RAJAN GUNBA TELANG, MUMBAI V. PR. CIT - 21 , MUMBAI

ITA 2440/MUM/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9120 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 18-04-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset; Non compliance; Assessment record; Set aside
• Section: 143(3); 54F; 142(1); 139(5); 274; 139(1); 139(4); 148; 54; 263; 10; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHR I N.K. PRADHAN, ACCOUNTANT MEMBER ITA NO .2440 / MUM . /2019 ( ASSESSMENT YEAR : 2014 15 ) RAJAN GUMBA TELANG 8, KAUSTUBH, ANANT PATIL ROAD SHIVAJI PARK, DADAR (WEST) MUMBAI 400 028 PAN AABPT6771A . APPELLANT V/S PR. COMMISSIONER OF INCOME TAX CIRCLE 21, MUMBAI . RESPONDENT ASSESSEE BY : SHRI SUBHASH S. SHETTY REVENUE BY : SHRI RAJESH KUMAR DATE OF HEARING 04.07.2019 DATE OF ORDER 25.09.2019 O R D E R PER SAKTIJIT DEY, J.M. C APTIONED APPEAL HAS BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 19 TH MARCH 2019, PASSED UNDER SECTION 263 OF THE INCOME - TAX ACT, 1961 (FOR SHORT 'THE ACT' ) BY LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX 21 ( THE LEARNED PRINCIPAL COMMISSIONER ), MUMBAI, FOR THE ASSESSMENT YEAR 2014 15. 2 RAJAN GUMBA TELANG 2 . BRIEF FACTS ARE, THE ASSESSEE , AN INDIVIDUAL , FILED HIS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 17 TH JULY 2014, DECLARIN G TOTAL INCOME OF ` 32,07,210. ASSESSMENT IN CASE OF THE ASSESSEE WAS COMPLETED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 26 TH JULY 2016, ACCEPTING THE INCOME RETURNED BY THE ASSESSEE. WHEN THE MATTER STOOD THUS, LEARNED PRINCIPAL COMMISSIONER CALLE D FOR THE ASSESSMENT RECORDS AND AFTER EXAMINING IT FO U ND THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD SOLD A RESIDENTIAL FLAT ON 9 TH FEBRUARY 2014, FOR DECLARED SALE CONSIDERATION OF ` 30 LAKH. HOWEVER, THE STAMP DUTY AUTHORITY HAS DETERMINE D THE VALUE OF THE PROPERTY AT ` 46,24,848, FOR THE PURPOSE OF STAMP DUTY VALUATION. HE FOUND THAT AFTER CLAIMING INDEXATION BENEFIT, THE TOTAL LONG TERM CAPITAL GAIN OF ` 30,08,473, ACCRUED TO THE ASSESSEE. AS AGAINST THE LONG TERM CAPITAL GAIN ARISING AT HIS HANDS, THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 54 OF THE ACT ON ACCOUNT OF PURCH ASE OF A NEW RESIDENTIAL FLAT FOR AN AMOUNT OF ` 45,38,000. REFERRING TO THE PROVISIONS OF SECTION 54(1) OF THE ACT, LEARNED PRINCIPAL COMMISSIONER OBSERVED , FOR CLAI MING DEDUCTION THE ASSESSEE IS REQUIRED TO PURCHASE THE NEW RESIDENTIAL HOUSE WITHIN A PERIOD OF ONE YEAR BEFOR E OR TWO YEARS AFTER THE DATE ON WHICH THE TRANSFER TOOK PLACE. HE OBSERVED , IF THE ASSESSEE DOES NOT PURCHASE THE RESIDENTIAL HOUSE WITHIN A PERIOD OF ONE YEAR PRIOR TO THE DATE OF TRANSFER OR HAS NOT UTILIZED THE CAPITAL GAIN IN PURCHASE OF NEW HOUSE WITHIN THE DUE DATE OF FILING OF RETURN OF INCOME 3 RAJAN GUMBA TELANG UNDER SECTION 139(1) OF THE ACT , SUCH CAPITAL GAIN HAS TO BE DE POSITED IN CAPITAL GAIN ACCOUNT SCHEME