Shri Deepakkumar J.Galiawala, Surat V. The Income tax Officer,Ward-2(2), Surat

CO 38/AHD/2011

• Counselvise Citation: [2014] 123 COUNSELVISE.COM (IT) 0130 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 21 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 12-12-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 12-11-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 21-02-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Period of limitation; Cost of acquisition; Valuation report; Block assessment; Revised return
• Section: 234B; 139(5); 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD . . , , BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.127/AHD/2011 ( / ASSESSMENT YEAR : 2007-08) THE INCOME TAX OFFICER WARD-2(2) MAJURAGATE SURAT / VS. SHRI DEEPAKKUMAR J.GALIAWALA A-101, NEW CROWN PLAZA APARTMENT PIPARDI SHERI SALABATPURA, SURAT ./ ./ PAN/GIR NO. : AIPPG 3868 B ( / APPELLANT ) .. ( ! / RESPONDENT ) AND CO NO.38/AHD/2011 FOR AY 2007-08 (IN ITA NO.127/AHD/2011 FOR AY 2007-08) SHRI DEEPAKKUMAR J.GALIAWALA VS. THE ITO SURAT SURAT (CROSS OBJECTOR .... (RES PONDENT) REVENUE BY : SHRI M.K. SINGH, SR.DR ASSESSEE BY : SHRI RAMESH KUMAR, MALPANI, AR $ % / DATE OF HEARING 12/11/2014 $ % / DATE OF PRONOUNCEMENT 12/12/2014 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THE REVENUE AND THE ASSESSEE BOTH HAVE CHALLENGED T HE ORDER OF THE COMMISSIONER-OF INCOME TAX (APPEALS)-II, SURAT (CIT(A) IN SHORT) DATED 27/10/2010 BY WAY OF APPEAL AND CROSS-OBJECTI ON RESPECTIVELY. ITA NO.127/AHD/2011 (BY REVENUE) AND CO NO.38/AHD/2011 (BY ASSESSEE) ITO VS. SHRI DEEPAKKUMAR J.GALIAWALA ASST.YEAR 2007-08 - 2 - BOTH THE APPEAL AND THE CROSS OBJECTION ARE TAKEN U P TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR TH E SAKE OF CONVENIENCE. 2. FIRST, WE TAKE UP THE APPEAL FILED BY THE REVENU E, I.E. ITA NO.127/AHD/2011 FOR AY 2007-08. THE REVENUE HAS RA ISED THE FOLLOWING GROUNDS OF APPEAL:- [1] ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN ADOPTING VALUATION REPORT WI THOUT VERIFYING THE FACT THAT THE VALUER HAD NOT FURNISHE D ANY INSTANCE OF SALE TO JUSTIFY THE ESTIMATION F THE COST. [2] ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND I N LAW, THE LD.CIT(A) HAS ERRED IN DIRECTING THE A.O. TO TAKE T HE VALUE AND INDEXATION OF PROPERTY AS ON 01/04/1981. [3] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESS ING OFFICER. [4] IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) MAY BE SET ASIDE AND THAT OF ASSESSING OFFICER MAY BE RESTORED TO THE ABOVE EXTENT. 2.1. