RITA CHETAN NAIK, MUMBAI V. ITO 19(3)(2), MUMBAI

ITA 3986/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4235 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 07-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS R M MADHAVI
• Assessee Lawyers: MRS HIRAL SHAH
• Keywords: Period of limitation; Question of law
• Section: 54; 2; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUM BAI . . , , ! ! ! ! '# '# '# '# , $ $ $ $ BEFORE SHRI R. S. SYAL, AM, AND SHRI AMIT SHUKLA, JM /. I.T.A. NO.3986/MUM/2012 ( % & % & % & % & '& '& '& '& / ASSESSMENT YEAR: 2008-09) SMT. RITA CHETAN NAIK, B-57/545, GANDHI NAGAR, BANDRA (E), MUMBAI- 400 051, % % % % / VS. INCOME TAX OFFICER, 19(3)(2) PIRAMAL CHAMBERS, MUMBAI. ( /. )* /. PAN/GIR NO. : AABPN5054A ( (+ / APPELLANT ) : ( ,-(+ / RESPONDENT ) (+ . / APPELLANT BY : MR. MRS. HIRAL SHAH ,-(+ . / RESPONDENT BY : MRS. R.M MADHAVI % ! / DATE OF HEARING : 04.07. 2013 01' ! /DATE OF PRONOUNCEMENT : 10.07.2013 ' / O R D E R PER :AMIT SHUKLA , JM THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST THE IMPUGNED ORDER DATED 29.03.2012 PASSED BY LD. CIT(APPEALS)-30, MUM BAI, FOR THE QUANTUM OF ASSESSMENT PASSED U/S 143(3), FOR THE ASSESSMENT Y EAR- 2008-09. ONLY ISSUE RAISED IN THE GROUNDS OF APPEAL IS DISALLOWANCE OF PART CLAIM OF RS. 8,90,218/-, U/S 54. 2 ITA 3986MUM 2012(AY-2008-09) SMT. RITA CHETA N NAIK VS. ITO 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAS SOLD A RESIDENTIAL FLAT NO. 504, MAMTA COOP HSG SOCIETY, PLOT NO. 138, SHER E PUNJAB SOCIETY, OFF MAHAKALI CAVES ROAD, ANDHERI(E) , MUMBAI-93 FOR A TOTAL CONSIDERATION OF RS. 26,75,000/-, VIDE AGREEMENT DA TED 30.01.2008. THE LONG TERM CAPITAL GAIN WAS WORKED OUT AT RS. 18,90,218/- AS PER THE COMPUTATION INCORPORATED BY THE ASSESSING OFFICER AT PAGE 1 TO 2 OF THE ASSE SSMENT ORDER. THE SALE PROCEEDS FROM THE SALE OF FLAT WAS REINVESTED IN ANOTHER PRO PERTY PURCHASED/ REGISTERED ON 11.08.2008, JOINTLY WITH HER HUSBAND IN PUNE. THE A SSESSING OFFICER NOTED THAT ASSESSEE HAS APPROPRIATED ONLY RS. 10 LAKHS FOR CLA IMING EXEMPTION U/S 54, UPTO THE DUE DATE OF FILING OF RETURN OF INCOME U/S 139(1) I .E., 31.07.2008, AND HENCE, FULL COMPLIANCE OF SECTION 54(2) WAS NOT MADE. IN RESPON SE TO THE SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED THAT THE ENTIRE SALE PROCEEDS WA S INVESTED TOWARDS THE ACQUISITION OF THE NEW ASSET AND ENTIRE DETAILS WERE FURNISHED BEFORE THE AO. THE ASSESSEE HAS FILED RETURN OF INCOME ON 30.03.2009, THAT IS, U/S 139(4) WHEREIN THE CLAIM WAS MADE ALONG WITH DETAILS OF THE ACQUISITION OF CAPITAL GA IN AND CLAIM MADE U/S 54 AS ALL THE PROCEEDS WERE INVESTED MUCH BEFORE THIS DATE. IT WA S FURTHER SUBMITTED THAT THE REQUIREMENT OF SECTION 54(2) SHOULD BE TAKEN AS DUE DATE PRESCRIBED U/S 139 WHICH ALSO INCLUDES 139(4). IN SUPPORT OF THIS CONTENTIO N RELIANCE WAS PLACED ON THE DECISION OF THE GAUHATI HIGH COURT IN THE CASE OF C IT VS. RAJESH KUMAR JALAN (2006) 286 ITR 274 WHEREIN IT HAS BEEN HELD THAT DUE DATE OF FURNISHING OF RETURN U/S 139 AS STIPULATED