Income Tax Appellate Tribunal - Amritsar
Smt. Paramjit Kaur vs Ito on 10 July, 2001
Equivalent citations: (2001)73TTJ(ASR)388
ORDER
N.K. Saini, A.M. This is an appeal filed by the assessee against the order of the Commissioner (Appeals), Jalandhar, dated 13-11-1998, relating to assessment year 1992-93.
2. The grounds raised by the assessee, in this appeal, reads as under :
"1. That the order of the learned Commissioner (Appeals) is against law and facts of the case.
2. That the learned Commissioner (Appeals) has erred in disallowing deduction under section 80HHC, because;
(i) That the Commissioner (Appeals) erred in not appreciating that the appellant carried on business as individually till 30-9-1991, under the name and style of Black Jaguar and on 1-10-1991, her son joined her as partner and the name and style of the business under which the business was being carried on remained unchanged and the assets and liabilities of the business were taken over by the firm.
(ii) The Commissioner (Appeals) has erred in not appreciating that the appellant carried on the business in her individual capacity, till 30-9-1991, also under the name and style of Black Jaguar which was continued in the same name and the application made by her to the Commissioner for, grant of extension for bringing exchange was signed for Black Jaguar by her as (Paramjit) assessee.
(iii) That the Commissioner (Appeals) had condoned delay under section 80HHC(2)(a) in respect of the transactions where foreign exchange could not be realized and the Commissioner (Appeals) erred in not appreciating that the disallowances of the claim under section 80HHC in respect of the said transactions was not justified.
(vi) That the Commissioner (Appeals) has erred in concluding that the appellant did riot fulfil requirements under section 80HHC.
(v) That the learned Commissioner (Appeals) erred in not appreciating the law and erred in disallowing the deduction under section 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 Commissioner (Appeals) & Ors. v. Ranchi Club Ltd. (2000) 164 CTR (SC) 200 touching the levy and chargeability of interest under sections 234A and 234B has come after the filing on the appeal. No fresh enquiry in needed in respect of the case as all the facts are on record.
Grounds of Appeal The learned assessing officer erred in levying interest amounting to Rs. 2,99,390 under section 234B :
(i) not on the tax on income as declared by the assessee but on the income as determined by the assessing officer, and
(ii) without passing any specific order.
3. Later on, vide application dated 3-4-2001, the assessee sought permission to rectify the amount of Rs. 2,99,390 mentioned in the additional ground to be replaced by the figure of Rs. 1,51,946. Regarding admission of additional ground, the learned authorised representative relied on the judgment of the Honble Supreme Court in the case of National Thermal Company v. CIT (1999) 157 CTR (SC) 249 : (1998) 229 ITR 383 (SC), wherein it was held that the Tribunal has jurisdiction to examine question of law which arose from the facts found by the income-tax authorities and having a bearing on the tax liability of the assessee.
4. After hearing both the representatives and keeping in view the ratio laid down by the Honble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT (supra), the additional ground raised by the assessee is admitted.
5. The main grievances of the assessee vide this appeal pertains to the deduction under section 80HHC. The relevant facts for this issue appearing in the orders of the authorities below in brief are that the assessee was a proprietor of M/s Black Jaguar, Jalandhar, for the period from 1-4-1991, to 31-9-1991. The business of this firm was transferred to a partnership firm which was constituted with effect from 1-10-1991, and was also named as M/s Black Jaguar. The assessee Mrs. Paramjit Kaur became a partner in this new partnership firm and further filed her return on 30-10-1992, declaring Nil income. The return was accompanied by a balance sheet, trading and profit & loss account of the proprietary concern and also a report under section 80HHC(4), dated 30-10-1991. However, the assessee claimed exemption of Rs. 4,33,368 under section 10B of the Income Tax Act. During the assessment proceedings, the assessing officer asked, the assessee to justify the claim under 10B of the Income Tax Act. The assessee did not file any reply nor the notice under section 143(2)/142(1) issued by the assessing officer were complied with. However, a revised return was filed on 30-3-1994, declaring an income of 6,845. The revised return was accompanied with another report under section 80HHC dated 10-1-1994, and in this return the assessee made a claim for Rs. 3,94,849 under section 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 31-3-1993, for a total amount of Rs. 4,07,798."