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE FI LED HIS RETURN OF INCOME DECLARING TOTAL INCOME AT RS.1,74,687/- AND ALSO C LAIMED LONG TERM CAPITAL GAIN (LTCG) OF RS.21,43,843/- ON SALE OF LA ND AND AFTER CLAIMING DEDUCTION U/S.54 & 54EC OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT). THE TAXABLE AMOUNT WAS SHOWN AT NIL. THEREAFTER, THE ASSESSEE FILED A REVISED RETURN ON 24/10/2008. IN THE SAID RETURN, SALE CONSIDERATION WAS SHOWN AS PER THE VAL UATION BY THE STAMP DUTY AUTHORITY AT RS.84,16,870/- AS AGAINST THE VAL UE AS PER SALE-DEED OF RS.44,55,990/-. THE ASSESSEE ALSO ADOPTED THE CO ST OF ACQUISITION AT ITA NO.127/AHD/2011 (BY REVENUE) AND CO NO.38/AHD/2011 (BY ASSESSEE) ITO VS. SHRI DEEPAKKUMAR J.GALIAWALA ASST.YEAR 2007-08 - 3 - RS.14,32,000/- IN PLACE OF RS.4,45,500/- AS SHOWN IN THE ORIGINAL RETURN. THE ASSESSING OFFICER (AO IN SHORT) DID NOT ACCEPT THE CLAIM OF THE ASSESSEE AND MADE ADDITION UNDER THE HEAD CAPITAL GAIN AMOUNTING TO RS.61,04,725/- IN RESPECT OF THE LTCG AND ALSO DISA LLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S.54EC APART FROM THE ADDITION ON ACCOUNT OF LOW HOUSEHOLD OF RS.48,000/-. AGAINST THIS, THE AS SESSEE FILED AN APPEAL BEFORE THE LD.CIT(A). BEFORE LD.CIT(A), THE ASSESS EE HAS ALSO CHALLENGED THE ISSUE OF INITIATION OF ASSESSMENT PROCEEDINGS B Y ISSUING NOTICE U/S.143(2) OF THE ACT BEING BEYOND THE PRESCRIBED L IMIT OF TIME. THE LD.CIT(A) AFTER CONSIDERING THE SUBMISSIONS PARTLY ALLOWED THE APPEAL, THEREBY THE LD.CIT(A) REJECTED THE GROUND OF THE AS SESSEE IN RESPECT OF THE ISSUANCE OF NOTICE U/S.143(2) OF THE ACT BEING BARR ED BY TIME. HOWEVER, IN RESPECT OF THE ADOPTION OF THE ACQUISITION COST, THE LD.CIT(A) DIRECTED THE AO TO TAKE THE VALUE OF THE PROPERTY AS ON 01/0 4/1981 AT THE VALUE TAKEN BY THE REGISTERED VALUER AND ALSO TO TAKE THE INDEXATION OF THE VALUE OF THE PROPERTY AS ON 01/04/1981. THE LD.CI T(A) IN RESPECT OF THE CLAIM OF DEDUCTION U/S.54EC OF THE ACT, REJECTED TH E CLAIM OF THE ASSESSEE BY HOLDING THAT THE ASSESSEE KNOWINGLY DEFERRED THE INVESTMENT OF CAPITAL GAIN AFTER THE EXPIRY OF THE PERIOD OF SIX MONTHS. IN RESPECT OF THE DISALLOWANCE MADE ON ACCOUNT OF HOUSEHOLD EXPENDITU RE, THE LD.CIT(A) RESTRICTED THE DISALLOWANCE TO RS.12,000/- AGAINST THE DISALLOWANCE OF RS.48,000/-. IN RESPECT OF THE GROUNDS RAISED AGAI NST CHARGING OF INTEREST U/S.234A, 234B & 234C OF THE ACT, THE SAME WERE REJ ECTED BY THE LD.CIT(A). ITA NO.127/AHD/2011 (BY REVENUE) AND CO NO.38/AHD/2011 (BY ASSESSEE) ITO VS. SHRI DEEPAKKUMAR J.GALIAWALA ASST.YEAR 2007-08 - 4 - 3. GROUND NOS.1 & 2 ARE INTER-RELATED. THESE GROU NDS OF REVENUES APPEAL ARE AGAINST THE ADOPTION OF THE VALUATION RE PORT FURNISHED BY THE ASSESSEE. THE LD.SR.DR VEHEMENTLY ARGUED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN ADOPTING THE VALUATION ESTIMATED BY TH E REGISTERED VALUER. HE SUBMITTED THAT IT IS EVIDENT THAT THE ASSESSEE H IMSELF HAS ADOPTED TWO DIFFERENT VALUATIONS OF THE PROPERTY, THEREFORE THE AO WAS JUSTIFIED IN REJECTING THE VALUATION REPORT AND COMPUTING THE CA PITAL GAIN ON THE BASIS OF THE STAMP DUTY VALUATION. 