Smt. Kalavathy Muthayya, CHENNAI V. ITO, CHENNAI

ITA 424/CHNY/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5127 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 05-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Assessee Lawyers: T VASUDEVAN
• Keywords: Revised return
• Section: 142(1); 139(5); 54; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI (BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT AND SHRI GEORGE MATHAN, JUDICIAL MEMBER) .. I.T.A. NO. 424/MDS/2010 ASSESSMENT YEAR : 2006-07 SMT. KALAVATHY MUTHAYYA, 72, 2 ND MAIN ROAD, (GROUND FLOOR), VGP LAYOUT, PALAVAKKAM, CHENNAI 600 041. PAN : AAAPM5194M (APPELLANT) V. THE INCOME TAX OFFICER, SALARY WARD II(2), CHENNAI 600 034. (RESPONDENT) APPELLANT BY : SHRI T. VASUDEVAN RESPONDENT BY : SHRI P.B. S EKARAN O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-IV, CHENNAI, I N APPEAL NO. CIT(A)-IV/CHE/138/08-09 DATED 6.1.2010, FOR THE ASS ESSMENT YEAR 2006-07. I.T.A. NO. 424/MDS/10 2 2. SHRI T. VASUDEVAN, ADVOCATE, REPRESENTED ON BEHA LF OF THE ASSESSEE AND SHRI P.B. SEKARAN, CIT-DR, REPRESENTED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY THE LEARNED A.R. THAT THE AS SESSEE IS AN INDIVIDUAL. IT WAS A SUBMISSION THAT THE ASSESSEE HAD 1/3 RD RIGHT IN A LAND MEASURING 6763 SQ.FT. DURING THE RELEVANT ASS ESSMENT YEAR, THE ASSESSEE HAD SOLD HER 1/3 RD SHARE IN 5263 SQ. FT. AS ALSO BUILDING OF 1300 SQ. FT. THE ASSESSEE HAD CLAIMED EXEMPTION UN DER SECTION 54 OF INCOME-TAX ACT, 1961 (HEREINAFTER CALLED THE AC T) ON AN AMOUNT OF ` 36,00,000/- BEING 1/3 RD SHARE OF CAPITAL GAINS THAT WAS INVESTED IN CAPITAL GAINS ACCOUNT SCHEME, 1988 OF INDIAN BANK. IT WAS A SUBMISSION THAT THE PROPERTY HAD BEEN SOLD ON 28.2. 2006 AND THE SALE CONSIDERATION WAS DEPOSITED IN ASSESSEES S.B. A/C ON 6.3.2006. IT WAS A FURTHER SUBMISSION THAT ON 14.6.2006, THE SAID AMOUNT WAS DEPOSITED IN FIXED DEPOSIT. IT WAS A SUBMISSION TH AT ON 17.8.2006, THE AMOUNT WAS DEPOSITED IN THE CAPITAL GAINS ACCOUNT S CHEME, 1988. IT WAS A SUBMISSION THAT THE A.O. DENIED THE CLAIM OF DEDUCTION UNDER SECTION 54 ON THE GROUND THAT THE TIME FOR INVESTIN G IN THE CAPITAL GAINS SCHEME HAD EXPIRED ON 31.7.2006 AND AS THE DE POSIT WAS MADE ONLY ON 17.8.2006, THE DEPOSIT WAS LATE BY 17 DAYS AND I.T.A. NO. 424/MDS/10 3 CONSEQUENTLY HE DENIED THE DEDUCTION UNDER SECTION 54 OF THE ACT. IT WAS A FURTHER SUBMISSION THAT THE ASSESSEE HAD FILE D HER RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR ON 15 TH MARCH, 2007. IT WAS A SUBMISSION THAT UNDER SIMILAR CIRCUMSTANCES, HON' BLE GAUHATI HIGH COURT IN