IN SECTION 54(2) APPLIES TO RETURN U/S 1 39(4) ALSO. 3. THE ASSESSING OFFICER REJECTED THE ASSESSEES CO NTENTION AND HELD THAT SUB- SECTION (2) OF THE SECTION 54 PROVIDES THE DUE DATE PRESCRIBED UNDER SUB-SECTION (1) OF SECTION 139 AND THEREFORE, THE BALANCE AMOUNT OF UN APPROPAITED LONG TERM CAPITAL GAIN OF RS. 8,90,218/- HAS TO BE DISALLOWED, AS THE DUE DATE IN THIS CASE WAS 31.07.2008, AND THE APPROPRIATION OF BALANCE AMOUNT WAS DONE AF TER THIS DATE. 4. BEFORE THE CIT(APPEALS), THE ASSESSEE GAVE FOLLO WING FACTS:- 3 ITA 3986MUM 2012(AY-2008-09) SMT. RITA CHETA N NAIK VS. ITO DURING THE A.Y. 2008-09 THE APPELLANT HAD SOLD A HOUSE PROPERTY FOR RS. 26,75,0001- ON 8.2.2008. THE LONG TERM CAPITAL GAIN OF RS. 18,90,218/- WAS RE-INVESTED IN A PROPERTY AT PUNE, JOINTLY WITH HER HUSBAND. THE APPELLANT HAD CLAIMED EXEMPTION U/S 54 WHILE F ILING THE RETURN OF INCOME ON 30.03.2009. THE PAYMENTS WERE MADE FROM HER CANARA BANK ACCOUNT NO. 905 AS UNDER: DATE AMOUNT REMARK 08.02.2008 58,500 BROKERAGE TO MR. PRAKASH DADLANI 28.07.2008 10,00,000 DD FOR PURCHASE OF PROPERTY AT PUNE 01.08.2008 50,000 SOCIETY TRANSFER FEES- GERA LANDM ARK CONDOMINIUM 08.08.2008 30,000 DD FOR REGISTRATION FEES AT PUNE 08.08.2008 532,600 DD FOR STAMP DUTY AT PUNE 11.08.2008 530,000 TOWARDS PURCHASE OF PROPERTY 11.09.2008 125,000 BROKERAGE PAID TO ASSET MANAGEME NT SERVICES TOTAL 22,67,600/- THUS FROM THE ABOVE THE AMOUNT INVESTED IN NEW FLAT IS AS UNDER: UPTO 31.7.2008 RS. 10,58,500 FROM 1.8.2008 TO 30. 3. 2009 RS. 1 2,09,100 RS. 22,67,600 AND SUBMITTED THAT THE PROCESS FOR TRANSFERRING THE PROPERTY WAS INITIATED BEFORE THE DUE DATE OF FILING RETURN AND THE SAID PROPERTY WAS TRANSFERRED IN THE NAME OF APPELLANT BY 8 TH AUGUST, 2008. THEREFORE, THE CLAIM WAS MADE IN TH E RETURN FILED U/S 139 (4) WHICH WAS FILED ON 30.03.2009, AND THE CLAIM FOR EX EMPTION U/S 54 CANNOT BE DENIED. 5. THE LD. CIT(APPEALS) HOWEVER CONFIRMED THE ACT ION OF THE AO ON THE GROUND THAT THE APPELLANT HAS NOT APPROPRIATED THE BALANCE SUM OF RS. 8,90,218/- BEFORE THE DUE DATE FOR FILING OF RETURN U/S 139(1) WHICH WAS ON 31.07.2008. THE RELEVANT OBSERVATIONS OF THE CIT(APPEALS) ARE REPRODUCED HER EIN BELOW. I FIND THAT THE AO IS QUITE JUSTIFIED IN MAKING T HE IMPUGNED ADDITION BY NOT ALLOWING EXEMPTION U/S 54 OF THE I.T. ACT ON THE SUM OF RS. 8,90,218/- SECTION 54(2) IS VERY CLEAR IN THIS REGARD. THE APPELLANT HAS NOT APPROPRIATED THE SUM OF RS. 8,90,218/- BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME WHICH WAS 3 1.07.2008 IN THE CASE OF THE APPELLANT. AS REGARDS TO THE CASE LAWS CITED BY THE AR OF THE APPELLANT IN HIS PAPER BOOK THE SAME WERE FOUND TO BE DISTINGUISHABLE ON FACTS AND THEREFORE NOT HELPING THE CAUSE OF THE APPELLANT. THEREFORE, THE ACTION OF THE AO I N DENYING THE EXEMPTION U/S. 54 OF RS. 8,90,218/- IS ACCORDINGLY CONFIRMED. THIS GROUND OF APPEAL IS DISMISSED. 