4. ON THE CONTRARY, THE LD.COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD.CIT(A) AND SUBMITTED THAT THE EARLIER VAL UATION WAS MADE MERELY ON THE BASIS OF THE TELEPHONIC INFORMATION. HOWEVER, IN RESPECT OF THE REVISED RETURN, THE VALUATION WAS DONE BY T HE REGISTERED VALUER BY VISITING THE SITE AND ON THE BASIS OF THE VISIT, TH E REGISTERED VALUER GAVE A DIFFERENT VALUE OF COST OF ACQUISITION OF THE PROPE RTY. THEREFORE, THE VALUE ADOPTED BY THE ASSESSEE IS ON THE BASIS OF RE PORT PREPARED AS PER LAW. 4.1. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN A DIRECTION IN PARA-3. 2 OF HIS ORDER AS UNDER:- 3.2. UPON DUE CONSIDERATION OF THE APPELLANTS REP LY, I FIND THAT THE REVISED RETURN HAS BEEN FILED WITHIN THE LIMITA TION PERIOD AND, THEREFORE, IS A VALID RETURN. THE ASSESSING OFFICE R HAS ALSO NOT GIVEN ANY REASON AS TO WHY THE VALUATION ADOPTED AS ON 01.4.1981 BY THE REGISTERED VALUER IS NOT ACCEPTABLE. I, THE REFORE, DIRECT THE ASSESSING OFFICER TO TAKE THE VALUE OF THE PROPERTY AS ON 01.4.1981, WHICH OPTION HAS BEEN EXERCISED BY THE APPELLANT, A T THE VALUE ITA NO.127/AHD/2011 (BY REVENUE) AND CO NO.38/AHD/2011 (BY ASSESSEE) ITO VS. SHRI DEEPAKKUMAR J.GALIAWALA ASST.YEAR 2007-08 - 5 - TAKEN BY THE REGISTERED VALUER AND TO ALSO TAKE THE INDEXATION F THE VALUE OF THE PROPERTY AS ON 01.4.1981, AS DETERMINE D IN THE REGISTERED VALUERS REPORT AND TO RE-COMPUTE THE CA PITAL GAINS ON THE PROPERTY AS WELL AS APPELLANTS SHARE IN THE PR OPERTY AS PER THE REGISTERED VALUERS REPORT. PART(A)&(B) OF THE SEC OND GROUND OF APPEAL IS, THEREFORE, ALLOWED AS PER THE ABOVE DIRE CTIONS. PART (C) OF THE SECOND GROUND OF APPEAL IS AGAINST REJECTION OF CLAIM U/S.54 OF THE ACT. THE APPELLANT, IN THIS REGARD HAS RELI ED UPON THE DECISION IN THE CASE OF CELLO PLASTS VS. DCIT, MUMB AI ITAT (2010 ITOL 60) AND HAS STATED THAT SINCE THE SCHEME OF RE C BONDS CAME INTO EXISTENCE FOR THE FIRST TIME ON 22.01.2007, HE COULD NOT HAVE INVESTED IN THE SAID SCHEME BEFORE THE SCHEME CAME INTO EXISTENCE, HENCE HE IS ELIGIBLE FOR DEDUCTION U/S.54 OF THE AC T. I HAVE DULY CONSIDERED THE SUBMISSION OF THE APPELLANT. HOWEVE R, I FIND THAT THERE IS NO DISPUTE THAT THE PERIOD OF 6 MONTHS FOR THE INVESTMENT OF THE CAPITAL GAIN FROM THE IMMOVABLE PROPERTY EXPIRE D ON 23.12.2006, AND TILL THEN THE ABOVE BONDS HAD NOT B EEN ISSUED. THEREFORE, THE APPELLANT KNOWINGLY DEFERRED THE INV ESTMENT OF CAPITAL GAIN AFTER THE EXPIRY OF THE ABOVE PERIOD A ND THERE IS NO QUESTION OF GETTING ANY BENEFIT UNDER EXEMPTION OF THE ABOVE SECTION. I, THEREFORE, UPHOLD THE ASSESSMENT ORDER ON THIS POINT AND DISMISS THIS PART OF GROUND OF APPEAL THE GROU ND OF APPEAL NO.2 IS, THEREFORE, PARTLY ALLOWED. 4.2 WE DO NOT FIND ANY INFIRMITY IN THE FINDING OF THE LDCIT(A) AS THE AO HAS NOT GIVEN ANY VALID REASON NOT TO ADOPT THE VALUATION GIVEN BY THE GOVERNMENT APPROVED VALUER. THEREFORE, GROUNDS R AISED IN THE APPEAL BY THE REVENUE ARE DEVOID OF ANY MERIT, SAME ARE RE JECTED. 