M.A. Bakhshi, Judicial Member - (1.) APPELLANT is an individual engaged in the manufacture and export of garments. For assessment year 1988-89 for which the previous year ended on 31-3-1988, assessee filed a return on 19-10-1989 disclosing income at Rs. 18,234. Deduction under Section 80HHC had been claimed at Rs. 1,11,580 which was denied by the Assessing Officer only on the ground that a certificate from an Accountant as defined in Explanation to Sub-section (2) of Section 288 certifying that the deduction had been correctly claimed on the basis of amount of net foreign exchange realisation etc. had not been filed along with the return of income. CIT (Appeals) also confirmed the disallowance by relying upon Sub-section (4) to Section 80HHC by virtue of which assessee is required to furnish the certificate along with the return. Assessee's claim is that the certificate had not been filed along with the return due to an oversight but the same had been furnished during the course of assessment proceedings on 8-3-1991 along with the Auditor's report. When Assessing Officer made the assessment, the required certificate was available with the Assessing Officer and as such it is urged that deduction under Section 80HHC may not be denied to the assessee for a mere technical breach.
(2.) The learned Departmental Representative, on the other hand, contended that Assessing Officer has no discretion in the matter of allowance of deduction under Section 80HHC. According to Mr. Singh, as per Subsection (4) of Section 80HHC, deduction is permissible only if a certificate from an Accountant is filed along with the return of income. Assessee having failed to file the certificate along with the return of income, deduction has rightly been denied. We have given our careful consideration to the rival contentions. Section 80HHC provides for a deduction in computing the total income of the assessee from the export of goods or merchandise in the case of assessee resident in India and engaged in the business of export out of India of any goods or merchandise to which the said section applies in accordance with and subject to the provisions of that section. Apart from the other conditions to be satisfied under Section 80HHC, Sub-section (4) of Section 80HHC provides that a deduction under Sub-section (1) of Section 80HHC shall not be admissible unless the assessee furnishes, in the prescribed form, along with the return of income, report of an Accountant, as defined in the Explanation below Sub-section (2) of Section 288 certifying that the deduction has been correctly claimed in accordance with the provisions of that section.
(3.) WE hereunder reproduce relevant portion of Section 80HHC :-- 80HHC. Deduction in respect of profits retained for export business.-- (1) Where an assessee, being an Indian company or a person (other than a company) resident in India, is engaged in the business of export out of India of any goods or merchandise to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of the (profits) derived by the assessee from the export of such goods or merchandise: Provided-- JUDGEMENT_2573_TLIT0_19920.htm (4) The deduction under Sub-section (1) shall not be admissible unless the assessee furnishes in the prescribed form, along with the return of income, the report of an accountant, as defined in the Explanation below Sub-section (2) of Section 288, certifying that the deduction has been correctly claimed on the basis of the amount of (export turnover). ***** JUDGEMENT_2573_TLIT0_19921.htm ;