4 ITA 3986MUM 2012(AY-2008-09) SMT. RITA CHETA N NAIK VS. ITO 6. BEFORE US, LEARNED COUNSEL SUBMITTED THAT THE PO INT IN ISSUE IS SQUARELY COVERED BY THE DECISION OF PUNJAB & HARYANA HIGH COURT IN T HE CASE OF CIT VS. MS. JAGRITI AGGARWAL REPORTED IN 339 ITR 610 (P&H) WHEREIN THE HONBLE HIGH COURT AFTER ANALYZING THE PROVISION OF SECTIONS 139(1), 139(4) AND 54 AND VARIOUS OTHER SIMILAR DECISIONS ON THIS POINT HAS DECIDED THIS ISSUE IN T HE FAVOUR OF THE ASSESSEE. 7. ON THE OTHER HAND, LD. DR STRONGLY RELIED UPON T HE FINDINGS OF THE AO AS WELL AS CIT(APPEALS). 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT FINDINGS OF THE CIT(APPEALS) AS WELL AS THE AO AND THE MATERIAL PLA CED ON RECORD. IT IS UNDISPUTED FACT THAT THE LONG TERM CAPITAL GAIN HAS ARISEN TO THE A SSESSEE ON A SALE OF FLAT ON 30.01.2008. AFTER INDEXATION, THE LONG TERM CAPITAL GAIN WAS WO RKED OUT AT RS. 18,90,218/-, AND THE ENTIRE AMOUNT OF SALE PROCEEDS WAS UTILIZED FOR TH E PURCHASE OF ANOTHER RESIDENTIAL FLAT FOR WHICH AGREEMENT WAS ENTERED ON 11.08.2008. THE SUM OF RS. 10,00,000/- FOR THE PURCHASE OF FLAT WAS PAID ON 28.07.2008 AND THE BAL ANCE SUM WAS GIVEN BETWEEN THE PERIOD 1.08.2008 TO 11.09.2008. IN THIS CASE THE DUE DATE OF FILING OF RETURN U/S 139(1) WAS 31 ST JULY 2008 AND THE ASSESSEE COULD HAVE FILED ITS RE TURN U/S 139(4) UPTO 31.03.2009. THE RETURN OF INCOME WAS FILED BY THE A SSESSEE ON 30.03. 2009. THE ASSESSING OFFICER AS WELL AS THE CIT(APPEALS) HAS T AKEN A VIEW THAT SINCE SUM OF RS. 10,00,000/- WAS PAID PRIOR TO 31 ST JULY 2008, THEREFORE, THE SAME CAN BE ALLOWED U/S 54 AND THE BALANCE SUM OF RS. 8,90,218/- WILL NOT BE A LLOWED AS THE SAME WAS NOT APPROPRIATED TILL THAT DATE. THE HONBLE HIGH COURT HAD AN OCCASION TO DEAL WITH THE SIMILAR ISSUE IN THE CASE OF CIT VS. MS. JAGRITI AG GARWAL (SUPRA), WHEREIN THEIR LORDSHIPS AFTER ANALYZING THE PROVISION OF SECTION 54(2) AND SECTION 139(1) REACHED TO THE FOLLOWING CONCLUSION. HAVING HEARD LEARNED COUNSEL FOR THE PARTIES, WE ARE OF THE OPINION THAT SUB- SECTION (4) OF SECTION 139 OF THE ACT IS, IN FACT, A PROVISION TO SUB-SECTION(1) OF SECTION 139 OF THE ACT. SECTION 139 OF THE ACT FIXE S THE DIFFERENT DATES FOR FILING THE RETURNS FOR DIFFERENT ASSESSEES. IN THE CASE OF THE ASSESSEE AS THE RESPONDENT, IT IS THE 31 ST DAY OF JULY OF THE ASSESSMENT YEAR IN TERMS OF CLA USE (C) OF EXPLANATION 2 TO SUB- 5 ITA 3986MUM 2012(AY-2008-09) SMT. RITA CHETA N NAIK VS. ITO SECTION (1) OF SECTION 139 OF THE ACT, WHEREAS SUB- SECTION (4) OF SECTION 139 PROVIDES FOR EXTENSION IN PERIOD OF DUE DATE IN CERTAIN CIRC UMSTANCES. IT READS AS UNDER: (4) ANY PERSON WHO HAS NOT FURNISHED A RET URN WITHIN THE TIME ALLOWED TO HIM UNDER SUB-SECTION (1), OR WITHIN THE TIME ALLOWED UNDER A NOTICE ISSUED UNDER SUB- SECTION(1) OF SECTION 142, MAY FURNISH THE RETURN F OR ANY PREVIOUS YEAR AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE R ELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASSESSMENT, WHICHEVER IS EARL IER: PROVIDED THAT WHERE THE RETURN RELATES T O A PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON THE 1 ST DAY OF APRIL, 1988, OR ANY EARLIER ASSESSMENT YEAR , THE REFERENCE TO ONE YEAR AFORESAID SHALL BE