The assessing officer noticed that the report dated 10-1-1994, was different from the earlier report dated 30-10-1991, and also pointed out that the report under section 80HHC(4) submitted by the assessee was not correct, and asked the assessee to give clarification as per detailed letter dated 8-3-1995, 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 assessing officer and the assessee. The assessing officer came to the conclusion that the ----------------------- return under section 139(5) of the Income Tax Act but the assessee was not ------------------- the wrong statement while filing the revised return. The assessing officer ------------------- of Honble Allahabad High Court in the case of Addl. CIT ------------------------- (1979) 9 CTR (All) 171 : (1980) 123 ITR 125 (AD). It was also----------------------assessing officer that the return filed by the assessee on 30-10-1992 had a false claim under section 10B and the assessees explanation that this claim was inadvertent could not be accepted. It was also pointed out that the return filed on 30-10-1992, was accompanied by an audit report under section 80HHC dated 30-10-1991 and that the proforma of audit report under section 80HHC had under gone radical change before 30-10-1992, and the assessee had not filed the certificate in the prescribed proforma. It was also pointed out that the report submitted with the return dated 30-10-1992, did not give any indication of pending foreign exchange realisation to the extent of Rs, 4,07,798 out of total sales of Rs. 10,93,459 and that the assessee had moved the Commissioner under section 80HHC(2)(a) on 25-3-1994, although the certificate under section 80HHC was dated 30-10-1991.
5.1. By pointing out the above facts, the assessing officer came to the conclusion that the revised return filed by the assessee could not be entertained and that the claim under section 10B of the Income Tax Act was not justified as accepted by the assessee. Accordingly, it was held that no deduction under section 80HHC could be allowed to the assessee and the income of the assessee was computed as under :
Rs.
Income as per profit & loss account 3,42,246 Share income from M/s Black Jaguar 79,405 4,21,651 "The assessing officer further mentioned that issue demand notice and challan. Give credit for prepaid taxes after due verification."
6. In the first appeal before the Commissioner (Appeals), it was argued that the audit report dated 30-10-1991, was filed by the assessee along with the return for the period from 1-4-1991, to 30-9-1991, when the assessee was proprietor of M/s Black Jaguar. It was further submitted that the report was in the form which was in force as on 30-10-1991, as the change of the proforma was effective from 1-4-1992, vide notification dated 13-7-1992. In view of that audit report was in prescribed proforma. As an alternative, the learned counsel of the assessee argued that even if it was not in the prescribed proforma, the assessing officer was duty bound to allow deduction under section 80HHC. The reliance was placed on the decision of predecessor of the Commissioner (Appeals) vide order dated 21-2-1994, in the case of Shri Satinder Paul Shoor in appeal No. 276/9394/Commissioner (Appeals)/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 dated 10-1-1994, it had been clearly mentioned that the foreign exchange bills of Rs. 4,07,798 had been realised on 31-3-1993, and the extension had already been provided by the learned Commissioner (Appeals) vide letter No. Commissioner -JL/Income Tax Officer(C&S)/94-95/1987 dated 1st/3-6-1994. It was further argued before the learned Commissioner (Appeals) that although the assessee had claimed exemption under section 10B of the Income Tax Act with the belief-------------------applied to her but subsequently after filing of the return, it was assessee erred in claiming exemption under section 10B which-------------------after obtaining the certificate from the competent authority. In---------assessee filed a revised return as well as revised audit report under section 80HHC of the Income Tax Act in the prescribed proforma. It was pointed out that the bona fide of the assessee were proved when the assessee had claimed exemption under section 10B and appended the audit report under section 80HHC thus, leaving the applicability of relevant section to the assessing authority. It was also argued that the time period