High Court Of Calcutta
Drastic Forging (P) Ltd. & Anr. vs. DCIT & Ors.
Section 80HHC, Art. 226
Asst. Year 1993-94
Pinaki Chandra Ghose, J.
Writ Petn. No. 1017 of 2001
19th December, 2001
Hirak Mitra, for the Petitioner : Som, for the Respondent
PINAKI CHANDRA GHOSE, J. :
This is an application inter alia, for issuance of a writ in the nature of mandamus commanding the respondents to withdraw, cancel, recall and rescind the impugned order of the assessment passed by the respondent No. 1 for the asst. yr. 1993-94 in refusing to allow the full deduction to the petitioners under s. 80HHC of the IT Act, 1961 (hereinafter referred to as the said Act), and further writ in the nature of mandamus commanding the respondent No. 2 to grant approval under s. 80HHC(2)(a) of the said Act beyond six months to forbear from giving effect to the amendment in respect of s. 80HHC(2)(a) w.e.f. 1st June, 1999, by the Finance Act, 1961 (sicâ1999), and also to dispose of the application filed by the petitioner for extension of time for repatriation of balance export value beyond six months.
2. Facts of the case briefly are as follows : The petitioner No. 1 is a private limited company. The petitioner No. 1 supplied materials in terms of an order received at Rs. 40,19,677.69. The petitioner earned an export profit of Rs. 27,08,787. The petitioner No. 1 filed return for the said assessment year and a ânilâ return was filed under s. 139(1) of the said Act. The petitioner No. 1 also filed an audited account, tax audit and prescribed certificate for claim of deduction under s. 80HHC of the said Act. The said return was originally accepted under s. 143(1)(a) of the said Act and the notice of hearing was issued under s. 143(2) of the said Act.
The petitioner in course of hearing filed its details of realisation of sale proceeds which were effected within six months. According to the petitioner, the petitioner No. 1 realised a sum of Rs. 25,71,655 out of total sale proceeds of Rs. 40,19,677.69 leaving a balance sum of Rs. 14,48,022.80. According to the petitioner, the petitioner was able to realise Rs. 36,13,808 out of the said total sale proceeds.
The Assessing Officer (hereinafter referred to as the AO) refused to grant any deduction to the petitioner in respect of the amount which could not be realised by the petitioner. According to the petitioner, AO had no jurisdiction to assume jurisdiction under s. 80HHC(2)(a). The claim of the said deduction under s. 80HHC is applicable in respect of the export proceeds. According to the petitioner, the AO was obliged to refer the matter to the Commissioner of Income-tax (hereinafter referred to as CIT) for his approval or disapproval since the AO had no jurisdiction in the matter to decide the same. Accordingly, it is submitted that the said AO passed such order without any jurisdiction. It is further case of the petitioner that the petitioner applied before the CIT for extension of time for bringing the balance export proceeds beyond the period of six months on 16th Feb., 2001, 5th March, 2001 and 16th March, 2001, by their letters. The CIT, West Bengal-IV returned the petitionersâ application for extension of time for repatriation of sale proceeds by a letter dt. 22nd/23rd March, 2001.
According to the petitioner, the charge brought in by the Finance Act, 1999, was w.e.f. 1st June, 1999, and such charges cannot affect the petitioners application. The CIT, West Bengal-IV refused to do so in view of the fact that the law has been amended and such power only can be exercised by the Reserve Bank of India or such other authority specifically vested with the said power. According to the petitioner No. 1, said CIT has also failed to exercise his jurisdiction vested in him for the order. According to him, the order passed by the said CIT is also bad in law. Hence this writ application has been filed praying from the aforesaid relief in the writ petition.
