Rajesh Balia, J. - (1.) HEARD learned counsel for the parties.
(2.) THE petitioner challenges the order passed by the Commissioner of Income-tax on September 17, 1999, rejecting the application made by the petitioner under Section 80HHC(2)(a) of the Income-tax Act, 1961, for extending the period to bring the sale proceeds of the goods exported to Riyadh (Saudi Arabia) in foreign currency and deposit it in the bank in terms of the provisions of Section 80HHC to avail of the benefit thereunder in respect of such exports and consequential order, annexure 5, dated September 27, 1999, by which the amount of the export receipts received after six months has been added in the return income of the assessee for the assessment year 1998-99. The facts of the case relevant for the present purposes are that the petitioner exported goods to Al-ajilal Co. Ltd., on January 16, 1998, vide invoice No. 26 for US $ 4075.5 convertible into Indian currency for Rs. 1,52,831 and to Alfalwa on September 29, 1998, vide invoice No. 31 for US $ 9496.76 convertible into Indian currency at Rs. 3,51,380 totalling in Indian currency at Rs. 5,04,211. The question relates to non-receipt of the aforesaid amount in India within six months from the end of the financial year to which the export related and the petitioner moved an application for extension of time. The petitioner, in the first instance, made an application on September 29, 1998, stating that the importer made complaints for the goods exported as regards colour, spots and quality and retained the payments, the assessee made tremendous efforts to recover the amount in time by giving various fax messages and on telephone even offered discount in rates to the importers but the same were unresponded and they delayed in sending the payments. It was also pointed out in the application that party No. 1, Al-ajilal Co. Ltd., did make payment of two containers in July, 1998, out of three containers despatched but party No, 2, Alfalwa, to whom only one container was supplied, never replied to the letters of the assessee. The petitioner further made a request that the dispute cannot be overcome without visiting Riyadh and inspection of material and, therefore, requested to send visa but both the importers did not respond to the request. In these circumstances, the petitioner pleaded that the assessee is completely unable to bring the sale proceeds of the export till the matter is settled which is possible only by his personal visit to Riyadh. He, therefore, requested for extension of period for bringing the due sale proceeds to India until December 31, 1998. Along with this application, the copies of the fax messages, application for permission to extend the period by the Reserve Bank of India and the reminder letters issued, were also enclosed. Those documents in total accounted for 18 documents. However, this application remained pending and was not disposed of before December 31, 1998. The assessee made another application for extension of period beyond December 31, 1998, on December 31, 1998 up to March 31, 1999. This followed with another application dated January 4/February 8, 1999, which was received in the office of the Commissioner of Income-tax, Udaipur, on February 8, 1999. In this case, the petitioner further made out apart from the reasons earlier stated in his application that a business visit to UAE countries by an Indian national requires a no objection certificate through a sponsor in the UAE who in turn must submit the passport details to the Immigration Directorate who issues the "no-objection certificate" and on that basis the embassy issued the visa which is endorsed on arrival of the person at the point of entry. The assessee had persuaded through regular correspondence and telephonic talks, and at last got one party to agree to send the visa but that also could not come before the closing of the Ramzan month and ultimately Al-ajilal Co. Ltd., sent the visa dated December 23, 1998. A copy of the visa and fax message was also enclosed with the application. These reasons were made in support of the application for further extending the period up to March 31, 1999, for bringing the disputed amount in India for the purpose of availing of the benefit under Section 80HHC. This application also remained undisposed of until March 31, 1999. On March 31, 1999, the petitioner informed the Commissioner of Income-tax that the assessee had made an application on September 29, 1998, and December 31, 1998, for extending the period to bring foreign currency in India up to March 31, 1999, and that the due foreign currency of 4075 and 9497 dollars has been received on March 14, 1999, and the same has been deposited in the bank on March 30, 1999. In support of this application, a copy of the draft and bank deposit slips were also annexed. In furtherance of this and in response to the information required by the Commissioner, the petitioner further submitted a detailed explanation, vide his letter dated June 27, 1999, in this case making reference to the earlier applications. The efforts made by the petitioner, the essential requirement of obtaining a visa before entering the territory of the UAE for the purpose of a business visit thereto and the ultimate results of the petitioner's efforts which resulted in visa permission on December 3, 1998, and the visit ultimately fructified only in March, 1999. It was specifically stated in the application that the visa enquiry was completed in the month of January/February, 1999, and, thereafter, the petitioner was accorded permission to visit Riyadh. The assessee visited the UAE in March which was evidenced by the boarding pass of the concerned airlines and that on personal visit the dispute was resolved and the amounf was brought into India as aforesaid, after all. This material had already come on record, the Commissioner, vide the impugned order, annexure 3, rejected the aforesaid applications by holding that the delay which occurred is not on account of the reasons beyond the control of the assessee, the assessee evaded to respond to the complaints of the importer within a reasonable time for which six months time was sufficient as provided under Section 80HHC(2)(a) of the Act. Coming to this