Law:

Section:

Section 264, read with section 80HHC, of the Income-tax Act, 1961 - Revision - Of other orders - Assessment years 1995-96 and 1996-97 - Assessee effected export sales during assessment year 1995-96, but received incentives during subsequent assessment year 1996-97 - However, during assessment year 1996-97, assessee did not effect any export sales - Whether since revisional power can be exercised to meet ends of justice, Commissioner should decide issue of law as to whether export incentives received in subsequent assessment year could be allowed under section 80HHC even though not shown as income for relevant year in view of rectification application subsequently filed supported by auditors' report - Held, yes [matter remitted back to Commissioner] FACTS In the return for the assessment year 1995-96, the assessee claimed deduction under section 80HHC which did not include deduction in respect of export incentive receivable, as the asssessee failed to receive the export earnings during the said year. These incentives were received in the assessment year 1996-97, when the assessee claimed deduction. The Assessing Officer disallowed the claim since during the said year there was no export sale. The return was processed under section 143(1)(a). On appeal, the order passed by the Assessing Officer for the assessment year 1996-97 was confirmed. Thereafter, the assessee filed application under section 154 with a specific prayer that the incentive pertained to the assessment year 1995-96 and claim under section 80HHC be granted for that year. The rectification application was rejected by the Assessing Officer. Being aggrieved, the assessee filed a revision petition under section 264, in which he sought relief under section 80HHC on the ground that the export incentives had direct nexus with the export income for the assessment year 1995-96. The said revision application was also dismissed by the Commissioner. On writ petition : HELD Under section 264, the Commissioner may, on an application by the assessee for revision, call for the records of any proceedings and may make such enquiries as he thinks fit. This revisional power can be exercised to meet the ends of…

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