(1.) These appeals involve substantial questions of law concerning the interpretation of Section 80HHC of the Income Tax Act, 1961 (`Act'), and in particular sub-section (1) read with sub-section (3) and clause (baa) of the Explanation below sub-section (4C) thereto.
(2.) Section 80HHC was first inserted by the Finance Act 1983 with effect from 1.4.1983 and has since undergone several changes. The portions of the provision, as presently found in the Act, relevant to the present batch of cases, read as under:
(3.) The background to the introduction of Section 80HHC with effect from 1.4.1983, has been adverted to in paragraph 42.1 of the CBDT Circular No. 372 dated 8.12.1983 in the following words: "With a view to encouraging a larger export of goods, the Finance Act, 1982 had inserted Section 89A in the Income Tax Act with effect from 1.6.1982 for providing tax relief to Indian companies and non-corporate tax payers resident in India whose exports turnover for a year exceeds the export turnover for the immediately preceding year more than 10% thereof. The Finance Act, 1983, has omitted the aforesaid provision with effect from 1.4.1983. Simultaneously, a new Section 80HHC has been inserted with effect from the same date for providing deduction with reference to export turnover." The subsequent amendments in 1992 by which clause (baa) to the Explanation to Section 80HHC was introduced, were explained in the CBDT Circular No. 621 dated 19.12.1991. Paras 32.5 to 32.7 of this Circular explain the purpose of introduction of the aforementioned Explanation and read as under: