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TMI Blog2004 (11) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 80HHC(2)(a) - - - - - Dated:- 3-11-2004 - Judge(s) : R. K. AGARWAL., P. KRISHNA. JUDGMENT The judgment of the court was delivered by P. Krishna J.- The petitioner, a partnership firm, has sought by means of the present petition, a writ, order or direction in the nature of certiorari quashing the order dated August 6, 1999, passed by the Commissioner of Income-tax, Kanpur, in so far as it relates to the non-extension of time in respect of the late payment received from Prime Leather Enterprises, USA, for Rs. 77,121 and from M/s. Horseman, USA, for Rs. 1,88,860 and a writ of mandamus commanding the Commissioner of Income-tax to pass a fresh order under section 80HHC(2)(a) of the Income-tax Act, 1961, in respect of the extension of time for payment received from the aforesaid two persons. The petitioner claims itself an exporter and is doing the export of saddlery leather and brass items to various countries outside India. It, for the assessment year 1997-98 exported the goods worth Rs. 1,07,80,835. A sum of Rs. 3,53,000 was due as outstanding from three foreign buyers as on March 31, 1997. An application for extension of time as required under section 80HHC(2)(a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceeds of the goods exported out of India that were outstanding on September 30, 1997, are as follows: ------------------------------------------------------------------------------------- s. Name of the buyer to Invoice number Amount of sale proceeds of goods No. whom the assessee and date exported out of India that were exported the goods brought in India after the expiry of the six months period referred to in section 80HHC(2)(a) (Rs.) ------------------------------------------------------------------------------------- 1. M/s. Prime Leather Enter- Invoice number 3 77,121 prises, Modestoca, USA dated 12-4-1996 brought in to India on 4-11-1997 2. Andersen, Germany Invoice number 36 80,091 dated 9-12-1996 3. M/s. Horseman Corral, Invoice number 52 1,88,860 Modestoca, USA dated 4-3-1997 brought in India on 13-4-1998 - Rs. 78,495 on 16-8-1998- Rs. 1,10,065 ------------------------------------------------------------------------------------- As mentioned above, the Commissioner of Income-tax by the impugned order has refused to extend the time in respect of the buyers at serial Nos. 1 and 3 and has exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... competent authority to the factors relevant to the determination of the issue as to whether the assessee could not bring or receive the sale proceeds of the exported goods due to reasons beyond his control. The expression "reasons beyond his control" is not defined in the Act. It should be interpreted keeping in view the context in which it appears. The intention of the Legislature for enacting the aforesaid provision should also be kept in mind. The purposive interpretation of a statute is also one of the recognised principles of interpretation of statute. At this juncture it is to be noted that the Act prescribes a two-year period to complete an assessment. The Punjab and Haryana High Court in the case of Mayor and Co. v. CIT [2001] 248 ITR 162 has held that the expression "such further period", though not defined in the Act, keeping in view the limitation prescribed under the Act for completion of assessment within two years from the end of the assessment year, the extension contemplated by section 80HHC(2)(a) can be granted for the period ending with the expiry of two years from the end of the assessment year. To put it differently, if the sale proceeds of the goods or mercha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view "that it is not uncommon to find or visualise situation where there is temptation for exporters to deliberately delay the receipt of sale proceeds of goods exported by them in the expectation that fall in the value of Indian rupee would fetch them higher yield", vide para. 12 of the order. It has failed to take into consideration that the petitioner-assessee had exported goods of an aggregate value of Rs. 1,07,80,853. The unrealised amount from the foreign buyer, namely M/s. Prime Leather Enterprises, within the specified time was only a very small fraction of the total exports. The Commissioner of Income-tax has failed to consider the relevant circumstances such as the aggregate export sales and the unrealised convertible foreign exchange by the specified date in order to find out as to whether the assessee-petitioner deliberately delayed the receipt of sale proceeds of the goods exported by it in expectation that fall in value of Indian rupee would fetch it a higher yield. The power to extend time under section 80HHC(2)(a) has been given to the competent authority with certain purposes. The said power should be exercised in a quasi-judicial manner and with a view to achieve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at one cannot rule out the possibility that this was due to the fact that the assessee expected a higher yield in terms of Indian rupee by delaying the receipt of sale proceeds because of expectation of fall in the value of the Indian rupee. Another factor which has been taken into account is that immediately in the preceding year also the petitioner had failed to bring the sale proceeds into India from the same party within the period of six months referred to in section 80HHC(2)(a) of the Act. Therefore, he reached the conclusion that the assessee has been delaying the process of bringing the export sale proceeds in convertible foreign exchange into India in the past also and such delay adversely affects the national economy. Under section 80HHC(2)(a) of the Act the relevant consideration is whether the assessee is "for reasons beyond his control" unable to bring the convertible foreign exchange into India within a period of six months from the end of the previous year. The Commissioner of Income-tax has not disbelieved the personal visit of a partner of the petitioner-firm to the buyer's place and the request for early payment. The petitioner has written letters and reminders as ..... 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