5. GROUND NOS.3 & 4 ARE GENERAL IN NATURE REQUIRE N O INDEPENDENT ADJUDICATION. ITA NO.127/AHD/2011 (BY REVENUE) AND CO NO.38/AHD/2011 (BY ASSESSEE) ITO VS. SHRI DEEPAKKUMAR J.GALIAWALA ASST.YEAR 2007-08 - 6 - 6. NOW, WE TAKE UP THE CROSS OBJECTION NO.38/AHD/20 11 FOR AY 2007-08 FILED BY THE ASSESSEE (OUT OF ITA NO.127/AH D/2011 FOR AY 2007-08), WHEREIN FOLLOWING GROUNDS HAVE BEEN RAIS ED BY THE ASSESSEE:- 1. A) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF CASE AS WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN UPHOLDING T HE VALIDITY OF THE ASSESSMENT ORDER PASSED BY THE AO U/S.143(3) OF THE ACT. B) THAT THE ASSESSMENT ORDER PASSED BY LEARNED A .O. IS WRONG AND BAD-IN-LAW AS THE SAME HAS BEEN PASSED WITHOUT ISSUING ANY VALID NOTICE U/S.143(2) OF THE ACT. LEARNED CIT(A) HAS ERRED IN REJECTING THIS PLEA OF THE ASSESSEE AND IN UPHOLDIN G THE VALIDITY OF THE ASSESSMENT ORDER. 2. THAT ON FACTS AND IN THE CIRCUMSTANCES OF CASE, THE HONBLE CIT(A) HAS ERRED IN UPHOLDING DISALLOWANCE OF DEDUC TION U/S.54/54F OF THE ACT. 3. THAT ON FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE HONBLE CIT(A) HAS ERRED IN UPHOLDING DISALLOWANCE OF DEDUC TION U/S.54EC OF THE ACT. 4. THAT THE HONBLE CIT(A) HAS ERRED IN SUSTAINING CHARGING OF INTEREST U/S.234B OF THE ACT. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE OR MODIFY AND GROUND OF APPEAL. 6.1. THE FIRST GROUND IN THE CROSS-OBJECTION FILED BY THE ASSESSEE IS AGAINST REJECTION OF THE GROUND TAKEN IN APPEAL THA T THE ASSESSMENT IS BARRED BY LIMITATION AND BAD IN LAW. 6.2. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ORIGINAL RETURN WAS FILED UNDER THE PROVISIONS OF SECTION 139(4) OF THE ACT AND NOT U/S.139(1) OF THE ACT. HE SUBMITTED THAT THE ORIGI NAL RETURN WAS FILED U/S.139(4) OF THE ACT CANNOT BE REVISED U/S.139(5). IN SUPPORT OF THIS ITA NO.127/AHD/2011 (BY REVENUE) AND CO NO.38/AHD/2011 (BY ASSESSEE) ITO VS. SHRI DEEPAKKUMAR J.GALIAWALA ASST.YEAR 2007-08 - 7 - CONTENTION, HE RELIED ON THE JUDGEMENT OF HONBLE R AJASTHAN HIGH COURT RENDERED IN THE CASE OF VIMALCHAND VS. CIT REPORTE D AT (1985) 23 TAXMAN 236 (RAJ.). HE SUBMITTED THAT THE ASSESSMEN T PROCEEDINGS WERE INITIATED WITH REGARD TO THE REVISED RETURN. HE SU BMITTED THAT THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT A ND THE ASSESSMENT WAS FRAMED WITH REGARD TO THE REVISED RETURN FILED ON 2 4/10/2008. HE SUBMITTED THAT THE ORIGINAL RETURN WAS FILED ON 29/ 05/2008, WHEREAS PRESCRIBED DATED OF FILING OF SUCH RETURN U/S.139(1 ) OF THE ACT WAS 31.7.2006. HE SUBMITTED THAT THE ASSESSMENT OUGHT TO HAVE BEEN FRAMED WITHIN ONE YEAR FROM THE DATE OF 29/05/2008. HE SU BMITTED THAT A SPECIFIC GROUND WAS TAKEN BEFORE THE LD.CIT(A), WHE REIN IT WAS SUBMITTED THAT THE NOTICE U/S.143(2) OF THE ACT WAS ISSUED BY THE AO ON 26/08/2009 ON THE BASIS OF AND WITH REFERENCE TO THE REVISED R ETURN FILED ON 24/10/2008. HE SUBMITTED THAT U/S.139(4) OF THE DA TE OF FILING OF RETURN WAS 29/05/2008 AND PERIOD OF 12 MONTHS EXPIRED ON 3 1/05/2009. HE SUBMITTED THAT IT WAS POINTED OUT THAT NOTICE U/S.1 43(2) COULD HAVE BEEN ISSUED LATEST BY 31/05/2009. THEREFORE, THE NOTICE ISSUED ON 26/08/2009 IS AFTER THE PRESCRIBED LIMIT U/S.143(2) OF THE ACT AND, THEREFORE IS HIT BY THE LIMITATION. 