In Brief
The Supreme Court held that an assessee cannot claim tax deduction under Section 80-IB(3) of the Income Tax Act if it loses its eligibility as a small-scale industrial undertaking during the ten-year benefit period, even if it was initially qualified. Although tax incentive provisions should be liberally construed to advance legislative goals, they cannot ignore mandatory eligibility conditions. The Court found that the incentive is tied to the assessee's continued status as a small-scale undertaking in each assessment year, and loss of that status disqualifies it from the benefit. Each assessment year is treated as a separate unit, requiring fresh compliance with continuing conditions. The appeals were dismissed accordingly."
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