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TMI Blog2009 (5) TMI 560X X X X Extracts X X X X X X X X Extracts X X X X ..... n adopted by the AO is not sustainable. The AO's order does not reflect proper application of mind. Hence, it cannot be said that he was taking one of the possible views. - Appeal is dismissed - Order of CIT u/s 263 sustained. - - - - - Dated:- 22-5-2009 - Member(s) : U. B. S. BEDI., SHAMIM YAHYA. ORDER-SHAMIM YAHYA, A.M.: This appeal by the assessee is directed against the order of CIT under s. 263 of the IT Act, dt. 18th March, 2008 and pertains to asst. yr. 2004-05. 2. At the threshold, we note that there is a delay in filing of the appeal by 88 days. The assessee has filed petition for condonation of delay. However, the period of delay has not been mentioned in the said condonation petition. It has been stated in the condonation petition that the assessee is a permanent resident of Singapore and he has been assessed to income-tax in respect of business carried on through his representative in Chennai. It has been submitted that the learned CIT has passed order under s. 263 of the IT Act vide order dt. 18th March, 2008. It has further been claimed that though it appeared that order was served at assessee's premises in Chennai, he was not aware of service of the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee, Dr. Anita Sumanth, argued that in the preceding two years assessee has been granted deduction under s. 80HHC of the IT Act. Hence, she claimed that there was no justification of denying the relief in the current assessment year by invoking s. 263 of the IT Act. The learned counsel of the assessee further submitted that as per DTAA between India and Singapore, as per art. 26 of the said agreement. under the heading 'Non-discrimination', it has been stipulated that no discrimination on account of nationality should be done in taxation for the nationals of Contracting States. 7. The learned counsel further argued that it is settled law and also mandated by s. 90(2) of the IT Act that provisions of DTAA have precedence over other provisions of the IT Act. For this proposition, she also placed reliance upon following case laws: (i) CIT vs. P.V.A.L. Kulandagan Chettiar (Dead) Through LRs (2004) 189 CTR (SC) 193 : (2004) 267 ITR 654 (SC); (ii) Union of India vs. Azadi Bachao Andolan (2003) 184 CTR (SC) 450 : (2003) 263 ITR 706 (SC); (iii) CIT vs. P.V.A.L. Kulandagan Chettiar (2008) 300 ITR 5 (SC). Hence, she claimed that learned CIT was not at all correct in invoking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing on the applicant and he cannot raise an issue in this regard. 11. The learned counsel of the assessee. Dr. Anita Sumanth, in rejoinder, argued that the provisions of cl. (4) of art. 26 of the DTAA are not applicable in this case. She argued that the word "personal" is a prefix to all the allowances and reliefs mentioned in cl. (4)(a) by application of the principle of "ejusdem generis". Deduction under s. 80HHC cannot be equated with a personal deduction. She argued that deduction under s. 80HHC is granted to exporter, as a class and is not personal in nature. 12. We have heard both the counsels and perused the relevant records. We can gainfully refer to provisions of s. 80HHC(1) of the IT Act as under: "(1) Where an assessee, being an Indian company or a person (other than a company) resident in India, is engaged in the business of export out of India of any goods or merchandise to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction to the extent of profits, referred to in sub-s. (1B), derived by the assessee from the export of such goods or merch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax laws of the respective Contracting State regarding the imposition of tax on non-resident persons as such; (c) obliging a Contracting State to grant to nationals of the other Contracting State those personal allowances, reliefs, reductions and deductions for tax purposes which it grants to its own citizens who are not resident in that State or to such other persons as may be specified in the taxation laws of that State; and (d) affecting any provisions of the tax laws of the respective Contracting States regarding any tax concessions granted to persons fulfilling specified conditions." 14. We have carefully considered the submissions. First, we refer to the learned counsel of the assessee's contention that assessee has been granted such deduction under s. 80HHC of the Act in the preceding two years. It is clear that in the asst. yr. 2002-03, the assessment was only an intimation under s. 143(1). Hence, the same cannot be said to be a regular assessment procedure. For the asst. yr. 2003-04, assessee has not been granted any deduction under s. 80HHC. Hence, the plea that in earlier year the assessee has been granted deduction under s. 80HHC and so the same has to be allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that mention of personal allowance in cl. (4)(a) cannot be interpolated to mean that deduction mentioned therein should mean personal deduction. Hence, this plea of the learned counsel of the assessee is liable to be dismissed. 18. Now, we refer to the impugned assessment order. Regarding the deduction under s. 80HHC, the said assessment order contains the following: "The assessee claimed deduction under s. 80HHC at Rs. 27,94,981 in the return filed. During the course of hearing the assessee filed a revised working of s. 80HHC vide letter dt. 27th Dec., 2006 stating that it was wrongly calculated initially and actual deduction works out to Rs. 28,98,489 and requested it should be allowed. Hence, deduction under s. 80HHC is allowed at Rs. 28,98,489 as per revised working." 19. A reading of the above nowhere reflects that AO has applied his mind for the deduction under s. 80HHC in the context of assessee being a non-resident with reference to s. 90(2) of the IT Act along with the DTAA between India and Singapore. Hence, the contention of the learned counsel of the assessee that two views were possible on this issue and one view has been adopted by the AO is not sustainable. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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