MAYOR AND COMPANY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this petition filed under Art. 226 of the Constitution of India, the petitioner has prayed for quashing of the order Annexure P17, dt. 22nd Dec., 1998, passed by the CIT, Jalandhar (respondent No. 1), under S. 80HH(2)(a) of the IT Act, 1961 (for short, 'the Act'), and also the order of assessment Annexure P16, dt. 10th Dec., 1998, passed by the Jt. CIT, Special Range, Jalandhar (respondent No. 2), under S. 143(3) of the Act.

(2.) THE petitioner is manufacturing and exporting out of India sports goods, like footballs, rugby balls, volleyballs, etc. It is also exporting houseware items, such as stainless steel utensils after purchasing them from other manufacturers. In the asst. year 1996 97 the petitioner filed a return under S. 139(1) of the Act declaring its taxable income at Rs. 3,85,010 and claimed deduction to the tune of Rs. 2,06,03,389 under S. 80HHC(1) in lieu of the export of sports goods and household utensils worth Rs. 40,27,66,975.45 out of India. In terms of that section, the petitioner was entitled to claim deduction on the sale proceeds of the exported goods in convertible foreign exchange within a period of six months from the end of previous year commencing from 1st April, 1995, in contemplation of the delay in realisation of the proceeds of export sales by 30th Sept., 1996. It submitted an application under S. 80HHC(2)(a) before respondent No. 1, seeking extention of item upto 31st March, 1997. The relevant portion of that application is extracted below :

(3.) ON 28th June, 1997, the petitioner submitted application Annexure P4 for extension of time under S. 80HHC(2)(a) upto 31st Dec., 1997, by making the following statement :