High Court Of Madras
Sarathy Palayacat Co. vs. Chief Commissioner Of Income Tax
R. Jayasimha Babu, J.
Writ Petn. No. 1288 of 1997 & WMP No. 2164 of 1997
30th October, 1998
R. JAYASIMHA BABU, J.
The petitioner was permitted to bring into India the sale proceeds of the goods exported beyond the period of six months from the end of the previous year and beyond 30th Aug., 1994 up to which date extension had been granted. The assessment year is 1993-94. The petitioner had made a further application for extension of time on 3rd Oct., 1995, to extend the time up to 7th Jan., 1995 on which date the sale proceeds had been brought into India. That application was rejected by the Chief CIT on 10th Jan., 1996 on the ground that extension cannot be given retrospectively.
2. Sec. 80HHC(2)(a) of the IT Act, 1961, inter alia, empowers the Chief CIT to fix the period beyond six months from the end of the previous year within which the exporter should bring in the monies into India. The relevant section reads as under : “80HHC(2)(a) This section applies to all goods or merchandise, other than those specified in cl. (b), if the sale proceeds of such goods or merchandise exported out of India are received in, or brought into India by the assessee other than the supporting manufacturer in convertible foreign exchange within a period of six months from the end of the previous year or, where the Chief CIT or CIT 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 CIT or CIT may allow in this behalf.”
3. The assessee is required to satisfy the CIT that for reasons beyond his control the petitioner is unable to bring the money into India in convertible foreign exchange within a period of six months or within such further period as the CIT had allowed and, therefore, further extension is warranted. The section does not prevent the CIT from extending the time on more than one occasion. The section does not lay down as a pre-condition that the exporter should have applied for extension before the expiry of six months from the end of the assessment year or that the extension should have been sought before the expiry of the period up to which the time had already been extended. A very wide discretion is vested in the Chief CIT to fix the period within which the exporter is to be permitted to bring the proceeds into India.
4. The Supreme Court of India in the case of CIT vs. Ajanta Electricals (1995) 126 CTR (SC) 144 : (1995) 215 ITR 114 (SC) : TC S9.1045 while construing the meaning of the word âextendâ in s. 139 (2) of the Act, inter alia, held as under : “We cannot accept the contention raised on behalf of the Revenue that the word âextendâ in the proviso to s. 139(2) implies that at the time of making the application the time allowed should not have expired. Though the CPC, 1908, by itself does not apply to the proceedings under the IT Act, we see no reason why a principle of procedure evolved for doing justice to a party to the proceeding cannot be called in aid while interpreting a procedural provision contained in the Act. . .” These observations of the apex Court apply with equal force for determining the proper construction to be placed on s. 80HHC(2)(a) of the Act. The provision here fixing the time within which the monies have to be brought into India is a procedural provision. That time can be varied by an order of the Chief CIT by extending the period within which the money has to be brought in. The primary object of the section is that the sale proceeds realised from the export of the goods should be brought into India in convertible foreign exchange. It is that primary purpose which should be shown to have been satisfied for the purpose of claiming the benefit granted under s. 80HHC. The period within which the monies are to be brought into India is a matter which is governed by the procedural aspect of the section which fixes the time-limit, which time-limit is not rigid but is capable of being extended by the Chief CIT. The rules of procedure are not meant to be strait-jackets by applying which the affected persons should be denied relief to which they may be entitled otherwise. If the circumstances established by the assessee were such as to warrant the exercise of the discretionary power of the Chief CIT, relief is not to be denied on the ground that the application was filed after time granted earlier had expired and the monies were brought into India after such expiry. The order of the CIT, therefore, is not sustainable and is set aside. The matter is remanded to the Chief CIT for fresh consideration in accordance with law and in the light of the observations made in the course of this order. Consequently, W.M.P. No. 2164 of 1997 is dismissed.
[Citation : 248 ITR 484]