6.3. ON THE CONTRARY, LD.SR.DR SUPPORTED THE ORDER OF THE LD.CIT(A) AND SUBMITTED THAT THE ASSESSMENT WAS VALIDLY FRAME D AND THE ASSESSEE CANNOT BE ALLOWED TO RAISE THIS PLEA OF LIMITATION AND ADMITTEDLY HE HAS NOT RAISED THIS ISSUE BEFORE THE AO. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. ITA NO.127/AHD/2011 (BY REVENUE) AND CO NO.38/AHD/2011 (BY ASSESSEE) ITO VS. SHRI DEEPAKKUMAR J.GALIAWALA ASST.YEAR 2007-08 - 8 - THE LD.CIT(A) HAS RECORDED IN HIS ORDER THAT THERE IS NO MERIT IN THE SUBMISSION AS THE APPELLANT FILED THE REVISED RETUR N. THE ORIGINAL RETURN OF INCOME BECAME NO-EST. THE PERIOD OF LIMITATION OF ISSUANCE OF NOTICE HAS THEREFORE TO BE CALCULATED FROM THE DATE OF FIL ING OF THE REVISED RETURN OF INCOME. FROM THE ABOVE FINDING, IT APPEARS THAT THE LD.CIT(A) HAS TAKEN AS IF THE ORIGINAL RETURN WAS FILED U/S.139(1 ) OF THE ACT BUT THE CONTENTION OF THE ASSESSEE IS THAT THE ORIGINAL RET URN WAS FILED U/S. 139(4) OF THE ACT AND SUCH RETURN CANNOT BE REVISED U/S.13 9(5) OF THE ACT. IN SUPPORT OF THIS CONTENTION, HE RELIED ON THE JUDGME NT OF THE HONBLE HIGH COURT OF RAJASTHAN RENDERED IN THE CASE OF VIMALCHA ND VS. CIT(SUPRA). THE HONBLE RAJASTHAN HIGH COURT IN THE SAID CASE H ELD AS UNDER:- 10 . A CONTENTION WAS RAISED IN MST. ZULEKHA BEGUM KHAT OON VS. CIT (1981) 129 ITR 560 (CAL) : TC11R.728 THAT THE SUBSEQUENT R ETURN COULD NOT BE A REVISED RETURN UNDER S. 139(5) OF THE ACT AND THAT S. 139(4) DID NOT AUTHORISE FILING OF MORE THAN ONE RETURN AND, THEREFORE, THE SUBSEQUENT RETURN IS INVALID AND THE ASSESSMENT IS BARRED. IN SUPPORT OF THAT KU LU VALLEY TRANSPORT CO.'S CASE (SUPRA) WAS REFERRED. IN THAT CONNECTION IT WA S OBSERVED BY THE LEARNED JUDGES CONSTITUTING THE DIVISION BENCH THAT ALL THA T THE SUPREME COURT LAID DOWN WAS THAT A RETURN WHETHER SHOWING EITHER A PRO FIT OR LOSS CAN BE FILED UNDER S. 22(1) OR S. 22(3) OF THE ACT OF 1922. IN T HE FACTS AND CIRCUMSTANCES OF THAT CASE IT WAS HELD THAT THE SUBSEQUENT RETURN FI LED BY THE ASSESSEE WAS A VALID RETURN UNDER S. 139(4) AND THE ASSESSMENT MAD E THEREUNDER WAS WITHIN THE PRESCRIBED TIME UNDER S. 153. MST. ZULEKHA BEGU M'S CASE (SUPRA) WAS FOLLOWED IN KUMAR JAGDISH CHANDRA SINHA VS. CIT (SU PRA) AND DISSENT WAS EXPRESSED WITH SIDDHARTHA PUBLICATIONS (P) LTD. VS. CIT (1981) 129 ITR 603 (DEL) [SIC THIS SHOULD BE O.P. MALHOTRA V.S CIT (19 81) 129 ITR 379 (DEL) : TC9R.435 ED.]