within which the return could be revised under section 139(5) was still available when the assessee filed the revised return and the assessing officers conclusion that the revised return could not be entertained was not correct. The learned counsel of the assessee further argued that the provision of filing of the audit report was not mandatory but directory. The reliance in this regard was placed on the decision of Tribunal Calcutta Bench, in the case of Magnum Exports (P) Ltd. v. Assistant Commissioner (1996) Tax LR 478 as well as the decision in CIT v. Rai Bahadur Bissesswar Lal Motilal Malwasie Trust (1992) 195 ITR 825 (Cal). The learned authorised representative further stated that the tax laws are very complicated and even the professional find it difficult to understand itss complexity. In this regard, the remarks of Mr. Justice Andley, the then Chief Justice of Delhi High Court as reported in Vol. 1 p. 7 of Tax Law Review, has been pointed out as reported below :
"Not only the assessee, but even the professionals, and tax experts and tax collectors are many times baffled with the legal quibblings, They have to learn, unlearn and relearn the law, which has become tortuously complicated and the proliferation of the tax machinery has become a negative feature of the whole exercise. "
6.1. The learned Commissioner (Appeals) in his impugned order observed that there was no dispute that the assessee was not entitled to exemption under section 10B of the Income Tax Act. As far as deduction under section 80HHC was concerned, it was observed that : the first return was filed on 30-10-1992, and the report under section 80HHC(4) submitted along with the return was not in prescribed proforma but in the earlier proforma which had been changed with effect from 1-4-1992, and the notification for the change had already been Issued in July, 1992. As such it could at best be concluded that there was no valid audit report under section 80HHC filed with the original return. The learned Commissioner (Appeals) further observed that the discrepancy was pointed out by the assessing officer but it was not possible to accept that the assessees revised return in those circumstances could not be entertained. The provision of section 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 section 139(1) or in response to notice under section 142(1), there was no dispute that the assessee had made a wrong claim of exemption under section 10B and there was also virtually no dispute that the deduction under section 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 section 139(5) of the Income Tax Act which had to be considered by the assessing officer while completing assessment. Therefore, the assessing officer was not justified in not considering the revised return. The learned Commissioner (Appeals) further observed that the case laws relied upon by the assessing officer were not applicable because in the case of CIT v. Redhey Sham (supra), it was held that under the circumstances of that case penalty under section 271(1)(c) was applicable even though assessee had filed revised return and in the case of CIT v. Badridass Ram Rai Shop (1939) 7 ITR 613 (Nag), the issue was whether the Income Tax Officer was justified in estimating the income of the assessee by rejecting his return as well as revised return. The learned Commissioner (Appeals) finally observed that the decision under section 80HHC should have not been allowed to the assessee, as the provisions of section 80HHC provides that the deduction can be allowed to the assessee if foreign exchange was brought to India within six months of the end of the accounting year or within the time already allowed by the Chief Commissioner/Commissioner on an application filed by assessee. In the present case, no application was made by the assessee, i.e., M/s Black Jaguar. In fact, the individual Smt. Paramjit Kaur had already disposed of her foreign sundery debtors when she disposed of her proprietary business to the partnership firm. Thus, the assessee not only failed to apply for extension of time as provided under section 80HHC of the Income Tax Act but also disposed of her claim on the foreign realisation by disposing of the same which diverted to a partnership firm and thus the assessee did not fulfil the requirements under section 80HHC. Accordingly disallowance of claim of deduction under section 80HHC was upheld.