3. Mr. Hirak Mitra appearing on behalf of the petitioners contended that the AO had no authority or has any jurisdiction to decide the matter in view of the fact that only the CIT has power either to grant extension or to refuse the same. Therefore, the order of refusal passed by the AO under s. 80HHC of the said Act is totally without jurisdiction for the said assessment year. He further contended that the amendment which has been taken place after the transaction took place. Therefore, according to him, the changes in the Finance Act will not allow the CIT to refuse or to return the said application filed by the petitioners for extension. He further contended that the changes to be given effect to prospectively and not retrospectively. He also relied upon a judgment CIT vs. John Peter & Anr. (2000) 162 CTR (Mad) 283 : (2000) 243 ITR 561 (Mad) and contended that the Honâble Court was pleased to direct the CIT to dispose of the application filed by the petitioner on merits. Mr. Som appearing on behalf of the respondents contended that the petitioner has suppressed material facts from this Court. He also submitted that on 6th Dec., 1993, petitioner filed as return of income. On 8th Sept., 1994, notice under s. 143(2) of the said Act was issued processing under s. 143(1)(a) was made on 23rd Nov., 1994, and then on 18th Oct., 1995, notice under s. 143(2) was issued to the petitioner No. 1. Further on 5th Dec., 1995, notice under s. 143(2) was again issued and thereafter, on 21st March, 1996, AO passed the order under s. 143(2) which was issued. An appeal was preferred by the petitioner on 18th Dec., 1996, CIT(A) passed order confirming the said issue. On 18th Feb., 1997, petitioner further filed appeal before the Tribunal. On 14th Feb., 2001 stay petition filed before the CIT, West Bengal-IV, Kolkata. On 20th Feb., 2001, assessee filed stay petition before the Addl. CIT, Range-12, Kolkata. On 22nd Feb., 2001, report of the AO was sent to CIT, West Bengal-IV, Kolkata on stay petition. On 27th Feb., 2001, application was filed under s. 155(13) r/w s. 154. On 28th Feb., 2001, CIT, West Bengal-IVâs order was issued on stay petition and thereafter, on 28th Feb., 2001, recovery of demand was made by the AO from HDFC Bank. Thereafter, it appears that the petitioner filed an application on 5th March, 2001 before the CIT, West Bengal-IV, Kolkata for extension of time under s. 80HHC(2)(a). On 7th March, 2001, application was filed before the CBDT regarding the attachment of bank accounts. Then on 9th May, 2001, the application filed by the petitioner under s. 155(13) r/w s. 154 was rejected by the respondents authority. Respondent-authority received a writ petition filed by the petitioner on 18th May, 2001.
4. Mr. Som submitted that all these facts were suppressed from this Honâble Court. He further contended that the petitioner subsequent to the filing of the writ petition filed a supplementary affidavit affirmed on 25th June, 2001, when for the first time the matter came up before this Court and such point of suppression was taken by the respondent authorities. He further drew my attention to the said affidavit and contended that the petitioner has only filed the said document by way of said supplementary affidavit after filing of the petition in this Honâble Court. He further contended that an application under s. 155(13) of the said Act was also filed by the petitioner. It has been specifically informed to the petitioner by a letter dt. 18th May, 2001, that the Reserve Bank of India or such other authority has authorised under the law to take the steps in the matter and the CIT had no authority to deal with the matter any further in view of the fact that the amendment took place in the year 1995 and further he contended that after 1st June, 1999, the extension (sic) is clear that the CIT has no authority to deal with the matter. He further contended that since the matter is pending before the Tribunal which has been suppressed in this proceeding, the parallel proceedings are not permissible under the law. In support of such contention he relied upon the judgment Coca-Cola Export Corpn. vs. S.C. Tiwari, ITO & Ors. (1986) 52 CTR (Del) 5 : (1986) 158 ITR 439 (Del) : TC 51R.1159, Purshottam Thakersey vs. K.N. Anantarama Ayyer CWT & Anr. (1984) 39 CTR (Bom) 249 : (1985) 154 ITR 395 (Bom) : TC 66R.960 and Sheo Nath Singh vs. AAC 1973 CTR (SC) 484 : (1971) 82 ITR 147 (SC) : TC 51R.631. Mr. Som further contended that the said judgment (2000) 162 CTR (Mad) 283 : (2000) 243 ITR 560 (Mad) (supra) has no application in this case and he further drew my attention to the Explanation of s. 80HHC(2) where it has been specifically stated that the CIT has no power because he is not dealings in the foreign exchange.
5. After considering the facts and circumstances of this case and after hearing the parties I do not have any hesitation to accept the contention of Mr. Som and I hold that the petitioner knowing fully well that the matter is pending before the Tribunal and should not have filed this application before this Court. In my opinion, there is a material suppression of facts from this Court by not stating the said fact in the writ application in my opinion subsequent filing of the supplementary affidavit and furthermore without affirming the said fact positively cannot give right to the petitioner to get any relief from this Court. I further do not have any hesitation to hold that the point urged before me that the CIT has no authority to deal with the matter since the petitioner did apply for such extension after amending took effect in the year 1999. It would also evident from the letters and the application forwarded by the petitioner only in the year 2001 and much after the amendment came into effect. I further do not have any hesitation to accept the contention of Mr. Som that the CIT had no power to decide the matter after amendment of s. 80HHC.
Accordingly, in my opinion in would not be proper for me to pass any order on this application and on these facts this application must fail and is hereby dismissed.
[Citation : 257 ITR 323]