TMI Blog2013 (9) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... s from the end of previous year – Decided in favor of Assessee. - Writ Petition (Civil) No. 646/1997 - - - Dated:- 14-8-2013 - Sanjiv Khanna And Sanjeev Sachdeva,JJ. For the Petitioner : Mr. Sandeep Sapra, Advocate. For the Respondent : Mr. Sanjeev Sabharwal, Sr. Standing Counsel. ORDER Sanjiv Khanna, J. (Oral): M/s York Exports Private Limited has filed the present writ petition for quashing of order dated 19th December, 1996 read with order dated 17th August, 1995 passed by Commissioner of Income Tax, Delhi-III. 2. The petitioner is a limited company engaged in manufacture and export of woollen and cotton hosiery goods. During the period relevant to Assessment Year 1994-95, the petitioner had exported almost 100% of its produce to erstwhile USSR/Russia. The exports were made on documents against collection basis and the export proceeds were to be received in convertible foreign exchange. 3. The petitioner for the purpose of taxation wanted to claim benefit under Section 80HHC of the Income Tax Act, 1961 (Act, for short) in respect of profits derived from exports. As per clause 2(a) to Section 80HHC, the petitioner to avail of the said benefit was requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner had partly succeeded as proceeds amounting to Rs.45,83,662/- had been received from the Russian buyers. The details of the said export proceeds received was enclosed. It was stated that the petitioner was experiencing great problem in recovery of the export proceeds within the specified time on account of fluctuation in Russian currency and fall in value of Rouble against dollar etc. It was again highlighted that the petitioner had filed application with the Reserve Bank of India for extension of time due to the peculiar and difficult circumstances. 7. The two applications remained pending and were not taken up for consideration. The petitioner thereupon wrote letter/application dated 10th August, 1995. In this application, the petitioner gave full details, i.e., party-wise summary of unrealised export payments as on 1st September, 1994, party-wise exports for the year ending 31st March, 1994 and payments received upto 2nd August, 1995. It was stated that the petitioner had already received payments to the extent of Rs.4,37,85,885/- leaving an outstanding balance of Rs.60,27,458/-. 8. Respondent No. 1 vide his order dated 17th August, 1995 allowed the first applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the provisions quoted above shows that under sub-section (1) of Section 80HHC an assessee engaged in the business of export out of India of goods or merchandise to which the provisions of that Section apply is entitled to deduction of profits derived from the export of such goods or merchandise in computing his total income. Clause (a) of sub-section (2) of Section 80HHC lays down that the assessee is entitled to claim deduction of the profits derived by him from the export of specified goods out of India, if the sale proceeds of such goods or merchandise exported out of India received in, or brought into, India in convertible foreign exchange within a period of six months from the end of the previous year or within such further period as the Chief Commissioner or Commissioner may allow in this behalf on being satisfied that the assessee was unable to do so within the said period of six months due to reasons beyond his control. For exercise of this power, the Chief Commissioner or Commissioner, as the case may be, has to record reasons in writing. This means that the power vested in the competent authority to grant extension of time, which necessarily includes the power to refu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him and once the assessee satisfied the Chief Commissioner or the Commissioner that the sale proceeds could not be brought within the stipulated period, due to reasons beyond his control, the extension contemplated by Section 80HHC(2)(a) has to be granted as a matter of course, unless there are other cogent reasons for not doing so. This interpretation of sub-section (2)(a) of Section 80HHC is consistent with the object sought to be achieved by incorporating Section 80 HHC, i.e., to encourage export of goods and merchandise out of India for earning foreign exchange. 12. Delhi High Court in Kausales Exports (India) versus Commissioner of Income Tax and Another, 1999 (240) ITR 108 had allowed the writ petition after noticing that the importer in London was facing financial stringency due to recession in the market and, therefore, had not remitted the payment. It was held that when there was sufficient material to demonstrate that the assessee was regularly following up the matter, relief could not be denied only because there was a delay in filing the application for extension of time. In Narinder Kumar Arora and Another versus Commissioner of Income Tax, 2000 (245) ITR 10 (Del) i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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