2005 (5) TMI 60 - HC - Income Tax

Applications filed by the petitioner under section 80HHC(2)(a) for extension of time export realization - we are prima facie satisfied that the petitioner has offered seeking extension of time for non-payment of nine consignments when in similar and identical situation extension has been allowed to another manufacturer. We consider it discriminatory if others have been allowed the opportunity why the case of the petitioner has not been considered - impugned order not allowing extension o time is set aside

Summary

Issues:
1. Extension of time for realisation of export consignments under section 80HHC(2)(a) of the Income-tax Act, 1961.
2. Allegation of arbitrary refusal of extension compared to another firm.

Extension of Time for Realisation of Export Consignments:
The petitioner, engaged in manufacturing and exporting ready-made garments, had nine export consignments pending realisation beyond the prescribed period of September 30, 1994, for the financial year 1993-94. The petitioner made four applications under section 80HHC(2)(a) of the Income-tax Act seeking extensions of time for realisation. The petitioner's applications for extension were based on efforts made towards realisation, with the final amount certified by the bank in December 1995. The authority allowed the first two applications but rejected the subsequent two, citing insufficient evidence of efforts made. The High Court observed discrepancies in the acceptance of applications and ordered the concerned authority to review the rejected applications in light of the petitioner's efforts, setting aside the initial order partially.

Allegation of Arbitrary Refusal of Extension:
The petitioner alleged arbitrary refusal of extension compared to another firm, M/s. Four Continental Exports, Moradabad, which was granted an 18-month extension in a similar situation. The petitioner argued that the differential treatment was discriminatory, highlighting the inconsistency in granting extensions. The High Court acknowledged the disparity in treatment and found merit in the petitioner's claim of discriminatory practices. Consequently, the Court set aside the order disallowing the petitioner's applications and directed the authority to reconsider the matter fairly, emphasizing the need for consistent application of extension provisions under the law.

In conclusion, the High Court partially allowed the writ petition, directing a review of the rejected extension applications and emphasizing the importance of non-discriminatory decision-making in granting extensions for realisation of export consignments under section 80HHC(2)(a) of the Income-tax Act, 1961.