TaxTMI 
TaxTMI 
2014 (5) TMI 710
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....s made in rectification proceedings in respect of the same assessee/petitioners for the years 2004-05 and 2005-06. 2. All these proceedings pertain to common questions and issues, i.e., "as to whether the penalty imposed by the Revenue by invoking the Section 271 (1) (c) was warranted in the circumstances of the case". 3. The uncontroverted facts are that the assessee/appellant had claimed for AY 2004-05, 2005-06 and 2006-07 exemption under Section 10B of the Income Tax Act. He refers, for this purpose, to the manufacturing of engineering products which were in turn exported. The assessee had premised its claim for exemption under Section 10B on the basis that the invoices to the foreign purchaser were issued jointly by itself and an ....
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....,37,580/- has not been set aside or quashed in appellate proceedings. The assessment order was passed on 26th December, 2007. As the said order was not challenged/questioned, though appeal/revision was maintainable, we do not think it will be proper and appropriate to examine the merits of the said order in this writ petition. Penalty for concealment under Section 271(1)(c) of the Act for the Assessment Year 2005-06 has been affirmed by the tribunal vide order dated 20th November, 2009. The petitioner herein has now preferred an appeal against the said order along with an application for condonation of delay. The appeal and the said application will be considered and decided on merits. The petitioner in the present writ petition has impu....
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....ought not to have invoked the penalty proceedings. It was submitted that a bare reading of the relevant proceedings of the exim policy issued and made applicable at all relevant times clarifies that exports through certain parties or sale/purchase transactions made with domestic parties would be deemed to be exports. Learned counsel relies upon paragraph 6.2B (page 131 of ITA 1219/2009) and paragraph 6.12A (page 140 of ITA 1219/2009) and certain other Circulars to say that such transactions are covered within expression "deemed exports" and that the benefit of Section 10B could have been claimed. Counsel also relies upon certain other Circulars issued by the Ministry of Commerce, Department of Foreign Trade as well as EHTP authorities, and ....
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....export of such articles or things or computer software:] Provided also that no deduction under this section shall be allowed to any undertaking for the assessment year beginning on the 1st day of April, [2012] and subsequent years : [Provided also that no deduction under this section shall be allowed to an assessee who does not furnish a return of his income on or before the due date specified under sub-section (1) of section 139.] (2) This section applies to any undertaking which fulfils all the following conditions, namely :- (i) it manufactures or produces any articles or things or computer software; (ii) it is not formed by the splitting up, or the reconstruction, of a business already in existence : Provided that this....
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....with any bank outside India with the approval of the Reserve Bank of India." 8. Facially, it is apparent from a reading of Section 10B (3) that the twin conditions of an export out of India and receipt of foreign exchange through remittance are pre-conditions for claiming the benefit of the provision. The Revenue had pointed out that in similar circumstances under Section 80HHC(1A), the transactions of the kind that are involved in the present case are deemed to be exports and entitled to the benefit of that provision. The relevant provision in that regard is as follows: - 80HHC (1A) "Where the assessee, being a supporting manufacturer, has during the previous year, sold goods or merchandise to any Export House or Trading House in res....
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....t, 1961. In other words, sans the reference to the exim policy or a pointed reference to admissibility of such reliefs as are given in that policy, under Section 10B, it would not be open to the assessee to claim that transactions, which are not exports in a strict sense of the term and in which the assessee does not receive foreign exchange remittance, be treated as such. The plain text of Section 10B particularly Section 10 B (3) exclude the possibility of a reasonable argument in this regard. The Revenue is right when it contends that there is some relief to the assessee, to the extent that convertible foreign exchange may be received or brought into India by the assessee. However, that benefit has not been claimed, the existence of such....