Narinder Kumar Arora And Anr. vs Commissioner Of Income-Tax
2000 Latest Caselaw 408 Del

JUDGMENT

1. Notice to show cause why the petition be not admitted.

2. Mr. R.C. Pandey accepts notice on behalf of the respondent.

3. Since a short point is involved, with the consent of learned counsel for the parties, we proceed to dispose of this petition.

4. The main grievance of the petitioner in this case is that the claim of the petitioner for deduction under Section 80HHC of the Income-tax Act, 1961, has not been allowed by the competent authority. The petitioners filed a return with respect to the assessment year 1994-95 on November 9, 1994, claiming a sum of Rs. 3,91,991 as deduction under Section 80HHC of the Income-tax Act in respect of the export turnover of the company. The claim appears to have not been allowed on the ground that the money was not received within the statutory period of six months. The dispute centres around the issue as to whether the petitioner was required to make an application for extension of time for claiming deduction under Section 80HHC(2)(a) of the Act and if so, whether it was to be made before the expiry of the period of six months or it could be made subsequently also. In this connection, besides relying on the decision of the Allahabad High Court in Azad Tobacco Factory (P.) ltd. v. CIT [1997] 225 ITR 1002, learned counsel for the petitioner has drawn our attention to the provision

contained under Section 80HHC. He has particularly relied on the words ". . . be allowed in computing" the total income of the assessee, a deduction of the profits derived by the assessee from the export of such goods or merchandise". On the basis of the said provision it is submitted that it is the function of the Commissioner to allow deduction and no separate application for claiming deduction has to be made. On the other hand, learned counsel for the Revenue submits that the assessee is required to make an application otherwise how is the Commissioner to know the reasons justifying" extension of time. The relevant provision dealing with the question of extension of time as applicable during the assessment year in question was :

". . . where the Chief Commissioner or Commissioner is satisfied (for reasons to be recorded in writing) that the assessee is, for reasons beyond his control, unable to do so within the said period of six months, within such further period as the Chief Commissioner or Commissioner may allow in this behalf."

Relying on this provision, learned counsel for the Revenue emphasised that the assessee has to disclose the reasons justifying extension of time for getting foreign remittance and this can be done only by way of an application. There is merit in the submission of learned counsel for the Revenue that facts which justify extension of time can be brought to the notice of the Commissioner only by way of an application. However, the point for consideration is that there is no time limit prescribed for making such an application. As a matter of fact, learned counsel for the Revenue concedes that such an application could be made even after the period of six months.

5. In our view, a party ought to be able to make the application after the expiry of the period of six months. Rather, in the normal course, the occasion for making such an application would arise only when the period of time has already expired. There is some controversy about the application for extension of time having been made by the petitioner on August 4, 1994, The Revenue denies that any such application was ever made. However, there is no dispute that on February 17, 1998, the petitioner had again applied to the Commissioner for extension of time under Section 80HHC. This application was rejected vide letter dated May 12, 1998, simply on the ground that the petitioner had not made the application alleged to have been filed on August 4, 1994. In our view, this approach of the Commissioner was not correct. Since we have expressed the view that the application could have been filed even after the expiry of the period of six months, the Commissioner should have independently decided the application of the petitioner, dated February 17, 1998, on the merits. Rejection of the application simply on the ground that no application was made on August 4, 1994, was totally uncalled for. Thus, the present petition

succeeds and the Commissioner is directed to decide the application of the petitioner dated February 17, 1998, on the merits within four weeks from today. We may add by way of clarification that we are not expressing any opinion about the alleged application dated August 4, 1994.

6. This writ petition is disposed of accordingly with no order as to costs.