OF THE GOVERNMENT AS PROVIDED UNDER SECTI ON 54(2) OF THE ACT. HE OBSERVE D , THOUGH , THE ASSESSEE HAD NOT INVESTED THE CAPITAL GAIN IN PURCHASING A NEW RESIDENTIAL HOUSE BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME UNDER S ECTION 139(1) OF THE ACT, HE HAS NOT DEPOSITED THE UNUTILIZED CAPITAL GAIN IN CAPITAL GAIN ACCOUNT SCHEME. THUS, HE OBSERVED , THE CONDITIONS OF SECTION 54(2) HAVING BEEN VIOLATED, THE ASSESSEE IS NOT ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 54(1) OF THE ACT. SINCE , THE ASSESSING OFFICER HAD FAILED TO EXAMINE THE APPLICABILITY OF SECTION 54(2) OF THE ACT, QUA THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 54(1) OF THE ACT, LEARNED PRINCIPAL COMMISSIONER ISSUED A SHOW CAUSE NOTICE UNDER SECTION 263 OF THE ACT TO THE ASSESSEE REQUIRING HIM TO EXPLAIN AS TO WHY THE ASSESSMENT ORDER BEING ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE SHOULD NOT BE SET ASIDE. IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE FILED HIS REPLY ON 5 TH FEBRUARY 2019, S TATING THAT HE WAS UNAWARE OF THE CONDITION IMPOSED BY THE STATUTE REQUIRING HIM TO DEPOSIT THE UNUTILIZED CAPITAL GAIN IN CAPITAL GAIN ACCOUNT SCHEME. FURTHER, IT WAS SUBMITTED , HE IS STILL ENTITLED TO CLAIM DEDUCTION UNDER SECTION 54(1) OF THE ACT SINCE HE HAS INVESTED CAPITAL GAIN IN PURCHASE OF NEW HOUSE WITHIN THE DUE DATE OF RETURN OF INCOME AS PER SECTION 139(4) OF THE ACT. THE LEARNED PRINCIPAL COMMISSIONER, HOWEVER, DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE. HE OBSERVED , 4 RAJAN GUMBA TELANG IGNORANCE OF LA W CANNOT BE AN EXCUSE FOR NON COMPLIANCE WITH THE BASIC CONDITION. HE OBSERVED , WHILE COMPLETING THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT, THE ASSESSING OFFICER HAS COMPLETELY FAILED TO EXAMINE WHETHER THE CONDITIONS OF SECTION 54(2) OF THE ACT HAS B EEN FULFILLED. THUS, HE CONCLUDED , THE ASSESSEE HAVING NOT FULFILLED THE CONDITION OF SECTION 54(2) OF THE ACT IS NOT ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 54(1) OF THE ACT. ACCORDINGLY, CONCLUDING THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFI CER IS ERRONEOUS AND PREJUDIC IAL TO THE INTEREST OF REVENUE HE SET IT ASIDE WITH A DIRECTION TO RE ASSESSEE THE INCOME OF THE ASSESSEE. 3 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAD ENQUIRE D INTO ALL THE ISSUES INCLUDING ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 54(1) OF THE ACT. IN THIS CONTEXT, HE DREW OUR ATTENTION TO THE NOTICE DATED 9 TH JUNE 2016, ISSUED UNDER SECTION 142(1) OF THE ACT. HE SUBMITTED , IN THE SAID NOTICE, THE ASSESSING OFFICER HAD ENQUIRED ABOUT THE PURCHASE OF RESIDENTIAL HOUSE BY THE ASSESSEE. HE SUBMITTED , IN REPLY TO THE SAID NOTICE, THE ASSESSEE HAD FURNISHED HIS REPLY ON 15 TH JUNE 2016, MENTIONING THE DETAILS OF PAYMENT MADE TOWARDS PURCHASE OF NEW HOUSE. HE SUBMITTED , THROUGH E MAIL DATED 16 TH JUNE 2016, THE ASSESSING OFFICER HAD