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of <h1>Court directs review of 1998 application under section 80HHC, excludes 1994 application.</h1> <h3>Narinder Kumar Arora And Another Versus Commissioner Of Income-Tax</h3> Narinder Kumar Arora And Another Versus Commissioner Of Income-Tax - [2000] 245 ITR 10, 164 CTR 263, 112 TAXMANN 367 Issues:- Claim for deduction under section 80HHC of the Income-tax Act not allowed- Dispute regarding the requirement of making an application for extension of time for claiming deduction under section 80HHC(2)(a) of the Act- Controversy over the application for extension of time made by the petitioner- Rejection of the application for extension of time by the CommissionerAnalysis:The main issue in this case revolves around the petitioner's claim for deduction under section 80HHC of the Income-tax Act, which was not allowed by the competent authority. The petitioner filed a return for the assessment year 1994-95, claiming a deduction under section 80HHC in respect of the export turnover of the company. The dispute arises from whether the petitioner was required to make an application for an extension of time for claiming the deduction and if so, whether it needed to be done before the expiry of the statutory period of six months or could be done subsequently. The petitioner argued that no separate application was required as the Commissioner had the authority to allow the deduction without an application. On the other hand, the Revenue contended that an application was necessary to provide reasons justifying the extension of time for foreign remittance.Regarding the requirement of making an application for extension of time, the provision applicable during the relevant assessment year stated that the Chief Commissioner or Commissioner could allow a further period if satisfied that the assessee was unable to comply within the initial six months due to reasons beyond their control. The Revenue emphasized the need for the assessee to disclose reasons justifying the extension through an application. While the Revenue conceded that the application could be made even after the period of six months, it argued that the application was essential to bring forth the justifying reasons to the Commissioner.The court opined that a party should be able to make the application after the expiry of the six-month period, as the need for such an application typically arises post the expiration of the initial timeframe. There was a dispute regarding an alleged application made by the petitioner on August 4, 1994, which the Revenue denied. However, it was undisputed that the petitioner applied for an extension of time on February 17, 1998, which was rejected solely on the grounds of the alleged non-existent application from 1994. The court found the Commissioner's approach incorrect, stating that the rejection solely based on the absence of the 1994 application was unwarranted. The court directed the Commissioner to decide on the petitioner's 1998 application for extension of time within four weeks, emphasizing that the decision should be based on merit and not on the disputed 1994 application.In conclusion, the court allowed the petition, directing the Commissioner to review the petitioner's 1998 application for extension of time under section 80HHC on its merits, without considering the alleged 1994 application. The court clarified that it was not expressing any opinion on the disputed 1994 application.
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