessment year or in any of the succeeding assessment years in no way creates a hurdle for making a legitimate claim for the remaining period of exemption talked of in Sub-section (2) of Section 80J. The object of Section 80J is to provide a fillip to a new industrial undertaking in its initial stages, the exemption is thus limited only for a number of years. This benefit cannot be taken away by importing any restrictions which do not find mention in the relevant provision itself. It is a recognised principle of interpretation that the administrative authority or the court should not whittle down the plenitude of the exemption or relief granted by the legislation by laying stress on any ambiguity here or there, although in the instant case no ambiguity was brought to our notice. It is not the case of the Revenue that in the assessment year in dispute the assessee did not fulfil all the conditions of Section 80J. At the cost of repetition it may be observed that according to the scheme of Section 80J, the benefit contemplated under Section 80J is permissible independently for each year of exemption, whether or not the exemption was availed of in the preceding or the succeeding assessment year falling within the period of exemption.
8. In view of the above discussion, we find no infirmity in the order of the Income-tax Appellate Tribunal, when it directed that the claim of the asses-see under Section 80J may be entertained and the admissible relief should be allowed.
9. For what has been stated above, the question referred to this court is answered in the affirmative, in favour of the assessee and against the Revenue.