C.N. Ramachandran Nair, J.

The respondent-assessee is an industrial unit engaged in manufacture and export of high intensity discharge lamp, igniters, luminaries, control gears etc. located in the Cochin Special Economic Zone. Being an export unit within the Special Economic Zone, assessee is entitled to income tax exemption under Section 10A of the Income Tax Act on the profit earned on the export of goods received in convertible foreign exchange for a period often years. The assessee was in fact granted exemption on profit on export of goods received in convertible foreign exchange for the assessment years 2003-2004 and 2004-2005. However, during these two years, the assessee had made sale of components to another industrial unit in the Madras Special Economic Zone for which assessee received payments in Indian rupee. Besides claiming exemption on export profits on the actual exports, assessee also claimed exemption on the profits derived on the sale of components made to the industrial unit at MSEZ for both the years. For the year 2003-2004, the Assessing Officer besides allowing exemption on profits derived on export, also allowed exemption on the profits derived on sale of components made by the assessee to the industrial unit at Madras against payment received in Indian rupees, which was reversed by the Commissioner of Income Tax in exercise of suo moto revisional powers under Section 263 of the Income Tax Act because of the restriction contained in Section 10A(3) of the Act, which limits exemption on export profits only on the profits derived on actual export made against receipt of convertible foreign exchange. For the assessment year 2004-2005, the Assessing Officer allowed assessee's claim of exemption only on the profits derived on actual exports and disallowed the claim made for sale of components to the industrial unit at MSEZ. The first appellate authority confirmed the disallowance for the year 2004-2005. The assessee challenged the order issued by the Commissioner under Section 263 for the year 2003-2004 and the first appellate order for the year 2004-2005 before the Tribunal contending that sale of components to the industrial unit at MSEZ is a deemed export under the provisions of the Special Economic Zones Act, 2005, and so much so, assessee is entitled to exemption under Section 10A not only on the profits derived on actual exports, but on sale of components to another industrial unit in the MSEZ for manufacture of final products by that unit for export The Tribunal held that convertible foreign exchange referred to in Section 10A(3) should enjoy a liberal construction covering probably Indian rupees received as well from an Indian buyer and accordingly they allowed the appeals, against which these appeals are filed by the Revenue under Section 260A of the Income Tax Act. We have heard Senior counsel Sri. P.K.R. Menon appearing for the Revenue and Senior counsel Sri. A.K. Ganguly appearing for the respondent-assessee.

2. Before proceeding to consider the case on merits, what we notice from the Tribunal's order is that the assessee filed one appeal before the Tribunal with a delay of 627 days and the other with a delay of 509 days. In spite of objection raised by the department, the Tribunal has condoned the delay accepting the explanation of the assessee that the assessee took one to one and a half years to take "better opinion from tax experts" on the issues involved in the appeal. We are surprised in the light way the Tribunal has condoned the delay. In our view, the appeal before the Tribunal is certainly an afterthought on a matter apparently accepted by the assessee. However, since the Tribunal has exercised the discretion and allowed the delay condonation petition however unsatisfactory it may be, we proceed to ignore the same and consider the appeals on merits.

3. The very short question that arises for consideration is whether assessee is entitled to exemption on the profits derived on the sa