Satish Chandra, C.J. - (1.) THE petitioner is an assessee. He carries on exclusively export trade. For the assessment years 1969-70 and 1970-71, the assessee forgot to make a claim under Section 35B of the I.T. Act, 1961, for export markets development allowance. No claim for this allowance was made in the return filed by the assessee for either of the two years. In due course, the ITO completed the assessments. THE assessee felt aggrieved and filed an appeal. THE same was disposed of by the AAC. Still aggrieved, he went up to the Tribunal, Before the Tribunal one of the pleas raised on behalf of the assessee was that the ITO was in error in not allowing the export markets development allowance. THE Tribunal repelled this plea on the ground that it does not arise out of the orders passed by the authorities below. It, however, added that if so advised, the assessee could move the authorities by way of rectification and the ITO will do the needful in accordance with law. It appears that an application for rectification was made before the ITO even while the appeal was pending before the Tribunal. THE ITO granted it in part. THE assessee then made another application specifically complaining about the non-grant of this allowance in relation to some other items of expenditure. That application was dismissed. THE assessee then went up to the Commissioner in revision, which failed. That is how he has come to this court under Article 226 of the Constitution.
(2.) THE Commissioner dismissed the revisions on the ground that the assessee had not made any claim for the export markets development allowance during the pendency of the assessment proceedings. THE ITO was hence justified in refusing to rectify the assessment order. In this situation, s. 154 was not attracted because there was no error apparent on the face of the record. Mr. S. P. Gupta, appearing for the assessee-petitioner, submits that the assessee had placed all the basic facts on which the export markets development allowance was in law allowable under Section 35B. The ITO was, in law, duty bound to allow it notwithstanding that the assessee had not made any specific claim in the returns filed by it. We are unable to agree. Section 35B entitles an assessee to the deduction equal to the export markets development allowance provided several of the conditions mentioned in it arc satisfied. The assessee has to be a domestic company resident in India. The allowance is grantable if it is incurred after 29th February, 1968, on any type of expenditure referred to in Clause (b) of Sub-section (1). Then the allowance is grantable subject to the provisions of this Section. Section 35B includes Sub-section (2), which provides: "(2) Where a deduction under this section is qclaimed and allowed for any assessment year in respect of any expenditure referred to in Sub-section (1), deduction shall not be allowed in respect of such expenditure under any other provision of this Act for the same or any other assessment year."
(3.) SUB-s. (2) specifically speaks of a deduction under Section 35B being claimed and allowed. Obviously, there is no implication that the ITO is under a duty to allow the deduction even where it has not been claimed. The language of SUB-section (1) also corroborates this interpretation. It says : "35B. (1)(a) Where an assessee, being a domestic company or a person (other than a company) who is resident in India, has incurred after the 29th day of February, 1968, whether directly or in association with any other person, any expenditure (not being in the nature of capital expenditure or personal expenses of the assessee) referred to in Clause (b), he shall, subject to the provisions of this section, be allowed a deduction of a sum equal to one and one-third times the amount of such expenditure incurred during the previous year." The language is "he shall, subject to the provisions of this section, be allowed a deduction". Reading the two together it is obvious that a deduction under this section is allowable only when it has been claimed.;