. IN THAT CASE FOR THE ASST. YR. 1964- 65 THE ASSESSEE DID NOT FILE HIS RETURN WITHIN TIME SPECIFIED IN S. 139(1) NOR W AS A NOTICE ISSUED TO HIM UNDER S. 139(2). HE FILED A VOLUNTARY RETURN ON 13T H AUG., 1964 AND REVISED RETURN ON 18TH FEB., 1969. SIMILARLY FOR THE ASST. YR. 1965-66 HE FILED VOLUNTARY RETURN ON 17TH DEC., 1965 AND A REVISED R ETURN ON 17TH JULY, 1969. THE ASSESSMENT FOR 1964-65 WAS COMPLETED ON 15TH JA N., 1970. THE ASSESSMENT FOR THE YEAR 1965-66 WAS COMPLETED ON 6T H JULY, 1970. PENALTY PROCEEDINGS WERE INITIATED. IT WAS CONTENDED THAT T HE REVISED RETURNS WERE INVALID; THAT THE ASSESSMENT PROCEEDINGS WERE BARRE D BY LIMITATION AND THAT ITA NO.127/AHD/2011 (BY REVENUE) AND CO NO.38/AHD/2011 (BY ASSESSEE) ITO VS. SHRI DEEPAKKUMAR J.GALIAWALA ASST.YEAR 2007-08 - 9 - THE PENALTY PROCEEDINGS WERE INVALID. IT WAS HELD T HAT THE REVISED RETURNS WERE VALID AND THE ASSESSMENTS HAD BEEN MADE UNDER S. 14 3 AND WERE WITHIN THE TIME PRESCRIBED UNDER S. 153. THEIR LORDSHIPS AGREE D WITH THE FINDING RECORDED IN O.P. MALHOTRA'S CASE (SUPRA) THAT IN VI EW OF S. 297(2)(B) OF THE ACT, THE RETURN FILED ON 31ST MARCH, 1965 HAD TO BE FITTED AGAINST ONE OR THE OTHER OF THE SUB-SECTIONS OF S. 139 AND IT COULD BE TREATED AS RETURN FILED BY THE ASSESSEE ONLY UNDER S. 139(4). IT WAS FURTHER HELD THAT SUB-S. (5) OF S. 139 APPLIES ONLY IN A CASE WHERE A PERSON FURNISHES A R ETURN UNDER SUB-S. (1) OR (2) AND THAT SUB-SECTION DID NOT REFER TO SUB-S (4) AND, THEREFORE, DOES NOT ENTITLE AN ASSESSEE TO RECTIFY OR REVISE A RETURN F ILED UNDER S. 139(4). 7.1. RELIANCE HAS ALSO BEEN PLACED BY THE LD.COUNSE L FOR THE ASSESSEE ON THE JUDGMENT OF THE HONBLE HIGH COURT OF GUJARAT R ENDERED IN THE CASE OF CIT VS. PANORAMA BUILDERS (P.) LTD. REPORTED AT (2014) 45 TAXMANN.COM 159 (GUJARAT), WHEREIN THE HONBLE HIGH COURT HAS HELD THAT THE SECTION 292BB DOES NOT APPLY TO ISSUANCE O F NOTICE, NEITHER IT CURES THE DEFECT OR ENLARGES STATUTORY PERIOD WHERE A MANDATORY NOTICE UNDER SECTION 143(2) IS REQUIRED TO BE ISSUED WITHI N LIMITATION FIXED UNDER THE ACT. IN ABSENCE OF ISSUANCE OF THE NOTICE UNDE R THE PROVISO TO SECTION 143(2) WITHIN A PERIOD OF 12 MONTHS FROM THE END OF THE MONTH IN WHICH RETURN WAS FURNISHED BY THE ASSESSEE, THE PROCEEDIN GS INITIATED BY THE ASSESSING OFFICER WITH REGARD TO BLOCK ASSESSMENT P ERIOD 1.4.1997 TO 25.7.2002 ON THE BASIS OF NOTICE ISSUED ON 6.7.2006 UNDER SECTION 143(2), AFTER ABOUT 20 MONTHS, WAS TIME BARRED AND THE ENTI RE PROCEEDINGS IN PURSUANCE OF SUCH NOTICE IS NULL AND VOID. IN THE CASE IN HAND, AS PER THE ACKNOWLEDGEMENT ENCLOSED AT PAGE-1 OF THE PAPER-BOO K, THE ASSESSEE HAD FURNISHED ORIGINAL RETURN FILED ON 29/05/2008 FOR T HE AY 2007-08. IT IS ALSO THE CONTENTION OF THE ASSESSEE THAT THE SAID R ETURN WAS FILED U/S.139(4) OF THE ACT AS THE SAME NEITHER WAS FURNI SHED DURING THE PERIOD PRESCRIBED U/S.139(1) NOR WAS FURNISHED IN PURSUANC E OF THE NOTICE ISSUED ITA NO.127/AHD/2011 (BY REVENUE) AND CO NO.38/AHD/2011 (BY ASSESSEE) ITO VS. SHRI DEEPAKKUMAR J.GALIAWALA ASST.YEAR 2007-08 - 10 - U/S.142(1) OF THE ACT. HE SUBMITTED THAT THE RETUR N WAS FURNISHED WITHIN THE TIME PRESCRIBED U/S.139(4) OF THE ACT. WE FIND FROM