SPECIFICALLY ENQUIRED INTO THE COMPLIANCE WITH THE CONDITIONS SET OUT IN SECTION 54(2) OF THE ACT . HE SUBMITTED , IN 5 RAJAN GUMBA TELANG RESPONSE TO THE SAID QUERY, THE ASSESSEE FURNISHED HIS REPLY ON 21 ST JUNE 2016, STATING THAT THE CONDITION OF SECTION 54(2) OF THE ACT HAS NOT BEEN VIOLATED. THUS, HE SUBMITTED , IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAD NOT ONLY ENQUIRED INTO THE FACTUAL DETAILS BUT ALSO THE LEGAL ASPECT RELATING TO ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 54 OF THE ACT. HE SUBMITTED , IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD NOT ONLY SUBMITTED ITS REPLY JUSTIFYING THE CLAIM OF DEDUCTION UNDER SECTION 54 OF THE ACT, BUT HAS ALSO CITED RELEVANT CASE LAWS HOLD ING THAT IF THE CAPITAL GAIN IS UTILIZED IN PURCHASE OF NEW RESIDENTIAL HOUSE BEFORE THE DUE DATE OF RETURN OF INCOME UNDER SECTION 139(4) OF THE ACT, THE ASSESSE E WOULD STILL BE ELIGIBLE TO AVAIL DEDUCTION UNDER SECTION 54 OF THE ACT. THE LEARNED AUTHORISED REPRESENTA TIVE REFERRING TO THE PROVISION OF SECTION 54(2) OF THE ACT SUBMITTED , IT ALSO ENCOMPASSES ALL OTHER PROVISIONS UNDER SECTION 139 OF THE ACT INCLUDIN G SUB CLAUSE (4) AND (5) . THUS, HE SUBMITTED , IF THE UNUTILIZED CAPITAL GAIN IS INVESTED IN PURCHASE OF NEW HOUSE WITHIN THE TIME SPECIFIED UNDER SECTION 139(4) AND 139(5) OF THE ACT, THERE IS NO NEED FOR DEPOSITING IT IN CAPITAL GAIN ACCOUNT SCHEME WITHI N THE DUE DATE OF RETURN OF INCOME AS PROVIDED UNDER SECTION 139(1) OF THE ACT. IN THIS CONTEXT, HE DREW OUR ATTENTION TO THE FOLLOWING DECISIONS: I ) CIT V/S RAJESH KUMAR JALAN, [2006] 286 ITR 274 (GAU.); 6 RAJAN GUMBA TELANG II ) FATHIMA BAI V/S ITO, [2009] 32 DTR (KAR.) 243 (KAR. ); III ) CIT V/S JAGRITI AGGARWAL, [2011] 339 ITR 610 (P&H); IV ) KISHORE H. GALAIYA V/S ITO, [2012] 137 ITD 229 (MUM.); V ) BINA INDRAKUMAR V/S ITO, [2012] 137 ITD 238 (MUM.); VI ) GAJENDRA KUMAR T. AGARWAL V/S ITO, [2011] 11 ITR (TRIB.) 640 (MUM.); VII ) ANIL KUMAR OMKAR SINGH AURORA V/S ITO, ITA NO.4648/ MUM./2013, DATED 06.11.2013; AND VIII ) HUMAYUN SULEMAN MERCHANT V/S CIT, [2016] 387 ITR 421 (BOM.). 4 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , SINCE THE DECISION OF THE ASSESSING OFFICER IN ALLOWING DEDUCTION UNDER SECT ION 54 IS IN CONSONANCE WITH THE RATIO LAID DOWN IN THE DECISIONS CITED BEFORE HIM, IT IS A POSSIBLE VIEW, HENCE, CANNOT BE CONSIDERED AS ERRONEOUS. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , MERELY BECAUSE LEARNED PRINCIPAL COMMISSIONER DOES NOT AGR EE WITH THE VIEW EXPRESSED BY THE ASSESSING OFFICER OR ENTERTAINS A DIFFERENT VIEW, THE ASSESSMENT ORDER CANNOT BE CONSIDERED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. IN THIS CONTEXT, HE RELIED UPON THE FOLLOWING DECISIONS: I ) CIT V/S MAX IN DIA LTD., [2007] 295 ITR 282 (SC); AND II ) CIT V/S C.J. INTERNATIONAL HOTELS LTD., [2010] 325 ITR 313 (DEL.). 7 RAJAN GUMBA TELANG 5 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , SINCE THE ASSESSING OFFICER HAS DECIDED THE ISSUE AS PER THE LAW PREVAILING AT THE TIME OF MAKING THE ASSESSMENT, IT CANNOT BE CONSIDERED TO BE ERRONEOUS. HE SUBMITTED , THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN HUMAYUN SULEMAN MERCHANT V/S CCIT, [2016] 387 ITR 421 (BOM.), IS SUBSEQUENT TO THE DATE OF THE ASSESSMENT ORDER . THEREFORE, BY VIRTUE OF SUCH DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT THE ASSESSMENT ORDER CANNOT BE CONSIDERED TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. IN SUPPORT OF SUCH CONTENTION, HE RELIED UPON THE DECISI ON OF THE TRIBUNAL, MUMBAI BENCH, IN GAJENDRA KUMAR T. AGARWAL V/S ITO, 11 ITR (TRIB.) 640 (MUM.). THUS, HE SUBMITTED , THE ORDER PASSED UNDER SECTION 263 OF THE ACT SHOULD BE SET ASIDE. 6 . THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED , THE ASSESSING OFFI CER HAS FAILED TO APPLY HIS MIND TO THE RELEVANT STATUTORY PROVISIONS AS WELL AS THE JUDICIAL PRECEDENT S ON THE ISSUE RESULTING IN WRONGFUL ALLOWANCE OF ASSESSEES CLAIM OF DEDUCTION 54(1) OF THE ACT EVEN THOUGH ALL THE CONDITIONS OF SECTION 54 OF THE ACT WERE NOT COMPLIED. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED , THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN HUMAYUN SULEMAN MERCHANT (SUPRA) CLEARLY CLINCHES THE ISSUE IN FAVOUR OF THE REVENUE. HE SUBMITTED , THOUGH IN VARIOUS JUDICIAL PR ECE DENTS IT HAS BEEN HELD 8 RAJAN GUMBA TELANG THAT THERE IS NO REQUIREMENT OF DEPOSITING CAPITAL GAIN IN CAPITAL GAIN ACCOUNT SCHEME IF THE CAPITAL GAIN IS UTILIZED FOR PURCHASE OF NEW RESIDENTIAL HOUSE WITHIN THE EXTENDED TIME LIMIT PROVIDED UNDER SECTION 139(4) AND 139(5) O F THE ACT, HOWEVER, THE ASSESSEE WOULD BE ELIGIBLE TO CLAIM SUCH DEDUCTION IF SUCH CAPITAL GAIN IS UTILIZED PRIOR TO THE ACTUAL DATE OF FILING OF RETURN OF INCOME BY THE ASSESSEE . HE SUBMITTED , SINCE THE ASSESSEE HAS NOT UTILIZED THE CAPITAL GAIN IN PURCHA SE OF NEW RESIDENTIAL HOUSE WITHIN THE ACTUAL DATE OF FILING OF RETURN OF INCOME, HE SHOULD HAVE DEPOSITED THE CAPITAL GAIN IN CAPITAL GAIN ACCOUNT SCHEME. FAILURE TO DO SO DISENTITLE S THE ASSESSEE TO AVAIL DEDUCTION U/S 54(1) OF THE ACT. 7 . WE HAVE CONSIDER ED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. WE HAVE ALSO APPLIED OUR MIND TO THE DECISIONS RELIED UPON. AS FAR AS THE BASIC FACTS ARE CONCERNED, THERE IS NO DISPUTE THAT THE ASSESSEE HAD DERIVED LONG TERM CAPITAL GAIN OF ` 30,08,473, FROM SALE OF A RESIDENTIAL FLAT. THE LONG TERM CAPITAL GAIN HAS NOT BEEN OFFERED TO TAX BY CLAIMING DEDUCTION UNDER SECTION 54 OF THE ACT TOWARDS INVESTMENT IN A NEW RESIDENTIAL HOUSE. ADMITTEDLY, THE ASSESSEE HAD FILED HIS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 17 TH JULY 2014. WHEREAS, THE PAYMENT S TOWARDS PURCHASE OF NEW RESIDENTIAL FLAT WERE MADE BETWEEN 5 TH OCTOBER 2015 AND 15 TH FEBRUARY 2016. THUS, FROM THE AFORESAID FACTS, IT IS