7. Being aggrieved, the assessee is in appeal. The learned authorised representative reiterated the arguments placed before the authorities below and also submitted that the assessee was carrying on the business in the capacity of proprietor of the firm M/s Black Jaguar upto 30-9-1991, and it was only from 1-10-1991, her son Shri Aman Shoor was introduced as a partner in her business and the business was continued to be carried on in a partnership under the same name and style of M/s Black Jaguar. The export was made by the assessee in the capacity of proprietor, vide invoice No. BJ/Exp/29/91 dated 8-6-1991, amounting to Rs. 4,07,798. The documents were sent through Bank of Baroda, B.M.M. Jalandhar Branch, vide letter No. BR/7/953, dated 8-7-1991 (copy of record) and foreign remittance as collected by Bank of Baroda, G.T. Road, Jalandhar Bench on 31-10-1993. The learned authorised representative admitted that the exemption under section 10B was wrongly claimed under the bona fide belief that being engaged in the business of hundred per cent export oriented undertaking, the assessee was entitled to exemption under section 10B of the Income Tax Act. However, on subsequently, when the assessee came to know that in order to entitle her for exemption under section 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 section 139(5) on 30-3-1994, was filed which was well within the stipulated time prescribed under section 139(6) and the said revised return was accompanied by the audit report under section 80HHC dated 10-1-1994. 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 31-3-1993. However, the assessee Smt. Paramjit Kaur during the course of the assessment proceedings in her case, moved an application under section 80HHC(2)(a) to the learned Commissioner, Jalandhar, on 25-3-1994, 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 10-7-1991, proceeds of which had not been received within six months from the end of previous year i.e., 1991-92 relevant to the assessment year 1992-93, but instead had been realised on 31-3-1993. The said delay was retrospectively condoned by the learned Commissioner, Jalandhar upto 31-3-1993, vide his office letter, dated 1st/3-6-1994. It was further argued that the learned Commissioner (Appeals) while disallowing the claim of the assessee towards deduction under section 80HHC held that in the instant case no application made by the assessee i.e., Smt. Paramjit Kaur for getting the extension, but instead assumed that the application was made by the partnership firm M/s Black Jaguar on 25-3-1994, to the Commissioner and the extension was granted to the partnership firm M/s Black Jaguar, 7.1. The learned authorised representative further argued that the Commissioner (Appeals) had failed to appreciate that though the said business of manufacturing and export of hand tools was carried on by the partnership firm for the period 1-10-1991, to 31-3-1992, relevant to the aforesaid year under consideration, under the name and style of M/s Black Jaguar, but it escaped his mind that the assessee, Smt. Paramjit Kaur was carrying on the said business of manufacturing and export of hand tools as a sole proprietor for the prior period i.e., 1-4-1991, to 30-9-1991, relevant to the aforesaid year under consideration, under the same name and style of M/s Black Jaguar and the said export had taken place vide invoice, dated 8-6-1991, when she carried on the business as a sole proprietor.
7.2. The learned authorised representative further argued that in the instant case, the sale proceeds of Rs. 4,07,798 pertaining to export carried out by the assessee as a sole proprietor to USA was duly realised as on 31-3-1993, to which retrospective extension had duly been allowed by the Commissioner, Jalandhar. Vide his office letter dated Ist/3-6-1994, in response to the application under section 80HHC(2)(a) filed by the assessee, Smt. Paramjit Kaur as on 25-3-1994, i.e., during the course of her assessment proceedings. The learned authorised representative brought our attention towards p. 6 of the assessment order under section 143(3) wherein the assessing officer stated that the assessee moved to Commissioner under section 80HHC(2)(a) on 25-3-1994", He, therefore, stressed, that the assessing officer in the assessment order accepted that the application for extension under section 80HHC(2)(a) was moved by the assessee, Smt. Paramjit Kaur. The learned authorised representative further brought our attention towards the application moved by the assessee to the Commissioner, Jalandhar, for granting extension of time under section 80HHC(2)(a) which is reproduced below :
"Subject : Application under section 80HHC(2)(a).
Dear Sir, I. The firm had exported goods to USA and the documents were negotiated through Bank of Baroda, G.T. Road, Jalandhar City, on 10-7-1991, and the proceeds of the documents were realised on 31-3-1993.
2. Assessment of the firm for the claim of deduction under section 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 persual and consideration to arrive at a logical conclusion in this regards.,
(a) A copy of the Invoice No. BJ/Exp/29/91 dated 8-6-1991, for Rs. 4,07,798 US $ 15,792.
(b) Bill of lading No. HOLU-0108 DEL NY015 dated 14-6-1991.
(c) A letter dated 31-12-1991, 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 of the letter from Bank of Baroda, Jalandhar, dated 8-7-1991. Sending documents for collection.