THE ORDER OF THE LD.CIT(A) THAT THESE FACTS ARE NOT EXAMINED AND HAV E NOT BEEN RECORDED IN THE ORDER. IT IS ALSO NOT COMING OUT FROM THE R ECORD WHETHER ANY NOTICE U/S.142(1) OF THE ACT WAS ISSUED IN PURSUANCE THERE OF THE ASSESSEE FURNISHED THE RETURN WHICH WAS LATER ON REVISED VI DE REVISED RETURN DATED 24/10/2008. THE REVENUE HAS NOT PLACED ANY MATERIA L ON RECORD WITH REGARD TO THE PRESCRIBED DATE FOR FILING THE RETUR N IN THE AY 2007-08 U/S.139(1) OF THE ACT AND IT HAS ALSO NOT BEEN PLAC ED ON RECORD WHETHER ANY NOTICE U/S.142(1) OF THE ACT WAS ISSUED IN PURS UANCE THEREOF THE ASSESSEE FILED RETURN ON 25/05/2008. THESE MATERIA L FACTS ARE REQUIRED TO BE VERIFIED, THEREFORE THIS ISSUE IS RESTORED BACK TO THE FILE OF LD.CIT(A) FOR DECISION AFRESH IN ACCORDANCE WITH LAW. THUS, THIS GROUND OF ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOS ES. 8. APROPOS TO GROUND NO.2, THE LD.COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE ASSESSEE HAD CLAIMED U/S.54 IN RESPECT OF THE INVESTMENT MADE IN A RESIDENTIAL HOUSE ON 25/08/2006 WITHIN ONE YEAR F ROM THE TRANSFER OF ORIGINAL ASSET. IT IS SUBMITTED THAT THE LAND SOLD WAS A RESIDENTIAL LAND, THEREFORE THE ASSESSEE WAS ENTITLED DEDUCTION U/S.5 4/54F OF THE ACT. 8.1. ON THE CONTRARY, THE LD.SR.DR SUPPORTED THE OR DERS OF THE AUTHORITIES BELOW. 9. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THE LD.CIT(A) HAS NOT GIVEN ANY FINDING WITH REGARD TO THE INVESTMENT MAD E IN FLAT. FOR DECIDING THE ISSUE REGARDING ENTITLEMENT FOR DEDUCT ION U/S.54/54F OF THE ITA NO.127/AHD/2011 (BY REVENUE) AND CO NO.38/AHD/2011 (BY ASSESSEE) ITO VS. SHRI DEEPAKKUMAR J.GALIAWALA ASST.YEAR 2007-08 - 11 - ACT, THE LD.CIT(A) HAS GIVEN FINDING ONLY ON THE IN VESTMENT MADE IN THE REC BONDS. THEREFORE THIS GROUND IS ALSO RESTORED BACK TO THE FILE OF LD.CIT(A) FOR DECISION AFRESH. 10. APROPOS TO GROUND NO.3, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN DISALLOWING THE CLAIM MADE U/S.54EC OF THE ACT ON THE GROUND THAT THE INVESTME NT WAS MADE BELATEDLY. THE LD.COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT RENDERED IN THE CASE OF CIT VS. CELLO PLAST REPORTED AT (2012) 253 CTR (BO M) 246, WHEREIN THE HONBLE BOMBAY HIGH COURT VIDE PARAS-21 & 22 HAS HE LD AS UNDER:- 21. IT IS DIFFICULT TO LAY DOWN ANY PARTICULAR RUL E IN THIS REGARD. WE THINK IT BOTH PRUDENT AND PROPER TO CONSIDER ONLY T HE CASE BEFORE US AND ONLY TO THE EXTENT WHERE THE BONDS WERE NOT AVAILAB LE PRIOR TO THE EXPIRY OF THE SIX MONTH PERIOD, INCLUDING THE LAST DAY. A PERSON IS ENTITLED, AS WE HAVE HELD EARLIER, TO INVEST IN THE SAID BONDS U PTO THE LAST AVAILABLE DATE. IF THAT BE SO, IT MUST FOLLOW THAT THE EXTENS ION OUGHT TO BE GRANTED AT LEAST FOR THE PERIOD PRIOR TO THE EXPIRY OF SIX MONTHS WHEN THE BONDS WERE NOT AVAILABLE AND UPTO THE DATE ON WHICH THEY WERE ULTIMATELY MADE AVAILABLE. IN ANY EVENT, IN SUCH A CASE AN ASS ESSEE WOULD BE ENTITLED