Mamta Dubey, Kanpur V. Income Tax Officer-3(2), Lucknow

ITA 284/LKW/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4041 (ITAT-LUCKNOW)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 17-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Period of limitation; Application of stay; Question of law
• Section: 143(3); 54F; 54; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH SMC, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.284/LKW/2016 ASSESSMENT YEAR 2011-12 & (STAY APPLICATION NO.02/LKW/2016) ASSESSMENT YEAR 2011-12 INCOME TAX OFFICER 3(2), LUCKNOW V S MAMTA DUBEY, 18/12, JEEVAN GARDEN KRISHNA NAGAR, KANPUR PAN ACBPD 6940 P (RESPONDENT) (APPELLANT) SHRI ANKIT BAJPAI, ADVOCATE APPELLANT BY SHRI AMIT NIGAM, DR RESPONDENT BY 15 /07/2016 DATE OF HEARING 23 / 08 /2016 DATE OF PRONOUNC EMENT O R D E R THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A), INTER ALIA ON FOLLOWING GROUNDS: 1. THAT ON THE FACTS OF THE CASE, THE LD. COMMISS IONER OF INCOME-TAX (APPEALS), LUCKNOW ('THE CIT(A)') ERRED IN LAW IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER ('AO') AND DENYING THE APPELLANT'S CLAIM FOR EXEMPTION UNDER S ECTION 54F OF THE INCOME-TAX ACT, 1961 ('THE ACT'). 2. THAT, WITHOUT PREJUDICE, ON THE FACTS AND IN T HE CIRCUMSTANCES OF THE CASE, THE CIT(A) FAILED TO APPRECIATE THAT T HE CAPITAL ITA NO. 284 / LKW /201 6 2 GAIN ARISING FROM SALE OF LAND WAS UTILIZED FOR ACQ UISITION OF RESIDENTIAL HOUSE PROPERTY WITHIN STIPULATED PERIOD AS PRESCRIBED UNDER SECTION 54F OF THE ACT AND THE EXE MPTION HAS DISALLOWED BEEN DISALLOWED ON HYPER TECHNICAL B ASIS. 3. THAT IN LAW AND ON THE FACTS OF THE CASE, THE CIT(A) ERRED IN LAW IN HOLDING THAT NON-DEPOSIT OF NET CONSIDERATIO N IN CAPITAL GAINS ACCOUNT SCHEME WAS FATAL TO THE CLAIM OF THE APPELLANT FOR EXEMPTION UNDER SECTION 54F(4) OF THE ACT AND D ENIED THE RELIEF/ EXEMPTION WITHOUT MAKING PURPOSIVE INTERPRE TATION AND HARMONIOUS CONSTRUCTION OF THE PROVISIONS OF THE AC T. 4. THAT LD CIT(A) IN UPHOLDING THE ACTION OF THE A O ERRED IN LAW AND ON FACTS OF THE CASE IN NOT APPRECIATING THE FA CTS THAT WHILE CONDUCTING THE QUASI JUDICIAL PROCEEDINGS AO HAS TO FOLLOW THE LAW OF JUDICIAL PRECEDENTS AND OF HIGHER COURTS, X THE LD CIT(A) ERRED IN LAW AND ON FACTS OF THE CASE IN NOT QUASHING THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT IN WHICH LIABILITY OF TAX WAS NOT DETERMINED IN ANY OF THE DOCUMENTS SERVED TO THE APPELLANT WITHIN THE STIPUL ATED PERIOD AS PRESCRIBED UNDER 153 OF THE ACT. 6. THE LD CIT(A) ERRED THE ERRED IN UPHOLDING THE ASSESSMENT U/S 143(3) WHEN PROPER NOTICE U/S 143(2) OF THE I TAX A CT, 1961 WAS NOT SERVED ON THE APPELLANT WITHIN STIPULATED P ERIOD FROM THE DATE OF SUBMISSION OF THE RETURN. 7. THE ORDER PASSED BY LD CIT(A) IS BAD ON FACTS O F THE CASE AND IN LAW, UNJUST AND AGAINST THE PRINCIPLES OF NATURA L JUSTICE. 8. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEN D OR MODIFY ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF H EARING OF THE APPEAL. 