M/s Excel Softech Ltd., H. No. 1257, Sector 37B, Chandigarh ..... RESPONDENT CORAM : HON'BLE MR. JUSTICE SATISH KUMAR MITTAL HON'BLE MR. JUSTICE AUGUSTINE GEORGE MASIH Present: Ms. Urvashi Dhugga, Advocate, for the appellantrevenue. Mr. S.K. Mukhi, Advocate, for the respondentassessee. *** SATISH KUMAR MITTAL , J. The Revenue has filed this appeal under Section 260 A of the Income Tax Act, 1961 against the order dated 25.7.2006 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'B', Chandigarh (hereinafter referred to as `the Tribunal') in ITA No. 319/Chandi/2005 for the Assessment Year 20012002, raising the following substantial question of law : "Whether on the facts and in the circumstances of the case, the ITAT is right in law in affirming the order of the CIT (A) in directing the Assessing Officer to allow deduction under ITA No. 156 of 2007 2 section 10B of the Income Tax Act, 1961 in spite of the fact that the assessee company has not fulfilled the conditions laid down under section 10B of the Income Tax Act, 1961 as it was not a newly established undertaking?" The brief facts of the case are that the assessee, who is 100% export oriented undertaking, is engaged in the business of export of computer software. It started production during the year relevant to assessment year 199899. In the year under consideration i.e. 20012002, the assessee claimed exemption under Section 10B of the Act. The Assessing Officer asked the assessee to justify its claim of exemption under Section 10B of the Act, as it was not a new unit. The assessee claimed that it is a 100% export oriented undertaking and started production in the assessment year 199899 and was registered with the Software Technology Park on 23.3.2000. Since the assessee fulfills all the requirements and conditions for claiming exemption under Section 10B of the Act in relation to its profit derived from export of Computer Software, therefore, it claimed the said exemption. It was further submitted that under Section 10B of the Act, the exemption is available to an assessee for a period of 10 years. The assessee submitted that merely because in the assessment year 199899, upto 200001, it claimed deduction under Section 80HHE of the Act, it is not debarred from claiming exemption under Section 10B of the Act, in the assessment year under consideration, if it fulfills all the conditions mentioned in the said provision. The Assessing Officer did not allow the plea of the assessee for exemption under Section 10B of the Act on the ITA No. 156 of 2007 3 ground that export undertaking of the assessee was not newly established in the year under consideration and the exemption under Section 10B of the Act is available to the undertakings, which are newly established. Feeling aggrieved against the said order, the assessee filed appeal before the Commission of Income Tax (Appeals), who vide his order dated 7.1.2005 allowed the claim of the assessee, while observing that the assessee satisfies all the conditions necessary for claiming exemption under Section 10B of the Act. It was held that the claim under Section 10B of the Act is available for a period of 10 years starting with the assessment year in which the unit starts to manufacture. Therefore, the assessee was entitled for the said benefit upto the year 200708. It was further held that it was optional for the assessee to either claim the exemption under Section 10B or deduction under Section 80HHE of the Act in relation to its export profits. Since in the year under consideration, the assessee has not claimed deduction under Section 80HHE of the Act, therefore, it was entitled to claim exemption under Section 10B of the Act, as it fulfilled all the conditions. Feeling aggrieved against the said order, the revenue filed appeal before the Tribunal, which was dismissed vide the impugned order. Against the aforesaid order of the Tribunal, the revenue has filed the instant appeal.