Deduction under 80HHC – Cascading effect of amendment in other statutes
The Income Tax Department has encountered a strange problem. As per Section 80HHC certain deductions are allowed on income earned from profits from exports. The Section mentions the Customs and Central Excise Duty Drawback Rules, 1971. But these rules have been replaced by the Customs and Central Excise Duty Drawback Rules, 1995. Now there are some smart officers who wanted to deny the benefit of 80HHC on the ground that there is no Duty Drawback Rules, 1971.
Now the CBDT has clarified that by virtue of the General Clauses Act, the benefits of Section 80HHC cannot be denied just because the Section mentions the 1971 Rules and not the 1995 rules.
This is what happens with too many enactments finding place in too many other acts and too many amendments with no clue as to what is mentioned where.
CBDT Circular No. 5/2006, dated May 15, 2006