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Judgment
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
Right at the outset, it needs to be mentioned that this is an old appeal where we are facing some difficulty in accessing old records. However, from an earlier order in ITA No.3076/Del/2008 in this very same case, in the first round, an order dated 21.4.2011 is available on record, through which it is noted that there were cross appeals filed by the assessee and the Revenue from the order of CIT(A), Karnal passed on 18.07.2008. Through that order the ITAT had interpreted the case of the assessee in his favour following the decision of the Hon’ble Apex Court in the case of CIT vs. Baby Marine Exports reported in 290 ITR 323. It was held that the assessee, having supplied goods of the value of about Rs.74.16 crores to IKEA as a supporting manufacturer, would be allowed the benefit of section 80HHC of the Income Tax Act, 1961 (hereafter as “the Act”).
This matter travelled to the Hon’ble Punjab & Haryana High Court where again the appeals of Revenue were dismissed following the case of Baby Marine Exports (supra). The Hon’ble Punjab & Haryana High Court held that a supporting manufacturer is at par with the actual direct exporter of goods for the purposes of seeking deductions u/s 80HHC of the Act.
The Revenue carried this matter before the Hon’ble Apex Court whereby through an order dated 27.08.2019 in Civil Appeal No.4590/2018, clubbed with ten other appeals, a decision has been rendered having the following operative portion: -
“6)We agree with the reasoning and analysis of the referring judgment, namely, Baby Marine Exports (supra) dealt with an issue related to the eligibility of export house premium for inclusion in business profit for the purpose of deduction under Section 80HHC of the Act. Whereas in the present appeals, the point for consideration is completely different, being as to whether the assessees being supporting manufacturers, are to be treated on par with the direct exporter for the purpose of deduction of export incentives under Section 80HHC of the Act. We, therefore, answer the question referred to us by stating that Baby Marine Exports (supra) deals with an entirely different question and cannot be relied upon to arrive at the conclusion that the supporting manufacturers are to be treated par with the direct exporter for the purpose of deduction under Section BOHHC of the Act, pointed out by us herein above in C vs. decided has been Consequently, the decision Satish Kumar Gupta (C.A. No. 6437/2012) 12.09.2012 over ruled.
7)This being the case, allow these appeals in favour of the Revenue and set aside the impugned judgment(s). Civil Appeal Nos. 4593, 4594, 4525, 4596, 4597, 4598 and 4599 of 2018.
8)In these appeals also the impugned judgments are set aside. However, it will be open for the respondent in the above cases to show, by adducing the necessary facts, that they are direct exporters as well and can therefore avail of the deduction available under Section 80HHC (1) read with (3). For this purpose, these matters stand remanded to the Appellate Tribunal. Accordingly, these appeals stand disposed of.” [Emphasis added]
The matter before us for consideration is regarding the directions given in para 8 of the Hon’ble Supreme Court’s order (supra). It is seen from the order-sheets maintained in the case records that on 27.08.2025 the power of attorney holder – Shri Ved Jain, the then AR communicated that he has no instruction whatsoever from the client to pursue the matter before the ITAT. Thereafter, through a detailed noting the ITAT Bench had directed to obtain the relevant records for the sake of the present adjudication and also to serve the notice on the assessee for hearing. From a perusal of the records before us, it is seen that no one has been appearing on behalf of the assessee since 20.02.2025. It is felt that there appears to be no worthwhile purpose in keeping this matter pending since the Hon’ble Apex Court has already given specific directions, which need to be factually examined and thereafter an appropriate decision for deduction u/s 80HHC of the Act needs to be given in the case of the assessee.
The Ld. DR took us through the documents available on record and also pointed out that the Hon’ble Apex Court’s decision would require fact finding at the level of Ld. AO to determine whether the assessee is indeed a direct exporter and hence eligible for deduction u/s 80HHC of the Act.
We have considered the totality of facts and circumstances of this case, the documents available on file and have also carefully perused the decision of the Hon’ble Apex Court in this case. Respectfully following the directive in para 8 of the Hon’ble Supreme Court’s order (supra), we remand this matter to the file of Ld. AO for examining whether the assessee is a direct exporter eligible for deduction u/s 80HHC of the Act or not. The Ld. AO would be expected to serve the notices of hearing on the assessee and thereafter examine the issue at length, after affording a reasonable opportunity of being heard.
In the result, this appeal is allowed for statistical purposes.