9911796707
TMI Blog2002 (8) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... application is whether, in the facts and circumstances of the case, petitioner No. 1 is entitled to extension of time in terms of section 80HHC(2)(a) of the Income-tax Act, 1961, in respect of its claim for deduction in respect of the assessment year 1994-95. It is dependent upon the above question that the other reliefs prayed for require to be considered. Petitioner No. 1 claims that it is entitled to deduction of a sum of Rs. 2,86,565 under section 80HHC of the Income-tax Act, 1961, in respect of the said assessment year 1994-95 in respect of the exports made by it during the previous year 1993-94 relevant to the assessment year 1994-95. The background facts are stated in the impugned order being annexure P15. Briefly, stated, they are: The petitioner-assessee is engaged, inter alia, in the business of export of tea. The petitioner claims entitlement to deduction of profits derived from exports of tea in the computation of its total income under section 80HHC(1) of the Act. Section 80HHC(2)(a) before its amendment with effect from June 1, 1999, provides for such entitlement to deduction of the export profits, if the sale proceeds of specified goods is received, or bro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee could not produce any document to show that it had applied to the Reserve Bank of India in the prescribed form requesting for permission to extend the period for realisation of export proceeds. (ii) There was no material brought on record before the Commissioner of Income-tax to reach satisfaction that the assessee had acted with due diligence and taken necessary steps to bring the sale proceeds on or before September 30, 1994. Mere existence of a dispute with the foreign buyer it was held would not mean that the circumstances were beyond the control of the assessee. (iii) The record shows that the director of the foreign buyer, with whom the dispute arose, was also a shareholder of the assessee and hence the trans action was not at arm's length. (iv) The income-tax return for the relevant year was not filed voluntarily. Even after the service of notice under section 148 of the Act on September 26, 1996, the petitioner-assessee took about sixteen months to file the return on January 20, 1998. The application for extension of time under section 80HHC(2)(a) was filed much after two years from the end of the relevant assessment year. Assailing the aforesaid conclusions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er has relied upon the judgment of this High Court in Geekay Exim (India) Ltd. v. CIT [1998] 234 ITR 560 and sought to distinguish the judgments referred to and relied upon by the Commissioner of Income-tax in his impugned order. On the other hand, Mr. Shome, appearing along with Mr. Nizamuddin, learned counsel for the respondent-Revenue authorities, submitted that the order under challenge suffers from no legal infirmity. It is a reasoned order and is supported by the authorities. The conduct of the petitioner as noticed in the impugned order and for the reasons stated by the Commissioner of Income-tax in the impugned order, the petitioner is not entitled to grant of any relief, contends Mr. Shome. Reliance has been placed upon the judgments of the Punjab and Haryana High Court as also upon a judgment of the Supreme Court, reference to which shall be made at the appropriate juncture. The rival contentions need to be considered in the light of the statutory provisions of section 80HHC of the Income-tax Act. The said section 80HHC has been the subject-matter of consideration by the Punjab and Haryana High Court and also by this High Court. A perusal of the unamended provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... control. After having observed that the expression "such further period" has also not been defined in the Act, their Lordships keeping in view the limitation prescribed under section 153 of the Act for passing of the order of assessment, i.e., two years from the end of the assessment year held: " ...there is no difficulty in holding that 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. In other words, if the sale proceeds of the goods or merchandise exported out of India, are received, or brought into India by the assessee in convertible foreign exchange within the period of two years from the end of the assessment year and he shows that the amount could not be brought or received earlier on account of reasons beyond his control, then the Chief Commissioner or the Commissioner, as the case may be, is obliged to grant extension of time. The discretion conferred upon the Chief Commissioner or the Commissioner under section 80HHC(2)(a) is not unbridled or unguided. Rather it is limited to the consideration of the plea of the assessee that the sale proceeds could not be brought int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of six months from the end of the previous year or before the filing of the return. I am in respectful agreement with the aforesaid views of P. C. Ghosh J. In the absence of any bar contained in the provision in question or any stipulation as to the time within which an application must be made for extension of time the assessee cannot be denied the right to make an application for extension of time even after the specified period of six months had elapsed. However, in the case on hand that is not the ground of rejection. Mr. Shome, learned counsel for the tax authorities, referred to the judgment of the Supreme Court in Raja Jagdambika Pratap Narain Singh v. CBDT [1975] 100 ITR 698, in support of his contention and as held by the Supreme Court in that case: "If a party is inexplicably insouciant and unduly belated due to laches, the court may ordinarily deny redress". Although the said observations were made by the Supreme Court in the context of the exercise of jurisdiction under article 226, Mr. Shome submitted that the same are apposite and relevant in the enquiry on hand and specially keeping in view the conduct of the petitioner-assessee, as noticed in the impugned orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hange into the country within a reasonable time." Mr. Sumit Talukdar sought to rely upon favourable statements and distinguish the unfavourable ones in that judgment by submitting that in the -case on hand the amount had been credited to the account of the petitioner as can be seen from the impugned order pursuant to the decree passed by the Calcutta High Court in civil suit proceedings on January 29, 1998. It is not a case where several extensions had been granted by the Commissioner of Income-tax and despite the same the assessee could not bring in the amounts within the extended period. Mr. Sumit Talukdar further submitted that in D. B. Exports (India)'s case [1998] 231 ITR 836 (P & H) extensions were allowed to the petitioner for more than two years to bring in the convertible foreign exchange. The distinguishing feature therefore contends Mr. Talukdar is that during the said period civil and criminal proceedings had started between the assessee and the foreign buyer which were not likely to conclude soon and for that reason the court in that case declined further extension of time. I cannot accede to the above submissions. The institution of proceedings civil and/or crimin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n can be filed even after the specified period of six months had elapsed. It does not imply or mean that an assessee can file the application for extension in time whenever it should suit the assessee. In D. B. Exports (India)'s case [1998] 231 ITR 836 (P & H) extensions were allowed to the petitioner, in that case for more than two years to bring convertible foreign exchange into the country. During that period civil and criminal proceedings had been started between the petitioner and the defaulting party which were not likely to conclude soon and on that ground the extension has been declined. The court upheld the order of the Commissioner of Income-tax under challenge in that case, inter alia, on the ground that it cannot be said that the discretion exercised by the Commissioner of Income-tax was arbitrary or unjust. In Mayor and Co.'s case [2001] 248 ITR 162 (P & H), notice has been taken of the said decision and it was distinguished on the ground that no litigation has commenced and the entire amount of sale proceeds in that case (Mayor and Co.) had been received almost three months before the passing of the impugned order and more importantly it was observed by the court that ..... 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