VERY MUCH CLEAR THAT BEFORE 9 RAJAN GUMBA TELANG THE ACTUAL DATE OF FILING OF RETURN OF INCOM E BY THE ASSESSEE, CAPITAL GAIN WAS NOT UTILIZED TOWARDS PURCHASE OF NEW RESIDENTIAL HOUSE. KEEPING IN VIEW THE AFORESAID FACTUAL POSIT ION IF WE EXAMINE THE PROVISIONS CONTAINED UNDER SECTION 54(2) OF THE ACT, IT IS CLEAR THAT IF THE CAPITAL GAIN IS NOT AP PROPRIATED TOWARDS PURCHASE OF THE NEW ASSET BEFORE ONE YEAR FROM THE DATE OF TRANSFER OF THE ORIGINAL ASSET OR IS NOT U TILIZED FOR THE PURCHASE OR CONSTRUCTION OF NEW ASSET BEFORE THE DATE OF FURNISHING OF RETURN OF INCOME UNDER SECTION 139 OF THE ACT , SUCH UNUTILIZED CAPITAL GAIN HAS TO BE DEPOSITED IN A CAPITAL GAIN ACCOUNT SCHEME BEFORE THE DUE DATE OF FURNISHING OF RETURN OF INCOME PROVIDED UNDER SECTION 139(1) OF THE ACT. THUS, SECTION 54(2) OF THE ACT SPEAKS OF TWO CONDITIONS FOR AVAILING DEDUCTIO N UNDER SECTION 54(1) OF THE ACT. FIRSTLY, THE ASSESSEE HAS TO UTILISE THE CAPITAL GAIN IN PURCHASE OF NEW PROPERTY BEFORE THE DATE OF FURNISHING OF RETURN OF INCOME UNDER SECTION 139 OF THE ACT WHICH ENCOMPASSES SUB SECTION S (1), (4) AND (5). SECONDLY, I F IT IS NOT DONE SO, IT HAS TO BE DEPOSITED IN A CAPITAL GAIN ACCOUNT SCHEME BEFORE THE DUE DATE OF FURNISHING OF RETURN OF INCOME AS PROVIDED UNDER SECTION 139(1) OF THE ACT. 8 . IN THE FACTS OF THE PRESENT CASE, THOUGH , THE ASSESSEE HAD FILED HIS RETURN OF INCOME WITHIN THE DUE DATE PROVIDED UNDER SECTION 139(1) OF THE ACT, HOWEVER, BY THAT TIME HE HAS NOT UTILIZED THE CAPITAL GAIN IN PURCHASE OF NEW PROPERTY. THEREFORE, AS PER THE PROVISION OF SECTION 10 RAJAN GUMBA TELANG 54(2) OF THE ACT, THE UNUTILIZED CAPITAL GAIN SHOULD HAV E BEEN DEPOSITED IN CAPITAL GAIN ACCOUNT SCHEME . A T THIS JUNCT URE, IT IS NECESSARY TO EXAMINE THE DECISIONS RELIED UPON BY THE ASSESSEE. 9 . IN RAJESH KUMAR JALAN (SUPRA), THE HONBLE G A UHATI HIGH COURT HAS HELD THAT READING OF SECTION 54(2) OF THE ACT WOULD MAKE IT CLEAR THAT IT ENCOMPASSES NOT ONLY SECTION 139(1) OF THE ACT BUT SECTION 139(4) AND 139(5) OF THE ACT AS WELL. HOWEVER, WHAT THE DECISION IMPLIES IS , INVESTMENT TOWARDS PURCHASE OF NEW HOUSE MADE BEFORE THE ACTUAL DATE OF FILING OF RETURN OF INCOM E EVEN UNDER SECTION 139(4) OF THE ACT WOULD SATISFY THE CONDITION OF SECTION 54(2) OF THE ACT. 10 . IN CASE OF FATHIMA BAI (SUPRA), IT IS VERY MUCH CLEAR THAT THE ASSESSEE DID NOT FILE ANY RETURN OF INCOME WITHIN THE DUE DATE PROVIDED UNDER SECTION 139(1) OF THE ACT. IN RESPONSE TO NOTICE ISSUED UNDER SECTION 148 OF THE ACT, THE ASSESSEE FILED ITS RETURN OF INCOME ONLY ON 27 TH FEBRUARY 2000. W HEREAS , THE DUE DATE OF FILING OF RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT WAS 30 TH JULY 1988. HOWEVER, FROM T HE FACTS OF THE SAID DECISION, IT BECOMES VERY MUCH CLEAR THAT BY THE ACTUAL DATE OF FILING OF RETURN OF INCOME WITHIN THE EXTENDED PERIOD PROVIDED UNDER SECTION 139(4) OF THE ACT, THE ASSESSEE HAD INVESTED