2. THE ASSESSEE HAS ALSO FILED THE STAY APPLICATION WHICH IS ALSO FIXED FOR DISPOSAL. SINCE THE MAIN APPEAL IS HEARD, THERE FORE, THE STAY PETITION HAS BECOME INFRUCTUOUS AND ACCORDINGLY I DISMISS TH E SAME. 3. IN THE MAIN APPEAL, THE ASSESSEE HAS CLAIMED EXE MPTION /DEDUCTION U/S 54F OF THE ACT BUT IT WAS DISALLOWED BY THE ASSESSING ITA NO. 284 / LKW /201 6 3 OFFICER ON THE GROUND THAT ASSESSEE HAS NOT DEPOSIT ED THE UNUSED AMOUNT IN THE ACCOUNT AS SPECIFIED BY THE SCHEME IN CAPITAL GAIN ACCOUNT SCHEME 1988. LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS PURCHASED A LAND ON 20.07.2007, WH ICH WAS SOLD ON 20.12.2010. THE ASSESSEE HAS ALSO PURCHASED A LAND ON 10.10.2012. LD. COUNSEL FOR THE ASSESSEE HAS FURTHER CONTENDED THAT ASSESSING OFFICER HAS MADE A DISALLOWANCE ONLY FOR THE REASON THAT TH E ASSESSEE COULD NOT MAKE THE DEPOSIT OF THE SALE PROCEED IN THE ACCOUNT AS SPECIFIED BY CAPITAL GAIN SCHEME 1988. IT WAS FURTHER CONTENDED THAT AS PER PROVISIONS OF SECTION 54F(4) OF THE ACT, IF THE NE T CONSIDERATION WHICH HAS NOT BEEN APPROPRIATED BY THE ASSESSEE TOWARDS T HE PURCHASE OF NEW ASSETS WITHIN ONE YEAR BEFORE THE DATE ON WHICH THE TRANSFER OF THE ORIGINAL ASSETS TOOK PLACE OR WHICH IS NOT UTILIZED BY HIM FOR THE PURCHASE OF CONSTRUCTION OF NEW ASSETS BEFORE THE D ATE OF FURNISHING, THE RETURN OF INCOME U/S 139 SHALL BE DEPOSITED BY HIM BEFORE FURNISHING THE RETURN IN AN ACCOUNT IN ANY SUCH BANK OR INSTIT UTION AS HAS BEEN SPECIFIED THEREIN. LD. COUNSEL FOR THE ASSESSEE FUR THER CONTENDED THAT IN THE INSTANT CASE, THE RETURN WAS DUE TO BE FILED U/ S 139(1) ON 31.07.2012 AND AS PER SECTION 139(4) ON 31.03.2012. SINCE THE ASSESSEE HAS PURCHASED THE PROPERTY ON 10.01.2012 S HE IS ENTITLED FOR THE DEDUCTION U/S 54F OF THE ACT. IN SUPPORT OF HIS CONTENTION, LD. COUNSEL HAS INVITED MY ATTENTION TO THE JUDGMENT OF THE HONBLE GAUHATI HIGH COURT IN THE CASE OF CIT VS. RAJESH KUMAR JALA N REPORTED IN 286 ITR 274 AND THE JUDGMENT OF THE HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS. JAGTAR SINGH CHAWLA IN ITA NO. 71 OF 2012 DATED 20.03.2013 AND ORDER OF THE ITAT BANGALORE BE NCH IN THE CASE OF ITA NO. 284 / LKW /201 6 4 SRI NIPUN MEHROTRA VS. ACIT REPORTED IN 110 ITD 520 (BANG) IN WHICH IT HAS BEEN HELD THAT WHEREVER PROPERTY HAS BEEN PURCH ASED BEFORE THE EXTENDED PERIOD OF LIMITATION OF FILING OF RETURN, DEDUCTION U/S 54F IS TO BE ALLOWED. 4. LD. DR OF THE REVENUE RELIED UPON THE ORDER OF T HE CIT(A). 5. HAVING CAREFULLY EXAMINED THE ORDER OF THE CIT(A ) IN THE LIGHT OF RIVAL SUBMISSIONS. I FIND THAT UNDISPUTEDLY THE ASS ESSEE HAS NOT DEPOSITED THE UNUSED SALE CONSIDERATION IN THE CAPI TAL GAIN ACCOUNT BEFORE THE DUE DATE PRESCRIBED U/S 139(1) OF THE AC T BUT SHE HAS PURCHASED THE PROPERTY BEFORE THE DATE PRESCRIBED U /S 139(4) OF THE ACT. THE DUE DATE FOR FILING OF RETURN U/S 139(1) O F THE ACT WAS I.E. 31.07.2011 AND THE LAST DATE OF FILING OF RETURN U/ S 139(4) OF THE ACT WAS 31.03.2012. THE ASSESSEE HAS PURCHASED THE RESIDENT IAL HOUSE ON 10.1.2012 BY MAKING THE INVESTMENT OF ENTIRE SALE C ONSIDERATION. 