THE CASE OF CIT V. RAJESH KUMAR JALAN (200 6) 286 ITR 274 (GAUHATI) HAD HELD THAT ASSESSEE WAS ENTITLED TO DE DUCTION UNDER SECTION 54 OF THE ACT. 4. IN REPLY, THE LEARNED D.R. SUBMITTED THAT THERE WAS A VIOLATION OF PROVISIONS OF SECTION 54 OF THE ACT IN SO FAR AS TH ERE WAS A DELAY OF 17 DAYS IN DEPOSITING THE ASSESSEES SHARE OF SALE CONSIDERATION. IT WAS A SUBMISSION THAT THE PROVISIONS OF SECTION 54( 2) OF THE ACT CLEARLY SPECIFIES THAT THE DEPOSIT MUST BE MADE IN ANY CASE NOT LATER THAN THE DUE DATE APPLICABLE IN THE CASE OF AN ASSE SSEE FOR FURNISHING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTI ON 139. IT WAS A SUBMISSION THAT THE DUE DATE FOR FILING THE RETURN IN THE ASSESSEES CASE EXPIRED ON 31.7.2006 AND CONSEQUENTLY AS THERE WAS VIOLATION OF PROVISIONS OF SECTION 54(2) OF THE ACT, DEDUCTIO N UNDER SECTION 54 OF THE ACT COULD NOT BE GRANTED TO THE ASSESSEE. H E VEHEMENTLY SUPPORTED THE ORDERS OF THE A.O. AND THE CIT(APPEAL S). I.T.A. NO. 424/MDS/10 4 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE DECISION OF HON'BLE GAUHATI HIGH COURT IN THE CASE OF RAJESH KUMAR JALAN (SUPRA) CLEARLY SHOWS THAT HON'BLE GAUHATI HI GH COURT HELD AS FOLLOWS:- DISMISSING THE APPEAL, THAT FROM A READING OF SUB- SECTION (2) OF SECTION 54 OF THE ACT IT IS CLEAR THAT ONLY S ECTION 139 HAS BEEN MENTIONED THEREIN, IN THE CONTEXT THAT THE UNU TILISED PORTION OF THE CAPITAL GAINS ON THE SALE OF PROPERT Y USED FOR RESIDENCE SHOULD BE DEPOSITED BEFORE THE DATE OF FU RNISHING THE RETURN OF INCOME UNDER SECTION 139 OF THE INCOME-TA X ACT, 1961. SECTION 139 CANNOT MEAN ONLY SECTION 139(1) BUT IT M EANS ALL SUB- SECTIONS OF SECTION 139. UNDER SUB-SECTION (4) OF SECTION 139 ANY PERSON WHO HAS NOT FURNISHED A RETURN WITHIN THE TIME ALLOWED TO HIM UNDER SUB-SECTION (1) OF SECTION 142 MAY FURNISH THE RETURN FOR ANY PREVIOUS YEAR AT ANY TIME BEFORE TH E EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASSESSMENT WHICHEVER IS EARLI ER. THE ASSESSEES CASE WAS THAT SINCE THE RETURN FOR THE A SSESSMENT YEAR 1996-97 COULD BE FURNISHED BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFO RE THE COMPLETION OF THE ASSESSMENT, WHICHEVER IS EARLIER, UNDER SUB- SECTION (4), HE WAS ENTITLED TO FULFIL THE CONDITIO NS FOR EXEMPTION UNDER SECTION 54 UPTO MARCH 30, 1998. THE ASSESSEE WAS ENTITLED TO EXEMPTION UNDER SECTION 54 ON THE ENTIR E CAPITAL GAINS ON THE SALE OF HIS HOUSE PROPERTY. 