THE UNUTILIZED CAPITAL GAIN IN PURCHASE OF NEW FL AT. 11 RAJAN GUMBA TELANG 11 . IN THE CASE OF JAGRUTI AGARWAL (SUPRA), THE FACTS ARE MORE OR LESS SIMILAR. THOUGH , THE DUE DATE OF FILING OF RETURN OF INCOME AS PER SECTION 139(1) OF THE ACT WAS 31 ST JULY 2006, HOWEVER, THE ASSESSEE HAD FILED HER RETURN OF INCOME ON 28 TH MARCH 2007 UNDER SECTI ON 139(4) OF THE ACT. SINCE, THE UNUTILIZED CAPITAL GAIN WAS INVESTED IN PURCHASE OF NEW PROPERTY BY THE ACTUAL DATE OF FILING OF RETURN OF INCOME BY THE ASSESSEE UNDER SECTION 139(4) OF THE ACT, CLAIM OF DEDUCTION UNDER SECTION 54 O F THE ACT WAS ALLOWED , . 12 . IN HUMAYUN SULEMAN MERCHANT (SUPRA), THE HON'BLE JURISDICTIONAL HIGH COURT , AFTER TAKING NOTE OF THE DECISION S OF HONBLE GAUHATI HIGH COURT AND HONBLE KARNATAKA HIGH COURT CITED SUPRA , HAS HELD THAT FOR CLAIMING EXEMPTION UNDER SECTION 54F OF THE ACT , THE CAPITAL GAIN ON SALE OF CAPITAL ASSET HAS TO BE UTILIZED BEFORE THE ACTUAL DATE OF FILING OF RETURN OF INCOME FOR THE SUBJECT ASSESSMENT YEAR. THEREFORE, THE LEGAL PRINCIPLE EMEGING FROM THE AFORESAID DECISIONS , AND MORE PARTIC ULARLY FROM THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN HUMAYUN SULEMAN MERCHANT (SUPRA) , IS TO THE EFFECT THAT IF THE ASSESSEE UTILIZES THE CAPITAL GAIN IN PURCHASE OF A NEW HOUSE PROPERTY BEFORE THE ACTUAL DATE OF FILING OF RETURN OF INCOME FOR THE SUBJECT ASSESSMENT YEAR EVEN WITHIN THE EXTENDED TIME LIMIT ALLOWED UNDER SUB SECTIONS (4) AND (5) OF SECTION 139 OF THE ACT , THE CONDITIONS OF SECTION 54(2) OF THE ACT WOULD STAND SATISFIED AND ASSESSEES CLAIM 12 RAJAN GUMBA TELANG OF DEDUCTION UNDER SECTION 54(1) OF THE ACT CANNOT BE DENIED ONLY BECAUSE, THE ASSESSEE HAD NOT DEPOSITED UNUTILSED CAPITAL GAIN IN CAPITAL GAIN ACCOUNT SCHEME WITHIN THE DUE DATE OF FILING OF RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT. 13 . IF WE APPLY THE AFORESAID LEGAL PRINCIPLE TO TH E FACTS OF THE PRESENT CASE, IT CAN BE SEEN THAT TILL THE ACTUAL DATE OF FILING OF RETURN OF INCOME BY THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEAR, THE CAPITAL GAIN HAD NOT BEEN UTILIZED FOR PURCHASE OF NEW RESIDENTIAL HOUSE. THAT BEING THE CASE, THE ASS ESSEE WAS REQUIRED TO DEPOSIT THE UNUTILIZED CAPITAL G AIN IN CAPITAL GAIN ACCOUNT SCHEME WITHIN THE DUE DATE OF FILING OF RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT. THUS, PRIMA FACIE , THE CONDITIONS OF SECTION 54(2) OF THE ACT HAVE NOT BEEN COMPLIED . NO DOUBT, DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ENQUIRED INTO THE CLAIM OF DEDUCTION UNDER SECTION 54(1) OF THE ACT AND DID RAISE A QUERY REGARDING COMPLIANCE WITH THE CONDITIONS OF SECTION 54(2) OF THE ACT. IT IS ALSO A FACT THAT THE ASSESSEE HAD SUBMITTED HIS REPLY IN RESPONSE TO THE QUERY RAISED BY THE ASSESSING OFFICER. HOWEVER, WHILE ALLOWING ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 54(1) OF THE ACT, THE ASSESSING OFFICER HAS NOT PROPERLY APPLIED THE STATUTORY PROVISION AS CONTAINED UNDER SECTION 54 OF THE ACT. THAT BEING THE CASE, THE DECISION OF THE ASSESSING OFFICER IN ALLOWING ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 54(1) OF TH E ACT, 13 RAJAN GUMBA TELANG IS LEGALLY UNSUSTAINABLE. HENCE , THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICI AL TO THE INTERESTS OF REVENUE TO THAT EXTENT. 