TO A REASONABLE EXTENSION WHICH MUST THEN BE DECIDED, DEPENDING UPON THE FACTS OF EACH CASE. A PERSON CAN NOT BE EXPECTED TO MAKE THE INVESTMENT ON THE FIRST POSSIBLE DATE ON W HICH THE BONDS WERE MADE AVAILABLE AFTER THE EXPIRY OF THE SIX MONTHS P ERIOD OR ANY EXTENDED DATE PRESCRIBED BY THE CBDT. DURING THE PERIOD THE BONDS WERE UNAVAILABLE A PERSON IS LIKELY TO INVEST THE AMOUNT ELSEWHERE. TO EXPECT OR REQUIRE HIM NOT TO DO SO WOULD BE UNJUST FOR REA SONS TOO OBVIOUS TO STATE. HE CANNOT THEN BE EXPECTED AT A DAY'S NOTICE TO BREAK THE INVESTMENT AND TRANSFER THE SAME TO THE BONDS STIPU LATED IN SECTION 54EC. 22. IN THE PRESENT CASE, THE BONDS WERE NOT AVAILAB LE FROM 4/8/2006 TO 22/1/2007. THE LAST DATE FOR INVESTMENT IN THE NORM AL COURSE WOULD ITA NO.127/AHD/2011 (BY REVENUE) AND CO NO.38/AHD/2011 (BY ASSESSEE) ITO VS. SHRI DEEPAKKUMAR J.GALIAWALA ASST.YEAR 2007-08 - 12 - HAVE BEEN 21/9/2006 WHICH WAS EXTENDED UPTO 31/12/2 006. THE RESPONDENTS OUGHT TO BE ENTITLED TO AN EXTENSION OF THE NUMBER OF DAYS BETWEEN 4/8/2006 TO 21/9/2006 AT THE VERY LEAST AND , IN ANY EVENT, TO A REASONABLE EXTENSION. THE RESPONDENTS ADMITTEDLY IN VESTED IN THE BONDS ON 31/1/2007 I.E. WITHIN NINE DAYS OF THEIR BEING A VAILABLE ONCE AGAIN FROM 22/1/2007. CONSIDERING THAT THE BONDS WERE NOT AVAILABLE FOR SUCH A LONG PERIOD, AN EXTENSION OF MERELY NINE DAYS IS EXTREMELY REASONABLE IN THE PRESENT FACTS. 10.1. THEREFORE, WE HEREBY SET ASIDE THE ORDER OF T HE LD.CIT(A) AND THE ISSUE IS RESTORED BACK TO THE FILE OF LD.CIT(A) TO DECIDE IN THE LIGHT OF THE AFORESAID JUDGEMENT OF HONBLE BOMBAY HIGH COURT RE NDERED IN THE CASE OF CIT VS. CELLO PLAST. THUS, THIS GROUND RAI SED IN THE CROSS- OBJECTION IS ALLOWED FOR STATISTICAL PURPOSES. 11. GROUND NO.4 RAISED IN THE CROSS-OBJECTION IS CO NSEQUENTIAL IN NATURE. 12. IN THE RESULT, REVENUES APPEAL IS DISMISSED, W HEREAS CROSS- OBJECTION FILED BY THE ASSESSEE IS PARTLY ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 12 TH DAY OF DECEMBER, 2014 AT AHMEDABAD. SD/- SD/- ( . . ) ( ) ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 12/ 12 /2014 +% . . , . . ./ T.C. NAIR, SR. PS ITA NO.127/AHD/2011 (BY REVENUE) AND CO NO.38/AHD/2011 (BY ASSESSEE) ITO VS. SHRI DEEPAKKUMAR J.GALIAWALA ASST.YEAR 2007-08 - 13 - !'#$ %$' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. ! / THE RESPONDENT. 3. ,-. / / CONCERNED CIT 4. / ( ) / THE CIT(A)-II, SURAT 5. 01 -. , % -. , , / DR, ITAT, AHMEDABAD 6. 134 / GUARD FILE. / BY ORDER, !0 //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION - 26.11.14/8.12.14 (DICTATION-PA D 27- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..09.12.14 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S .. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BAC K TO THE SR.P.S./P.S...12.12.14 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 12.12.14 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER