JUDGMENT : 1. Affidavit of service is filed showing service of notice in pursuance of notice of a coordinate Bench issued on 5th January, 2017. Let affidavit be kept with the records. 2. The present appeal is against an order of the Income-tax Appellate Tribunal Bench SMC Kolkata, which in substance allow the assessee’s claim for deduction under Section 80IB of the Income-tax Act, 1961. The assessee goes unrepresented before us. We find from the records that the assessee went unrepresented before the Tribunal also. It is also revealed from records that the assessee operates a small manufacturing unit at Yanam in Pondicherry and this unit has been registered as a Small Scale Tiny Unit. The assessee has been claiming deduction in terms of Section 80IB of the Income-tax Act since its inception in the financial year 2001-02. In this appeal, however, we are concerned with the assessment year 2004-05 corresponding to the financial year 2003-04. There was scrutiny assessment in that assessment year and certain expenses were added. So far as the subject of dispute in this appeal is concerned however, that did not form the basis of scrutiny assessment. 3. Deduction was claimed by the assessee, as we have already observed, under Section 80IB of the 1961 Act. So far as this appeal is concerned, question arises as regards non-fulfillment of condition contained in clause (iv) of Subsection (2) of Section 80IB, which would disentitle an industrial undertaking from claiming deduction under Section 80IB(1) of the Act. The said clause reads: “[iv] In a case where the industrial undertaking manufactures or produces articles or things, the undertaking employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power.” 4. An order was passed by the Assessing Officer on 12th March, 2009 under Section 154 of the 1961 Act and it is asserted on behalf of the Revenue that this order was passed because of audit objection. This order, inter alia, records : “Original assessment was made U/s. 143(3) on 29.12.2006 at a total income of Rs.2,57,600/-. The assessee had an industrial undertaking under the name & style “Modern Industries”. He availed the deduction of Sec. 80IB in computation of total income of industrial undertaking. This order, inter alia, records : “Original assessment was made U/s. 143(3) on 29.12.2006 at a total income of Rs.2,57,600/-. The assessee had an industrial undertaking under the name & style “Modern Industries”. He availed the deduction of Sec. 80IB in computation of total income of industrial undertaking. The revenue audit raised an objection that the deduction 80IB taken by the assessee is not justified as the number of workers in the undertaking is only 3(three) in place of 10. Notice U/s.154 was issued to the assessee and pointed out the mistake deleted by the Revenue Audit. Sri K.S.Nahata, A/R of the assessee had submitted a gist of Sec. 80IB claiming that the claim of sec.80IB in bonafied. 5. I have gone through the explanation offered by the assessee and also Sec. 80IB and it is observed that the assessee is not justified in claiming Sec.80IB because of the fact that Sec. 80IB has clearly indicates that “In the case where the Industries undertaking manufacturers or produce articles or things that undertaking employees must be 10 or more. In the case of the assessee it is observed from the details of salary and wages of Modern Industries that there was only 3 workers in the said undertaking. Hence the claim of deduction U/s. 80IB is disallowed and total income is computed as below:- Total income after giving appeal effect Rs.2,37,220/- Add: Claim of deduction U/s. 80IB Rs.7,26,400/- Total Income Rs.9,63,620/- Calculation of Tax Total Income Rs.9,63,620/- Income Tax thereon Rs.2,63,080/- Less: Rebate U/s.88 Rs. 15,000/- Rs.2,48,080/- Rs. 4,225/- Less : TDS Rs.2,43,855/- Rs.1,48,718/- Add: Interest U/s.234B Payable Rs.3,92,573/- Assessed U/s 154 as above Issued DN & copy of the order to the assessee” quoted verbatim). The assessee’s appeal against this order was sustained by the Commissioner. The assessee however was successful in his appeal before the Tribunal, which, inter alia, held : “5. I have heard the ld. DR and perused the materials available on record. Ground No.1 is general in nature and hence the same does not require any adjudication. Ground No.2 to 6 are identical in nature and hence are taken together for the purpose of adjudication herein. 6. The assessee being a small scale unit as registered by the Govt. of Pondicherry Industries Department had set up a manufacturing unit in the backward region and accordingly is entitled for deduction u/s 80IB of the Act. Ground No.2 to 6 are identical in nature and hence are taken together for the purpose of adjudication herein. 