conclusion, the focal point of the reason given by the Commissioner is that as per the petitioner's own assertion the importer had immediately informed the assessee on receipt of the containers about the discrepancy in the quality of the material sent with the selected or approved samples and made a compliant that this will lead them to apply huge discount for making it acceptable to their clients and they demanded how the petitioner can compensate at least for part of such losses. With this complaint, the Commissioner jumps to the conclusion that no evidence has been placed before him to show that the assessee took immediate steps to settle the dispute instead repeated requests were made for payments. From a perusal of the three applications and the order under challenge, the order in question is singularly silent about the repeated pleas made by the assessee that he having made efforts could realise part of the amount before making the application on September 29, 1998, in respect of two containers from one of the consignees but he could not realise the foreign currency through correspondence and negotiations directly on phones and that it needed a personal visit to Riyadh for settling the dispute by negotiating face to face. He has nowhere admitted that the goods sent by him were not of the specified quality or that he sent goods qualitatively different from the approved samples. He has also made specific ground in the application about the difficulties involved in visiting the country of import, viz., Saudi Arabia, which provides specific procedure for obtaining migration visa through a sponsor from the UAE alone and since the response to sponsor the petitioner only came in the month of December, 1998, he could not visit that country for a personal visit and settle the dispute. He also made it clear that no sooner than the sponsor was there, he initiated the proceedings for obtaining the visa which could only come to him in February, 1999. It cannot be said that the time taken in giving permission after holding enquiry by the competent authority were dependent on any volition on the part of the petitioner. It was totally dependent on the third party's efforts and the decision-making authority over which the petitioner had no control. He has visited the importers soon after getting the visa and got the quarrels settled. He visited the UAE in March and in fact obtained the payment and brought it into India and deposited it in the bank before March 31, 1999.
(3.) ALL these facts have been blissfully ignored by the Commissioner by focussing on the complaint lodged by an importer about the quality of the goods despatched by the petitioner. It is not even the finding of the Commissioner that the goods sent by the petitioner were really not of the specifications nor could he have reached this finding. If it is admitted that the dispute has arisen between the parties, it is not expected or presumed that the complaint made by the buyer is necessarily right or genuine. One cannot start with the presumption that the Indian exporter is always wrong, which impression is betrayed by the order of the Commissioner of Income-tax on jumping to the conclusion that on raising the dispute the petitioner ought to have immediately settled the dispute as if he had no right to dispute the allegations made in the complaint or convince the buyer about the quality of goods despatched by him. It is natural in these circumstances that some time does take place before the parties could reach an amicable settlement by negotiation or get the dispute settled through the appropriate remedial forum. Which turn events ultimately take is anybody's guess, Nor can one predict that if the party did not take recourse to legal remedies immediately he is not acting with prompt despatch and commercial expediency. In such international trade and commerce, the recovery when such dispute arises is not easy at hand which could be solved immediately. Judicial notice of the fact can be taken that a visit from one country to another country particularly in the middle-East countries is not free passage and one has to undergo required procedure before entering the other country. About the procedure for obtaining the visa and entering the country in question, the petitioner had laid before the authority, the entire procedure required for such entry which is not found to be erroneous. One fails to understand if for settling the dispute , correspondence has failed, the petitioner has only to resort to personal visit for it. For fructifying that personal visit he was dependent on finding the sponsor and the sponsor having agreed only in the month of December, 1998, he had lost no time in pursuing the matter to visit the country of import and settle the dispute and bring the amount into India. Therefore, non-application of mind to the relevant material which was before the Commissioner is writ large. However, it is contended by learned counsel for the Revenue that the court ought not to look for the reasons and insist on finding the material that existed to support those reasons because reasons were not required to be given for rejection of the application for extension of time by the application under Section 80HHC(2). The reasons were required to be recorded in writing only in case the time is extended and as the rejection of the application was in the absolute discretion of the Commissioner, the order of rejection is not amenable to judicial review ordinarily. I am unable to accept this contention. Sub-section (2)(a) of Section 80HHC reads as under : "(2)(a) This section applies to all goods or merchandise, other than those specified in Clause (b), if the sale proceeds of such goods or merchandise exported out of India are received in, or brought into, India by the assessee other than the supporting manufacturer in convertible foreign exchange, within a period of six months from the end of the previous year or, where the Chief Commissioner or Commissioner is satisfied (for reasons to be recorded in writing) that the assessee is, for reasons beyond his control, unable to do so within the said period of six months, within such further period as the Chief Commissioner or Commissioner may allow in this behalf." ;