MEHRA INTERNATIONAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) Petition on hand is directed against order dated 30th Nov 1998 passed by income Tax Officer (Tech) on behalf of the Commissioner Income Tax Kanpur thereby refusing to grant extension of time sought for under sec 80 HHC (2) (a) of the income Tax Act, 1961 on the ground that your petition dated 30th Sept 97 filed before me is not in time and no reasonable cause has been shown by you for non- realization of export sale proceeds in convertible foreign exchange within statutory time limit.

(2.) Having heard the learned counsel for the petitioner and the standing counsel appearing for the income Tax Department and upon regard being had to the reasons disclosed in the application seeking extension of time, we are of the considered view that the impugned order suffers from patent infirmity as discussed hereinafter (The power of extension of period conferred by sub-sec (2) (a) of Sec 80 HHC can be exercised on an application whether moved within six months from the end of the previous year or moved within a reasonable period beyond the period of six months) The period prescribed by the statute is for bringing the sale proceeds in India in convertible foreign exchange within six months it does not prescribe a time limit within which the assessee is to seek extension of period. All that the sub-sec as it stood before its amendment by the Finance Act, 1999 with effect from 1.6.1999 required is that 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 It cannot be gainsaid that the proceeds of goods or merchandise exported out of India may be received in or brought into India by the assessee upto the statutory period of six months. Extension of period may be sought for by means of an application moved either before or after expiration of the said period of six months. We, however, hasten to add that if the sale proceeds of such goods or merchandise are not received in, or brought into, India within six months and the application for seeking extension is not filed within that period, it must be filed within a reasonable period after expiration of the six months period. The view taken by the Competent authority that the application was liable to be rejected as it was not filed in time, is not borne out on proper construction of sub-sec (2) (a) of Sec 80 HHC of the Income Tax Act.

(3.) The reasons given in the impugned order that the petition seeking extension was not filed in time, is no ground to reject the application. The said view appears to be based on misconstruction of the provisions contained in Sec 80 HHC (2) (a) which in our opinion visualizes that the period can be extended even if petition is filed beyond the statutory period of six months. The expression within such further period as the Chief Commissioner or Commissioner ,may allow in this behalf is significant Such further period may be granted on an application moved after expiration of the period of six months within which period the sale proceeds are supposed to be brought within India in convertible foreign exchange.