CONSTRUED AS A REFERENCE TO TWO YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. A REGARDING OF THE AFORESAID SUB-SECTION WOULD SHOW THAT IF A PERSON HAS NOT FURNISHED THE RETURN OF THE PREVIOUS YEAR WITHIN TH E TIME ALLOWED UNDER SUB-SECTION (1), I.E., BEFORE THE 31 ST DAY OF JULY OF THE ASSESSMENT YEAR, THE ASSESSEE C AN FILE RETURN BEFORE THE EXPIRY OF ONE YEAR FROM THE END O F THE RELEVANT ASSESSMENT YEAR. THE SALE OF THE ASSET HAVING TAKEN PLACE ON JANUARY 13, 2006, FALLING IN THE YEAR 2006-2007, THE RETURN COULD BE FILED BEFORE THE END OF THE RELEVANT ASSESSMENT YEAR 2007-08, I.E., MARCH 31, 2007. THUS, SUB-SECTION (4) OF SECTION 139 PROVIDES THE EXTENDED PERIOD OF LIMITATION AS AN EXCEPTION TO SU B-SECTION (1) OF SECTION 139 OF THE ACT. SUB-SECTION (4) IS IN RELATION TO THE TIME ALLOWED TO AN ASSESSEE UNDER SUB- SECTION (1) TO FILE RETURN . THEREFORE, SUCH PROVISION IS NOT AN INDEPENDENT P ROVISION, BUT RELATES TO TIME CONTEMPLATED UNDER SUB-SECTION (1) OF SECTION 139. THEREFORE, SUCH SUB-SECTION (4) HAS TO BE READ ALONG WITH SUB- SECTION (1). SIMILAR IS THE VIEW TAKEN BY THE DIVISION BENCH OF THE KARNATAKA AND GA UHATI HIGH COURTS IN FATIMA BAI [2009] 32 DTR 243 AND RAJESH KUMAR JALAN [2006] 286 ITR 274 (GAUHATI) RESPECTIVELY. IN VIEW OF THE ABOVE, WE FIND THAT DUE D ATE FOR FURNISHING THE RETURN OF INCOME AS PER SECTION 139(1) OF THE ACT IS SUBJECT TO THE EXTENDE D PERIOD PROVIDED UNDER SUB- SECTION (4) OF SECTION 139 OF THE ACT. CONSEQUENTLY, THE QUESTION OF LAW IS ANSW ERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. THUS, THE PRESENT APPEAL IS DISMISSED . THUS, THE DECISION OF KARNATAKA HIGH COURT AND GAUH ATI HIGH COURT WAS ALSO RELIED UPON AND WAS CATEGORICALLY HELD THAT SUB-SEC TION (4) OF SECTION 139 HAS TO BE READ ALONG WITH SUB-SECTION (1) AND THE DUE DATE MENTIONED IN 139(1) HAS TO BE TREATED AS EXTENDED PERIOD OF DUE DATE AS GIVEN U/S 139(4). 9. THUS, RESPECTIVELY FOLLOWING THE AFORESAID DECIS ION OF THE HIGH COURT, WE ALSO HOLD THAT DUE DATE FOR FURNISHING THE RETURN O F INCOME AS MENTIONED IN 6 ITA 3986MUM 2012(AY-2008-09) SMT. RITA CHETA N NAIK VS. ITO SECTION 139(1) IS SUBJECT TO EXTENDED PERIOD OF DUE DATE PROVIDED U/S 139(4). ACCORDINGLY, THE BALANCE CLAIM OF RS. 8,90,218/- HA S TO BE ALLOWED U/S 54, IN THIS CASE AS THE ASSESSEE HAS UTILIZED THE ENTIRE CAPITA L GAIN PRIOR TO THE DUE DATE OF FILING OF RETURN WHICH HEREIN IN THIS CASE WAS UPTO 31 ST MARCH 2009. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IS TR EATED AS ALLOWED. !3 % &! 4! )! 56 ORDER PRONOUNCED ON 10 TH DAY JULY, 2013 . ' 01' %3 10. 07. 2013 1 8 SD/- SD/- ( R. S. SYAL ) ( AMIT SHUKLA ) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI: % DATED : 10. 07.2013 % . /. PRAMOD KUMAR, PS ' ' ' ' ,! ,! ,! ,! :'! :'! :'! :'! / COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT 3. ; ) ( THE CIT(A) 4. ; / CIT - CONCERNED 5. <8 ,! % , , / DR, ITAT, MUMBAI 6. 8 & = / GUARD FILE '% '% '% '% / BY ORDER, > >> > / 5 5 5 5 ) ) ) ) (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI