About reckoning the " INFANCY PERIOD " for the purpose of the newly set-up establishment's liability to pay bonus under the Payment of Bonus Act,1965, I feel that had the Questioner made some in-depth study of Section 16 of the Act which elaborately lays down the special provisions with reference to certain establishments in respect of payment of bonus, it would have been better to present his queries on the subject more specifically.
Anyhow, let me answer in a broad manner so that it may give rise to specific questions after his browsal of the relevant section with reference to my brief answer.
The infancy period does not cover simply the 5 consecutive years from the year of the inception of the establishment. On the contrary, it only originates from the year in which the goods produced or manufactured in the establishment are sold or services are rendered by the establishment as the case may be and profits are derived.
The application of the principles of set on and set-off u/s 15 of the Act and as illustrated in Schedule Four would commence only from the 6th year onwards.