6. IN THE SAID DECISION, HON'BLE GAUHATI HIGH COURT HAS CATEGORICALLY HELD THAT THE PROVISIONS OF SECTION 5 4(2) REFERS SECTION 139 AND IT MEANS NOT ONLY SECTION 139(1) BUT ALL TH E SUB-SECTIONS OF SECTION 139. IT IS NOTICED THAT THIS DECISION IS T HE ONLY DECISION ON THIS ISSUE AND THERE IS NO CONTRARY DECISION ON THIS ISS UE WHICH HAS BEEN I.T.A. NO. 424/MDS/10 5 PLACED BEFORE US. IN THE CIRCUMSTANCES, BEING BOUN D BY THE PRINCIPLE OF JUDICIAL DISCIPLINE AND BY RESPECTFULLY FOLLOWIN G THE DECISION OF HON'BLE GAUHATI HIGH COURT, THE A.O. IS DIRECTED TO GRANT THE ASSESSEE THE BENEFIT OF DEDUCTION UNDER SECTION 54 OF THE ACT AS CLAIMED. WE MAY ALSO REFER TO THE PROVISIONS OF SE CTION 139(5) OF THE ACT. IT SPECIFIES THAT IF A RETURN HAS BEEN FURNIS HED UNDER SECTION 139(1) OR IN PURSUANT TO NOTICE UNDER SECTION 142(1 ), THEN AN ASSESSEE CAN FILE A REVISED RETURN. THIS IS NOT SO IN THE CASE OF RETURN FILED UNDER SECTION 139(4) OF THE ACT. A PERUSAL O F SECTION 142(1) OF THE ACT SHOWS THAT FOR THE PURPOSE OF MAKING AN ASS ESSMENT UNDER THE ACT, AN A.O. MAY SERVE ON ANY PERSON WHO HAS MADE A RETURN UNDER SECTION 139 OR IN WHOSE CASE THE TIME ALLOTTE D UNDER SECTION 139(1) FOR FURNISHING THE RETURN HAS EXPIRED, A NOT ICE REQUIRING HIM, ON A DATE TO BE THEREIN SPECIFIED TO FURNISH A RETURN OR TO PRODUCE OR CAUSED TO BE PRODUCED ACCOUNTS OR DOCUMENTS THAT A A.O. MAY REQUIRE OR FURNISH IN WRITING TO VERIFY THE PRESCRI BED MEANS OF INFORMATION AS THE A.O. MAY REQUIRE. THUS WHAT IS NOTICED IS THAT IF A NOTICE UNDER SECTION 142(1) STANDS SERVED ON THE AS SESSEE, THE RETURN FILED BY THE ASSESSEE WOULD TAKE A CHARACTER OF RETURN UNDER SECTION 139(1) ESPECIALLY IN VIEW OF THE PROVISIONS OF SECTION 139(5) OF THE ACT. IF THIS IS KEPT IN MIND, THE NOTICE UN DER SECTION 142(1) OF I.T.A. NO. 424/MDS/10 6 THE ACT IN THE PRESENT CASE HAS BEEN ISSUED ON 19.6 .2008 CONSEQUENT TO THE RETURN FILED BY THE ASSESSEE ON 1 5.3.2007, WOULD TAKE A CHARACTER OF RETURN FILED UNDER SECTION 139( 1) AND AS THE ASSESSEE HAS COMPLIED WITH THE PROVISIONS OF SECTIO N 54(2) IN VIEW OF THE ISSUANCE OF NOTICE UNDER SECTION 142(1) OF THE ACT, THE ASSESSEE WOULD BE ENTITLED TO CLAIM DEDUCTION UNDER SECTION 54 OF THE ACT. WE MAY SPECIFICALLY MENTION HERE THAT THE WORD USED IN SECTION 142(1) IS MAY. IT IS A LIBERTY GIVEN BY THE A.O. TO THE AS SESSEE AND LIBERTY HAVING BEEN GRANTED BY THE A.O. CANNOT STAND WITHDR AWN. IN THE CIRCUMSTANCES, THE APPEAL IS ALLOWED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON THE FOURTH DAY OF MAY, 2011. SD/- SD/- (DR. O.K. NARAYANAN) ( GEORGE MATHAN) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 4 TH MAY, 2011. KRI. COPY TO: APPELLANT/RESPONDENT/CIT(A)-IV, CHENNAI/ CIT, TDS, CHENNAI/D.R./GUARD FILE