S. Ratnam Pillai (Decd) vs Commissioner of Income Tax

C.N. Ramachandran Nair J.

The question raised pertains to exemption on export profits claimed u/s 80HHC of the Income Tax Act, 1961.

The appellant exported marine products through export houses and claimed exemption u/s 80HHC of the Income Tax Act. Exemption was disallowed for the year 1990-91 in the course of processing the return u/s 143(1)(a) of the Act. It is contended that the assessment involving disallowance cannot be made u/s 143(1)(a) of the Act. According to the assessee, even if the assessee is ineligible for the claim as eligibility for exemption is a debatable issue; it does not warrant prima facie adjustments u/s 143(1)(a) of the Act. However, standing counsel appearing for the respondents pointed out that the claim was made by the assessee after declaring that exports were through export houses but without producing the disclaimer certificate in Form No. 1OCCAB prescribed under the rules in terms of section 80HHC(4A) of the Income Tax Act. It is contended by counsel for the assessee that the assessees claim was not as exports through export houses but the assessee claimed the benefit as direct exports and even though the required audit report in Form No. 1OCCAC was not filed along with the return, it was filed before completion of assessment. The appellant has also relied on the decision of this court in Commissioner of Income Tax Vs. G. Krishnan Nair, , wherein this court held that audit report in Form No. 1OCCAB can be filed before completion of the assessment even if not filed along with the return. We do not find the decision relied on by the appellant applies to the facts of this case because the appellant admitted in the returns that the exports are through export houses. Therefore, without a disclaimer certificate under Form No. 1OCCAB, which admittedly the appellant never filed, the claim could not have been considered or allowed. The appellant after declaring that the exports are made through export houses, cannot later turn back and say that there is no involvement of export houses and the exports were direct. Therefore, we do not find the contention raised by the appellant can be allowed. It is a mandatory requirement of section 80HHC(4A) that a disclaimer certificate in Form No. 1OCCAB should be filed along with the return and the object of the said provision is to prevent the export houses as well as supporting manufacturers from claiming exemption on the profit of the very same export turnover. The decision of this court above referred to has no application to this case as the appellant never produced the disclaimer certificate in Form No. 1OCCAB of the Act. Therefore, the appeal fails and is dismissed.