(e) A copy of letter dated 25-7-1991, from Midlantic National Bank, B.J. (USA) acknowledging our documents for collection.
(f) A copy of the credit advise dated 31-3-1993, from Bank of Baroda, Jalandhar, regarding realisation of US # 15,792.
The assessee prayes for an early condonation of the delay.
Thanking you, Yours faithfully, Sd/-
For Black Jaguar, Paramjit Kaur Assessee. "
7.3. The learned authorised representative pointed out that the application for condonation of delay pertains to the export bill of Rs. 4,07,798, which export had been carried out by the assessee Smt. Paramjit Kaur, during the period when she was a sole proprietor of M/s Black Jaguar. Furthermore, the terminology the firm is to be construed as the then Proprietary firm M/s Black Jaguar, of which Smt. Paramjit Kaur was the sold proprietor. The learned authorised representative further stated that it is difficult to understand that what stretch of mind the learned Commissioner (Appeals) could have ever imagined that the application under section 80HHC(2)(a) for condonation of delay in respect of foreign exchange was not filed by the assessee Smt. Paramjit Kaur and the said condonation of delay was not allowed by the assessee, Smt. Paramjit Kaur, who had carried out the relevant export and had applied for the condonation. The presumptions/assumptions on which the learned Commissioner (Appeals) had taken recourse to while disallowing the assessees claim for deduction under section 80HHC are baseless and have no legs to stand upon.
The learned authorised representative relied on the judgment of the Honble Punjab & Haryana High Court in the case of Mayor & Co. v. CIT & Anr (2001) 166 CTR 114 (P&H) wherein while discussing the powers of the Chief Commissioner/Commissioner in granting extension on an application filed under section 80HHC(2)(a), it was held that :
"For exercise this power the Chief Commissioner or Commissioner, as the case may be, has to record reasons in writing. This means that the power vested in the competent authority to grant extension of time, which necessarily includes the power to refuse extension of time beyond the period of six months, is quasi judicial in nature. The statutory embodiment of the requirement of recording reasons in writing is clearly indicative of the legislatures intention that the power vested in the Chief Commissioner/Commissioner 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 30-9-1991, co-relating to which credit has been given in her capital account with the partnership firm M/s Block Jaguar as on 1-10-1991, 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 section 88 of the Indian Trusts Act, which states as under :
"Where a trustee, executor, partner, agent director of a company, legal adviser, or other person bound in a fiduciary character to protect the interests of another person by availing himself of his character, gains for himself any pecuniary advantage, or where any person so bound enters into any dealings under circumstances in which his own interests are, or may be, adverse to those to such other persons and thereby gains for himself a pecuniary advantage, he must hold for such other person the advantage so gained."
It was pointed out that the said methodology of conversion of a proprietary firm into a partnership firm is in totality as per principles of book keeping followed in double entry method of accountancy, and as per and within the circumvent of law. There is no other method by which a proprietary firm can be converted into a partnership, other than the method adopted by the assessee. The learned authorised representative further argued that the learned Commissioner (Appeals) failed to appreciate that, the satisfaction of the Commissioner, acting upon an application under section 80HHC(2)(a), once arrived at could not be challenged for scrutiny in the proceedings like that of an appellate Court. In this regard, reliance was placed on the judgment of the Honble Allahabad High Court in the case of Leather Trends (P) Ltd. v. CIT (1995) 128 CTR (All) 453 : (1995) 215 ITR 690 (All) wherein their lordships observed as under :
"There is no difficulty to uphold the reasoning of the Commissioner to the extent it records that the relief is not to be granted in respect of the amount received at any time. However, this has to be examined on the basis of the facts of each case. Under clause (a) where the Commissioner is satisfied that the assessee, for reasons which are beyond his control could not receive the sale proceeds of such goods or merchandise in convertible foreign exchange within the period of six months from the end of the previous year. Of course, the burden is on the assessee to show that he could not receive such amount within the aforesaid period and delay was on account of facts which were beyond his control."
