TMI Blog2001 (7) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... guar which was continued in the same name and the application made by the to the CIT for grant of extension for bringing exchange was signed for Black Jaguar by her as (Paramjit) assessee. (iii) That the CIT(A) had condoned delay under s. 80HHC(2)(a) in respect of the transactions where foreign exchange could not be realized and the CIT(A) erred in not appreciating that the disallowances of the claim under s. 80HHC in respect of the said transactions was not justified. (iv) That the CIT(A) has erred in concluding that the appellant did not fulfil requirements under s. 80HHC. (v) That the learned CIT(A) erred in not appreciating the law and erred in disallowing the deduction under s. 80HHC. 3. Any other ground as may be urged at the time of hearing." 2.1. The assessee raised an additional ground in the following manner: "The appellant wants to raise following additional ground of appeal. It is requested that permission of the same may pleased be accorded. It could not be raised earlier because the judgment of Supreme Court in the case of CIT(A) Ors. vs. Ranchi Club Ltd. (2000) 164 CTR (SC) 200 touching the levy and chargeability of interest under ss. 234A and 234B has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return was accompanied with another report under s. 80HHC dt. 10th Jan., 1994, and in this return the assessee made a claim for Rs. 3,94,849 under s. 80HHC. The report included a remark in column 18 as mentioned below: "Remarks, if any out of the total foreign exchange realisation one bill was realised on 31st March, 1993, for a total amount of Rs. 4,07,798." The AO noticed that the report dt. 10th Jan., 1994, was different from the earlier report dt. 30th Oct., 1991, and also pointed out that the report under s. 80HHC(4) submitted by the assessee was not correct, and asked the assessee to give clarification as per detailed letter dt. 8th March, 1995, which is discussed at pp. 2 3 of the assessment order. There was further correspondence as mentioned on p 3, 4 and 5 of the assessment orders between the AO and the assessee. The AO came to the conclusion that the assessee filed a return under s. 139(5) of the IT Act but the assessee was not entitled to correct the wrong statement while filing the revised return. The AO relied on the decision of Hon'ble Allahabad High Court in the case of Addl. CIT vs. Radhe Sham (1979) 9 CTR (All) 171 : (1980) 123 ITR 125 (All). It was also po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eb., 1994, in the case of Shri Satinder Paul Shoor in appeal No. 276/93-94/CIT(A)/TAL. It was also pointed out that the audit report had been prepared within the prescribed period of six months and unrealised amounts were reflected in the list of sundry debtors although the auditor had not remarked about the foreign exchange bill receivable in his audit report. It was also argued that in the revised audit report dt. 10th Jan., 1994, it had been clearly mentioned that the foreign exchange bills of Rs. 4,07,798 had been realised on 31st March, 1993, and the extension had already been provided by the learned CIT(A) vide letter No. CIT-JL/ITO(C S)/94-95/1987 dt. 1st/3rd June, 1994. It was further argued before the learned CIT(A) that although the assessee had claimed exemption under s. 10B of the IT Act with the belief that this section applied to her but subsequently after filing of the return, it was realised that the assessee erred in claiming exemption under s. 10B which could be claimed only after obtaining the certificate from the competent authority. In view of that, the assessee filed a revised return as well as revised audit report under s. 80HHC of the IT Act in the prescribe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not be entertained. The provision of s. 139(5) clearly provide that the assessee might have furnished a revised return at any time from the end of the relevant assessment year or before the completion of assessment if the assessee discovered any omission or wrong statement made in the report earlier under s. 139(1) or in response to notice under s. 142(1), there was no dispute that the assessee had made a wrong claim of exemption under s. 10B and there was also virtually no dispute that the deduction under s. 80HHC could not be allowed to the assessee on the basis of audit report in the proforma filed with the original return. In those circumstances, the assessee was absolutely justified in filing the return under s. 139(5) of the IT Act which had to be considered by the AO while completing assessment. Therefore, the AO was not justified in not considering the revised return. The learned CIT(A) further observed that the case laws relied upon by the AO were not applicable because in the case of CIT vs. Redhey Sham, it was held that under the circumstances of that case penalty under s. 271(1)(c) was applicable even though assessee had filed revised return and in the case of CIT vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the assessee came to know that in order to entitle her for exemption under s. 10B, there was supposed to be an approval by the Board as appointed by the Central Government and as the said approval was not obtained in the case of the assessee, revised return under s. 139(5) on 30th March, 1994, was filed which was well within the stipulated time prescribed under s. 139(5) and the said revised return was accompanied by the audit report under s. 80HHC, dt. 10th Jan., 1994. In the said audit report, it was pointed out that out of her total sales of Rs. 10,93,459 as a sole proprietor, foreign bills of Rs. 4,07,798 had been realised as on 31st March, 1993. However, the assessee Smt. Paramjit Kaur during the course of the assessment proceedings in her case, moved an application under s. 80HHC(2)(a) to the learned CIT, Jalandhar, on 25th March, 1994, in order to get condonation of the delay in respect of receipt of the foreign exchange, relatable to goods exported to U.S.A. on 10th July, 1991, proceeds of which had not been received within six months from the end of previous year i.e., 1991-92 relevant to the asst. yr. 1992-93, but instead had been realised on 31st March, 1993. The said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee to the CIT, Jalandhar, for granting extension of time under s. 80HHC(2)(a) which is reproduced below: "Subject: Application under s. 80HHC(2)(a). Dear Sir, 1. The firm had exported goods to USA and the documents were negotiated through Bank of Baroda, G.T. Road, Jalandhar City, on 10th July, 1991, and the proceeds of the documents were realised on 31st March, 1993. 