6. The assessee being a small scale unit as registered by the Govt. of Pondicherry Industries Department had set up a manufacturing unit in the backward region and accordingly is entitled for deduction u/s 80IB of the Act. It is undisputed that the said unit started commencement of production in A.Y.2001-02 being the initial assessment year and deduction u/s 80IB of the Act was granted to the assessee by the ld. AO for A. Yrs. 2001-02, 2002-03 and 2003-04 during the scrutiny assessment proceedings. Admittedly, deduction u/s 80IB of the Act would not have been granted by the AO in the initial assessment year without verification of compliance of all the conditions contemplated in the relevant section. The ld. CIT(A) in his order has stated that during the A.Y.2004-05 the assessee had employed only three people which is also evident from the details of salary and wages provided by the assessee before AO and ld. CIT(A). The ld. CIT(A) further observed that no expenditure was incurred by the assessee towards payment of wages to temporary workers, labourers, if any, which satisfy the requirement of 10 or more workers in terms of section 80IB of the Act. Now the short issue that arises for our consideration is whether the ld. AO. having granted deduction u/s 80IB of the Act in the initial assessment year is entitled to withdraw the same in the subsequent years and more so whether it can be done by him in the proceedings u/s 154 of the Act. The fact of withdrawal of deduction u/s 80IB of the Act in the subsequent years when the same were duly granted by the ld. AO in the initial assessment years per se becomes a debatable issue and hence I hold that the same cannot be done in the proceedings u/s. 154 of the Act as the same cannot be construed as a patent, glaring, obvious mistake apparent from record. I also hold that the requirement of compliance of provision of section 80IB of the Act should be verified in detail by the ld.AO only in the initial assessment year i.e. A.Y.2001-02 and he need not stretch or travel beyond that year for the purpose of grant of deduction in subsequent years. I also hold that the requirement of compliance of provision of section 80IB of the Act should be verified in detail by the ld.AO only in the initial assessment year i.e. A.Y.2001-02 and he need not stretch or travel beyond that year for the purpose of grant of deduction in subsequent years. Deduction u/s 80IB of the Act is granted to the assessee for promoting the growth of manufacturing units in the backward region by the Govt. of India. It being a beneficial provision, the same has to be viewed liberally. Even otherwise, whether the same had to be viewed literally or liberally per se is a debatable issue which cannot be the subject matter of rectification u/s 154 of the Act. In fact the issue of granting of deduction u/s. 80IB of the Act had reached the corridors of various courts including the Hon’ble Supreme Court on various grounds and admittedly, the ground of deduction therein does not become automatic unless the conditions stipulated in the section have fully complied with by them in letter and spirit by the assessee. 7. Various disputes have cropped up in the light of this issue and each issue had its own distinct facts and circumstances and had to be adjudicated by various courts including Supreme Court. This itself makes the issue of grant of deduction u/s 80IB of the Act highly debatable. Hence, the same cannot be the subject matter of 154 proceedings. Reliance in this regard is placed on the decision of the Hon’ble Apex Court in the case of T.S.Balaram & Co. vs. Valkart Bros., (1971) 82 ITR 50 (SC). When two views are possible, obviously it becomes a debatable issue. It cannot be the subject matter of rectification proceedings u/s 154 of the Act. In view of the aforesaid facts and circumstances of the case and in view of the judicial precedents, I hold that the action of the ld. AO in denying the deduction u/s 80IB of the Act u/s 154 proceedings is bad in law. The grounds raised by the assessee are allowed.” 8. So far as tax impact of this appeal is concerned, it was conceded by the learned Counsel for the revenue that the impact was below the threshold. Mr. Bhattacharya, learned Counsel for the revenue however cited audit objection as the justification for maintaining the appeal. 9. The grounds raised by the assessee are allowed.” 8. So far as tax impact of this appeal is concerned, it was conceded by the learned Counsel for the revenue that the impact was below the threshold. Mr. Bhattacharya, learned Counsel for the revenue however cited audit objection as the justification for maintaining the appeal. 9. We have gone through the orders of the assessing officer as well as the Commissioner in the scrutiny assessment. We do not find any material from which it could be ascertained that it was a mistake apparent on the face of the record. The Tribunal had rightly held that the question as to whether the assessee failed to satisfy the condition stipulated in Section 80IB sub-section (2) sub-clause (iv) was an issue which could be the subject of investigation but scrutiny assessment could not be further scrutinized invoking the jurisdiction for rectification under Section 154 of the Act to arrive at such a finding. We accept the revenue’s contention that principles of res judicata does not apply in a tax proceeding but that is not the point on which we are rejecting the appeal. We do not think any substantial question of law is involved in this appeal. We concur with the Tribunal that Section 154 of the Act could not be invoked by the Assessing Officer in the facts of this case. 10. The appeal is accordingly dismissed along with the stay petition. No order as to costs.