The learned authorised representative further emphasised that the partnership firm M/s Black Jaguar had not carried out any export during the period 1-10-1991, to 31-3-1992, for which payment had not been received within the stipulated period under section 80HHC(2)(a), and therein had never filed any application for extension or condonation of delay of receipt of foreign exchange. However, the learned Commissioner (Appeals) had confused the application filed by Smt. Paramjit Kaur proprietor of M/s Black Jaguar on 25-3-1994, as that of partnership firm, but what is very strange and rather beyond imagination is that how could deduction under section 80HHC be allowed by the learned Commissioner (Appeals) to a person who had not carried out co-relating export, Rather it appears that the learned Commissioner (Appeals) 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 section 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 Commissioner (Appeals) can rather be briefed as : "Heads I win, tails you lose". The learned authorised representative finally stated that the assessee Smt. Paramjit Kaur had duly satisfied all the requisite conditions for making the claim under section 80HHC which had been elaborately discussed. Thus, keeping in view the very facts of the case of the assessee, the claim of the said deduction under section 80HHC should not be disallowed merely on surmises and conjectures, and it was prayed that the claim of the assessee towards the deduction under section 80HHC be allowed.
7.5. The learned authorised representative also relied on the decision of the Honble Madras High Court in the case of Sarathy Palayacat Company v. Chief CIT & Ors. (2001) 167 CTR (Mad) 462 : (2001) 248 ITR 484 (Mad).
8. In his rival submissions, the learned Departmental Representative strongly supported the orders of the authorities below and also submitted that the application dated 25-3-1994, was made by the partnership firm M/s Black Jaguar as the Permanent Account No. PAN-29-603-FP-2096 mentioned therein pertains to the partnership firm and not to the individual Smt. Paramjit Kaur. It was further submitted that foreign exchange was not brought to India within six months and all the asset, and liabilities of the proprietor Smt. Paramjit Kaur were taken over by the firm M/s Black Jaguar w.e.f. 1-10-1991, so the foreign exchange realised on 31-3-1993, belongs to the partnership firm and not to the assessee, hence, the learned Commissioner (Appeals) was justified in upholding the order of the assessing officer in not allowing the claim under section 80HHC.
9. We have heard both the parties at length and also gone through the material available on the records. In the instant case, it appears that the dispute relates to the realisation of the foreign exchange. The claim of the assessee is that the export was carried out by her in individual capacity because there was no partnership firm at that time. It is undisputed fact that the export was carried out vide invoice No. BJ/Exp/29/91, dated 8-6-1991, and the partnership firm came into existence with effect from 1-10-1991, which supports the contention of the assessee that the export was carried out by the assessee in the individual capacity as a proprietor of the firm M/s Black Jaguar. As far as the extension of time under section 80HHC(2)(a) is concerned, the extension upto 31-3-1993, is not disputed by the learned Departmental Representative, The only dispute is that the assessing officer was of the view that extension was granted to the partnership firm and not to the individual. On perusing the contents of the application dated 25-3-1994, under section 80HHC(2)(a) it is noticed that the extension was sought in Bill of leding No. HOLU-0108DELNY015, dated 14-6-1991, pertaining to the invoice No. BJ/Exp/29/91, dated 8-6-1991, 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 section 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 dated 25-3-1994, was of the partnership firm M/s Jaguar and not of the assessee Smt. Paramjit Kaur, when all the particulars mentioned in the said application clearly show that the extension of time was sought for the export which was carried on 8-6-1991, by Smt. Paramjit Kaur, the assessee.
Considering the entire facts discussed hereinabove, we are of the view that the goods were exported in the name of M/S Black Jaguar by the assessee Smt. Paramjit Kaur being the proprietor of the said firm and the extension of time was sought for this transaction pertaining to the export vide Invoice No. BJ/Exp/29-91, dated 8-6-1991, amounting to Rs. 4,07,798. It is also true that on the date of export i.e., 8-6-1991, the partnership firm M/s Black Jaguar was not in existence. So the question does not arise that the partnership firm made the export and if there is no export, there was no need for applying condonation of the delay for the receipt of the foreign exchange. In the light of the above discussions and considering the totality of the facts and circumstances of the present case, we are of the view that the assessing officer was not right in not entertaining the claim of the assessee and subsequently, the learned Commissioner (Appeals) was not justified in upholding the findings of the assessing officer.