2. Assessment of the firm for the claim of deduction under s. 80HHC is pending before the authorities. 3. This application is moved before your goodself to condone the delay for the receipt of foreign exchange involved in the transaction which were beyond the control of the assessee. 4. For this purpose we enclosed herewith the following documents for your perusal and consideration to arrive at a logical conclusion in this regards: (a) A copy of the Invoice No. BJ/Exp/29/91 dt. 8th June, 1991, for Rs. 4,07,798 US $ 15,792. (b) Bill of lading No. HOLU-0108 DEL NY015 dt. 14th June, 1991. (c) A letter dt. 31st Dec, 1991, addressed to RBI Chandigarh informing them about the delay in receiving the realisation and permission to extend the period of realisation of export proceeds. (d) A copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Chief CIT/CIT to grant or refuse extension of time must be exercised reasonably and fairly and must not be exercised arbitrarily and the order passed by the concerned authority must reflect objective application of mind 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." 7.4. The learned authorised representative further argued that foreign debtors which stood reflected in the balance sheet of the assessee, Smt. Paramjit Kaur, proprietor of M/s Black Jaguar, as on 30th Sept., 1991, co-relating to which credit has been given in her capital account with the partnership firm M/s Block Jaguar as on 1st Oct., 1991, were not taken over by the said firm, rather the credit given in the capital account of Smt. Paramjit Kaur stood qualified subject to realisation of the said foreign debts, and it is only then that owing to the fiduciary relation of the partner towards the partnership firm, the said credit in the capital account would attain finality, failing which the said credit is supposed to be withdrawn, keeping in view the spirit of s. 88 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tipulated period under s. 80HHC(2)(a), and therein had never filed any application for extension or condonation of delay of receipt of foreign exchange. However, the learned CIT(A) had confused the application filed by Smt. Paramjit Kaur proprietor of M/s Black Jaguar on 25th March, 1994, as that of partnership firm, but what is very strange and rather beyond imagination is that how could deduction under s. 80HHC be allowed by the learned CIT(A) to a person who had not carried out co-relating export, Rather it appears that the learned CIT(A) by creating the aforesaid confused scenario, wherein the person, i.e., the assessee Smt. Paramjit Kaur who had carried out the export and duly satisfied other requisites for claim of the deduction under s. 80HHC has been denied the same on certain baseless and flimsy assumptions/presumptions and rather directions had been issued to allow the said deduction to a person i.e., partnership firm i.e., M/s Black Jaguar who had never carried out the said export transaction. The said methodology so taken recourse by the learned CIT(A) can rather be briefed as: "Heads I win, tails you lose". The learned authorised representative finally stated that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was granted to the partnership firm and not to the individual. On perusing the contents of the application dt. 25th March, 1994, under s. 80HHC(2)(a) it is noticed that the extension was sought in Bill of lending No. HOLU-0108 DEL NY 015, dt. 14th June, 1991, pertaining to the invoice No. BJ/Exp/29-91, dt. 8th June, 1991, for Rs. 4,07,798 which clearly shows that the goods were exported by the individual Smt. Paramjit Kaur because there was no partnership firm in the name of M/s Black Jaguar in existence on that date. Rather Smt. Paramjit Kaur was the proprietor of the firm M/s Black Jaguar. It is also noticed that in the aforesaid application, the name of the applicant mentioned therein is 'Paramjit, the assessee' and not partner-Paramjit, which also supports the contention of the assessee that the application for extension under s. 80HHC(2)(a) was sought by the assessee Smt. Paramjit Kaur in her individual capacity and not in the capacity of the partner of the partnership firm M/s Black Jaguar. The claim of the assessee cannot be rejected merely on the basis that PAN No. i.e., 26-603-FV-2096, Ward 1(3) Jal. mentioned in the application dt. 25th March, 1994, was of the partnershi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chemicals vs. Asstt. CIT (2001) 73 TTJ (Del) 124 : (2001) 76 ITD 367 (Del). 10.1. After hearing both the, parties and perusing the assessment order under s. 143(3) and demand notice under s. 156, it is noticed that the AO did not pass specific order as far as charging of interest under ss. 234A and 234B is concerned. The AO in his assessment order placed at page No, 27 of 34 of the paper book mentioned as under: "Issue demand notice and challan. Give credit for prepaid taxes after due verification. Penalty proceedings under s. 271(1)(c) have separately been initiated. Assessed. Issue demand notice and challan." In the notice dt. 27th March, 1995, placed at pp. 35 and 36 of the paper book, it is mentioned as under: "This is to give you notice that for the asst. yr. 1992-93, sum of Rs. 3,115 details of which are given on the reverse has been determined to be payable by you." On the reverse of this demand notice nothing is mentioned except date, place and signature of the AO. From the facts discussed above, it is crystal clear that the AO had not mentioned charging of the interest under ss. 234A and 284B in the assessment order as well as in the demand notice. The Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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