6. THESE ASPECTS WHETHER THE ASSESSEE IS ENTITLED D EDUCTION U/S 54F OF THE ACT WHERE HE HAS PURCHASED THE PROPERTY BEFO RE THE EXPIRY OF THE DATE PRESCRIBED U/S 139(4) OF THE ACT WAS EXAMINED BY VARIOUS HIGH COURTS AT DIFFERENT POINT OF TIME. THE HONBLE GAUH ATI HIGH COURT IN THE CASE OF CIT VS. RAJESH KUMAR JALAN REPORTED IN 286 ITR 274 HAS HELD THAT SECTION 139 OF THE ACT IS MENTIONED IN SECTION 54(2) IN THE CONTEXT THAT THE UNUTILISED PORTION OF THE CAPITAL GAIN ON THE SALE OF PROPERTY USED FOR RESIDENCE SHOULD BE DEPOSITED BEFORE THE D ATE OF FURNISHING THE RETURN OF INCOME TAX U/S 139 OF THE ACT CANNOT BE M EANT ONLY SECTION 139(1) BUT IT MEANS ALL SUB SECTIONS OF SECTION 139 OF I.T. ACT. UNDER SECTION (4) OF SECTION 139 OF THE ACT ANY PERSON WH O HAS NOT FURNISHED ITA NO. 284 / LKW /201 6 5 A RETURN WITHIN THE TIME ALLOWED TO HIM UNDER SUB-S ECTION (1) OF SECTION 142 MAY FURNISH THE RETURN FOR ANY PREVIOUS YEAR AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASS ESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASSESSMENT YEAR WHICHE VER IS EARLIER. SIMILARLY IN THE CASE OF CIT VS. JAGTAR SINGH CHAWL A (SUPRA) IN WHICH THE HONBLE HIGH COURT HAS EXAMINED THIS ISSUE IN THE L IGHT OF PROVISIONS OF SECTION 54F OF THE ACT AND THEIR LORDSHIPS HAVE HEL D THAT SINCE THE ASSESSEE HAS ACQUIRED A RESIDENTIAL HOUSE BEFORE TH E END OF NEXT FINANCIAL YEAR IN WHICH SALE HAS TAKEN PLACE THE AS SESSEE IS NOT LIABLE TO PAY ANY CAPITAL GAIN. THE QUESTION OF LAW REFERRED IN THAT CASE IS ALSO EXTRACTED HEREIN UNDER:- WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE HONBLE ITAT, NEW DELHI IS JUSTIFIED IN LAW IN REVERSING TH E FINDING OF CIT(A) IN CONFIRMING THE ADDITION OF RS.76,85,829/- MADE BY THE ASSESSING OFFICER BY DISALLOWING THE CLAIM OF EXEMP TION U/S 54F OF THE I.T. ACT AS THE ASSESSEE FAILED TO DEPOSIT THE UNUTILIZED CONSIDERATION OF CAPITAL GAIN IN THE CAPITAL GAINS IN THE CAPITAL GAINS ACCOUNTS SCHEME AS PER THE LIMIT PRESCRIBED U NDER THE ACT? 7. RELYING UPON THIS JUDICIAL PRONOUNCEMENT, THE TR IBUNAL IN THE CASE OF SRI NIPUN MEHROTRA VS. ACIT (SUPRA) HELD AFTER P LACING A RELIANCE UPON THE CIRCULAR NO.495 DT. 22.10.1987 OF THE CBDT THAT DEDUCTION U/S 54F OF THE ACT IS TO BE ALLOWED EVEN WHEN THE ASSES SEE MADE THE INVESTMENT BEFORE THE END OF EXPIRY OF THE PERIOD P RESCRIBED U/S 139(4) OF THE ACT. AGAIN THE ITAT MUMBAI BENCH IN THE CASE OF ANIL KUMAR OMKAR SINGH AURORA VS. ITO IN ITA NO. 4648/MUM/2013 HAS ALSO HELD THAT IF THE ASSESSEE FULFILS THE CONDITION FOR EXEM PTION U/S 54 OF THE ACT WITHIN THE EXTENDED TIME FOR FILING OF RETURN U/S 1 39(4) OF THE ACT, THE ASSESSEE IS ENTITLED TO EXEMPTION U/S 54 OF THE ACT . THIS VIEW HAS ALSO ITA NO. 284 / LKW /201 6 6 AGAIN BEEN TAKEN BY THE TRIBUNAL CHENNAI BENCH IN T HE CASE OF ITO VS. SHRI A. PREM KUMAR IN ITA NO. 2050/MDS/2012 . THEREFORE, NOW THE SETTLED POSITION OF LAW IS THAT IF THE ASSESSEE MAD E THE INVESTMENT BEFORE THE EXTENDED PERIOD PRESCRIBED U/S 139(4) OF THE ACT, HE OR SHE IS ENTITLED FOR DEDUCTION U/S 54F OF THE ACT. THERE FORE, IN THE LIGHT OF THIS LEGAL POSITION, I AM OF THE VIEW THAT IN THE INSTAN T CASE, ASSESSEE IS ENTITLED FOR DEDUCTION U/S 54F OF THE ACT. I ACCORD INGLY, SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE AO TO ALLOW DEDU CTION U/S 54F OF THE ACT AS PER LAW. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES, WHEREAS THE STAY PETITION IS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DAT E MENTIONED ON THE CAPTION PAGE) SD/- (S.K. YAD AV ) JUDICIAL MEMBER DATED: 23/08 /2016 AKS / DS / COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR