Per Pramod Kumar, A.M. - In this appeal, directed against CIT(A)’s order for the assessment year 1998-99, solitary grievance of the assessee is that the CIT(A) erred in rejecting assessee’s claim for exemption under section 10B of the Income-tax Act, 1961. This issue is set out in a narrow compass of undisputed facts and involves only a question of legal interpretation.

2. The assessee-company has a one hundred per cent export oriented unit (EOU), known as ‘Instant Tea Division’, in respect of which exemption under section 10B was claimed for this year, even though the assessee had already availed the benefit of section 10B for five consecutive years and section 10B(3), as it stood in the relevant assessment year and in fact prior to the amendment w.e.f. 1st April, 1999, provided that "the profits and gains referred to in sub section (1) shall not be included in the total income of assessee in respect of any five consecutive years". The assessee’s claim was that in view of amendment in section 10B, with effect from 1st April 1999, this benefit was available for ‘ten consecutive years’ and since the assessee had completed only five years of exemption under section 10B, the assessee was also eligible for further exemption for next five years. This claim was declined by the Assessing Officer by observing that the amendment, enhancing the number of eligible assessment years to ‘ten’ did not provide for retrospective amendment, and, accordingly, the benefit of ten years cannot be granted in the present assessment year. It was also observed that admittedly legal provision, as it stood in the relevant assessment year, provided for benefit of exemption under section 10B for five consecutive assessment years. Aggrieved, assessee carried the matter in appeal before the CIT(A) but without any success. Still aggrieved, the assessee is in second appeal before us.

3. We have heard the rival contentions, perused the orders of the authorities below and deliberated upon factual matrix of the case as well as applicable legal position.

4. The basic thrust of assessee’s submissions is that the Legislature clearly intended to ‘extend’ the benefit of exemption under section 10B from ‘five’ years to ‘ten’ years, and that, if this intent is to be put into effect, the law cannot be enforced in such a manner so as to deny the benefit to the existing units. A lot of emphasis was made on the Statement of Objects and Reasons (235 ITR St 1 at page 4) which inter alia states that "The proposed amendment seeks to extend the period of tax holiday from five years to ten years in order to give added thrust to exports. Clause 4 seeks to similarly extend the five years tax holiday period to ten years to the export oriented units under section 10B of the Act". A case is then made out for supplying the casus omissus because the intent of amendment warrants and justifies the same. Learned counsel has placed reliance on the judgment of Hon’ble Supreme Court in the case of CIT v. National Taj Traders [1980] 121 ITR 535¹ at pages 541-42 for that purpose. Learned counsel has also relied upon the judgment of Hon’ble Supreme Court in the case of M. Pentiah v. Muddalla Veeramalappa AIR 1961 SC 1107 at page 1115 which has taken note of, with approval, Lord Justice Denning’s following observations in the case of Seaford Court Estates Ltd. v. Asher [1949] 2 All ER 155 at page 164:

‘...when a defect appears, a judge cannot simply fold his hands and blame the draftsmanship. He must set out to work on the constructive task of finding the intention of Parliament...and then he must supplement the written word so as to give "force and life" to the intent of legislature...A judge should ask himself the question how, if the makers of the Act had themselves come across this ruck in the texture of it they would have straightened it out? He must do as they would have done. A judge must not alter the material of which the Act is woven, but he can and should iron out the creases’

We are