In view of the above, we set aside the order of the learned Commissioner (Appeals) and direct the assessing officer to allow the claim of the assessee.
10. As far as the additional ground pertaining to the charging of interest under section 234B is concerned, the learned authorised representative argued that nothing was mentioned for chargeability of interest under section 234B in the assessment order under section 143(3), and even the demand notice under section 156 is silent as regards chargeability of interest under section 234B is concerned. The learned authorised representative brought our attention towards page Nos. 27 to 34 & 35 of his paper book which are copies of the assessment order and demand notice respectively. He further emphasised that in the assessment orders as well as demand notice, the assessing officer did not mention charging of the interest under sections 234A and 234B which can be charged only after passing the specified order. The reliance was placed on the following judgments :
(1) CIT & Ors. v. Ranchi Club Ltd. (2000) 164 CTR (SC) 200;
(2) Smt. Tej Kumari v. CIT & Ors. (2000) 164 CTR (Pat)(FB) 201;
(3) Dy. CIT v. Amir Morani (2000) 70 TTJ (Mumbai) 950; and (4) Multi Chemicals v. Assistant Commissioner (2001) 73 TTJ (Del) 124 : (2001) 76 ITD 367 (Del).
10.1. After hearing both the parties and perusing the assessment order under section 143(3) and demand notice under section 156, it is noticed that the assessing officer did not pass specific order as far as charging of interest under sections 234A and 234B is concerned. The assessing officer 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 section 271(1)(c) have separately been initiated. Assessed. Issue demand notice and challan.
In the notice dated 27-3-1995, placed at pp. 35 and 36 of the paper book, it is mentioned as under :
"This is to give you notice that for the assessment year 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 assessing officer.
From the facts discussed above, it is crystal clear that the assessing officer had not mentioned charging of the interest under sections 234A and 234B in the assessment order as well as in the demand notice.
The Honble Supreme Court in the case of CIT & Ors. v. Ranchi Club Ltd. (supra) held that "in the absence of any specific mention of the assessing authority in the assessment order charging interest under sections 234A and 234B no interest could be recovered from the assessee merely by way of demand notice." In the case of Smt Tej Kumari v. CIT & Ors. (supra) of the Honble Patna High Court held that "in the absence of any specific mention of the assessing authority in the assessment order charging interest under sections 234A and 234B no interest could be recovered from the assessee by way of demand notice. "
In the case of Dy. CIT v. Amir Morani (supra) it was held by the Tribunal (Mumbai Bench) that "if there is no order in the assessment order levying interest under sections 234A and 234B interest cannot be levied through notice of demand." Similarly, in the case of Multi Chemicals v. Assistant Commissioner (supra), the Tribunal Delhi Bench "D" held as under :
"As to the second point, there was no dispute that direction for charge of interest under a specific section had to be given by the assessing officer. If he failed to do so, no interest could be charged. In the instant case, in his order the assessing officer had mentioned charge interest as per rules. The Patna High Court in the case of Uday Mistanna Bhandar & Complex v. CIT (1997) 137 CTR (Pat) 376 : (1996) 222 ITR 44 (Pat) : (1997) 90 Taxman 500 held that such direction was not valid for charging interest under section 234A/234B because the same was not specifically mentioned in the assessment order. This was the only decision available on this issue. Following the same, in the instant case, the assessing officer was not justified in charging interest under section 234A/234B in the absence of specific directions for charging interest under the above sections. Accordingly, the interest charged by the assessing officer was to be deleted."
Considering the entire facts of the case and by keeping in view the ratio laid down by various Courts as discussed in the aforesaid cases, we are of the view that the assessing officer was not justified in charging the interest under section 234A/234B when nothing was mentioned in the assessment order regarding chargeability of the interest. In view of that interest charged by the assessing officer is deleted.
11. In the result, the appeal of the assessee is allowed.