14 . THE CONTENTION OF THE LEARNED AUTHORISED REPRESENTATIVE THAT THE ASSESSING OFFICERS DECISION IN ALLOWING DEDUCTION UNDER SECTION 54(1) OF THE ACT IS AS PER THE LEGAL POSITION PREVAILING ON THE DATE OF PASSI NG OF THE ASSESSMENT ORDER, IN OUR VIEW, IS UNACCEPTABLE. AS DISCUSSED EARLIER, THE RATIO LAID DOWN IN THE DECISIONS REFERRED TO ABOVE DO NOT LEAD TO THE CONCLUSION THAT THE ASSESSEE IS NOT REQUIRED TO DEPOSIT THE UNUTILIZED CAPITAL GAIN IN CAPITAL GAIN AC COUNT SCHEME IF IT IS UTILIZED IN PURCHASE OF NEW RESIDENTIAL HOUSE WITHIN THE TIME ALLOWED UNDER SECTION 139(4) OF THE ACT , IRRESPECTIVE OF THE ACTUAL DATE OF FILING OF RETURN OF INCOME BY THE ASSESSEE FOR THE SUBJECT ASSESSMENT YEAR. ON THE CONTRARY, THE LEGAL PROPOSITION WHICH FOLLOWS FROM THE AFORESAID DECISIONS IS , THOUGH , THE PROVISION OF SECTION 54(2) OF THE ACT ENCOMPASSES DUE DATE OF FILING OF RETURN OF INCOM E NOT ONLY AS PER SECTION 139(1) BUT EVEN SECTI ON 139(4) AND 139(5) OF THE ACT, H OWEVER, TH E CONDITION OF SECTION 54(2) OF THE ACT WOULD STAND SATISFIED IF THE ASSESSEE INVEST S THE UNUTILIZED CAPITAL GAIN IN PURCHASE OF NEW HOUSE PROPERTY BEFORE THE ACTUAL DATE OF FILING OF RETURN OF INCOME FOR THE SUBJECT ASSESSMENT YEAR EVEN WITHIN THE EXTENDE D TIME PERMITTED UNDER SECTION 139(4) AND 139(5) OF THE ACT. THAT BEING THE CASE, IT CANNOT BE SAID THAT THE DECISION OF THE ASSESSING OFFICER IS IN 14 RAJAN GUMBA TELANG ACCORDANCE WITH THE LEGAL POSITION PREVAILING AT THE RELEVANT POINT OF TIME. THE OTHER DECISIONS CITED BY T HE LEARNED AUTHORISED REPRESENTATIVE CHALLENGING THE VALIDITY OF EXERCISE OF JURISDICTION UNDER SECTION 263 OF THE ACT, WOULD NOT HELP THE ASSESSEE IN VIEW OF THE SPECIFIC FACT INVOLVED IN THE PRESENT CASE. THUS, ON OVER ALL CONSIDERATION OF FACTS AND MATER IAL ON RECORD AND KEEPING IN VIEW THE RATIO LAID DOWN IN THE DECISION S CITED BEFORE US , INCLUDING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN HUMAYUN SULEMAN MERCHANT (SUPRA), WE HAVE NO HESITATION IN HOLDING THAT LEARNED PRINCIPAL COMMISSIONE R HAS CORRECTLY EXERCISED HIS POWER UNDER SECTION 263 OF THE ACT TO REVISE THE IMPUGNED ASSESSMENT ORDER . ACCORDINGLY, WE UPHOLD THE ORDER PASSED UNDER SECTION 263 OF THE ACT BY DISMISSING THE GROUNDS RAISED BY THE ASSESSEE. 15 . IN THE RESULT, ASSESSEES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 25.09.2019 SD/ - N.K. PRADHAN ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 25.09.2019 15 RAJAN GUMBA TELANG COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI