K.D. Ranjan, Accountant Member. - This appeal filed by the revenue for assessment year 2001-02 arises out of order of CIT(A) - XXVI, New Delhi.

2. In this case the appeal was fixed for the first time on 18-12-2006. None was present on behalf of the assessee. The case was again fixed for hearing on 9-2-2007. On this date the hearing was adjourned to 5-7-2007 at the request of the counsel of the assessee. On this date none attended on behalf of the assessee and, therefore, notice for hearing was issued fixing the case for hearing on 6-9-2007. The assessee again sought adjournment and the case was adjourned to 25-10-2007. On this date none attended on behalf of the assessee nor was any application for adjournment received. From the conduct of assessee it is clear that the assessee is seeking adjournment to avoid the prosecution of the appeal to take place. Therefore, the appeal is decided on merits after hearing the ld. DR.

3. The first issue for consideration relates to allowing exemption under section 10B. The facts of the case as stated in brief are that the assessee derives income from 100 per cent Export Oriented Unit (EOU). During the year under consideration, the assessee claimed exemption under section 10B. The Assessing Officer found that assessee failed to furnish the certificate in Form 56G as per the provisions of section 10B(5) of the Act. The assessee did not file any evidence in form of copy of certificate issued by Chief Controller of Import and Exports, Government of India as required by clause (iv) of Explanation 2 to section 10B of the Act. Accordingly, the Assessing Officer disallowed the claim of assessee under section 10B. However, the Assessing Officer allowed deduction under section 80HHC in respect of profits and gains derived from export of goods out of India.

4. The matter was carried out in appeal before the ld. CIT(A). It was pleaded before him that the claim of assessee under section 10B was accepted by the Department over past years and deduction under section 10B was allowed. It was stated that the assessee had duly filed Form No. 56G with the Income-tax Department and the assessee had fulfilled all other mandatory requirements as per section 10B of the Act. Ld. CIT(A) after going through the assessment order for assessment year 1994-95 observed that the assessee had filed all the required details and, therefore, the Assessing Officer wrongly disallowed the exemption under section 10B of the Act to the assessee. The Assessing Officer made enquiries and allowed exemption under section 10B in assessment year 1994-95. On the basis of the assessment made in assessment year 1994-95 the ld. CIT(A) allowed the claim of assessee for assessment year 2001-02 under section 10B of the Act.

5. Before us ld. Sr. DR submitted that assessee had not fulfilled the conditions for allowing of the claim under section 10B of the Act. The assessee had not filed any evidence in form of certificate issued by Chief Controller of Import and Exports. Therefore, the Assessing Officer had rightly disallowed the claim of the assessee. However, ld. CIT(A) without examining the case on merits has allowed the case relying on the exemption allowed in assessment year 1994-95. It has further been submitted that ld. CIT(A) had completely ignored the findings of Assessing Officer that certificate from Chief Controller of Import and Exports, a condition necessary for allowability of the claim had not been fulfilled by the assessee and had allowed the claim of assessee on the basis of past history of the case.

6. We have heard the ld. DR and perused the material available on record. Section 10B was inserted by the Finance Act, 1988 with effect from 1-4-1989. In case of a 100 per cent EOU any profits and gains derived by an assessee shall not form part of total income if the assessee fulfils the conditions specified in sub-section (2). Under section 10B(3) the complete tax holiday extends at the option of the assessee in respect of any 5 c