Anil Verma, Chandigarh V. DCIT, Chandigarh

ITA 929/CHANDI/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9913 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-09-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 30-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause; Revised return
• Section: 147; 148; 54; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L.KARWA, VICE PRESIDENT AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO.929/CHD/2004 (ASSESSMENT YEAR : 1999-2000) MRS.PROTIMA SEN GUPTA, VS. THE A.C.I.T., # 250, SECTOR 7, PANCHKULA CIRCLE, PANCHKULA. PANCHKULA. PAN: ABXPG0874A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : SHRI SUSHIL KUMAR, DR DATE OF HEARING : 05.05.2016 DATE OF PRONOUNCEMENT : 14.06.2016 O R D E R PER RANO JAIN, A.M . : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), PANCHKULA DATED 26.7.2004, RELATING TO ASSESSMENT YEAR 1999-2000, PASSED UNDER SECTION 250 (6) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT), 2. BRIEFLY, THE FACTS RELEVANT TO THE EXTENT OF ADJUDICATION OF THIS APPEAL ARE THAT THE ASSESSEE F ILED HER RETURN OF INCOME AS ON 28.6.1999 DECLARING AN INCOM E OF RS.15,66,839/- INCLUSIVE OF THE CAPITAL GAIN OF RS.5,10,000/-, WHICH WAS SUBSEQUENTLY REVISED AS ON 2 27.6.2000, DECLARING AN INCOME OF RS.10,68,839/- INCLUSIVE OF CAPITAL GAIN OF RS.6250/-. THEREAFTER THE CASE WAS REOPENED UNDER SECTION 147 OF THE ACT AFTER REC ORDING REASONS. IT WAS OBSERVED BY THE ASSESSING OFFICER THAT DURING THE YEAR, THE ASSESSEE HAD SOLD PLOT NO.2 IN THE BURMAH SHELL COOPERATIVE HOUSING SOCIETY LTD., RAMA KRISHNA PURAM, SECTOR 13, RING ROAD, NEW DELHI, NOW KNOWN AS ARADHANA COLONY, SECTOR 13, R.K. PURAM, NE W DELHI, MEASURING 370 SQ.YDS. FOR A SUM OF RS.2,60,00,000/-. IN THE REVISED RETURN, THE CAPI TAL GAIN WAS SHOWN AT RS.6250/-. AGAINST THE INVESTMENT OF RS.25 LACS ON HOUSE NO.250, SECTOR 7, PANCHKULA, THIS INVESTMENT WAS TAKEN AT RS.31 LACS IN THE REVISED R ETURN. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS CLAIMED EXEMPTION OF CAPITAL GAIN UNDER SECTION 54 OF THE ACT TO THE TUNE OF RS.31 LACS THAT THIS AMOUNT HAS BEEN SPENT BY HER ON CONSTRUCTION OF HOUSE AT PANCHKULA, WHILE IN THE ORIGINAL RETURN , THE INVESTMENT WAS SHOWN A T RS.25 LACS. TAKING INTO CONSIDERATION CERTAIN OTHER FACT S, THE ASSESSING OFFICER WORKED OUT THE CAPITAL GAIN AT RS.5,10,000/- ON THE PLOT, WHICH WAS SOLD BY THE ASSESSEE. 3. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT (APPEALS) RAISING THE VARIOUS GROUNDS AS TO THE LEG ALITY OF REOPENING UNDER SECTION 147 OF THE ACT AND ALSO ON THE FACTS. THE CIT (APPEALS) DISMISSED THE LEGAL GROUN D OF THE ASSESSEE AND GAVE PART RELIEF ON THE MERITS OF THE CASE. ON FURTHER APPEAL BEFORE THE I.T.A.T., THE I.T.A.T. HELD THE 3 REOPENING UNDER SECTION 148 TO BE INVALID AND QUASH ED THE ORDER OF THE ASSESSING OFFICER AND PREFERRED NO T TO ADJUDICATE THE ISSUES ON MERIT. THE DEPARTMENT CA RRIED THE MATTER BEFORE THE HIGH COURT. THE HON'BLE HIGH COURT IN ITA NO.589 OF 2008 (O&M) DATED 19.8.2013 HELD TH E REOPENING TO BE VALID AND SENT THE MATTER BACK TO T HE I.T.A.T. TO ADJUDICATE THE APPEAL IN ACCORDANCE WIT H LAW. 4. IN VIEW OF THIS, THE PRESENT APPEAL WAS FIXED F OR HEARING BEFORE US. SINCE GROUND NOS.1, 2 AND 3 HAV E BEEN DECIDED BY THE HIGH COURT, WHILE THE ONLY RELEVANT GROUND TO BE DECIDED BY US IS GROUND NO.4, WHICH READS AS UNDER: 4. THAT THE LD, COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN UPHOLDING THAT THE PRECISIONS OF SEC TION 54(2) OF THE I.T. ACT 1961 ARE ATTRACTED IN THE CASE O F THE APPELLANT WHILE THE PROVISIONS ARE NOT ATTRACTED IN VIEW OF THE TACT THAT THE APPELLANT WAS PREVENTED B Y A REASONABLE CAUSE FROM DEPOSITING THE AMOUNT UNDER THE CAPITAL GAINS ACCOUNT SCHEME AND AS SUCH, THE RELIEF SOUGHT U/S 54 OF THE ACT SHOULD HAVE BEEN ALLOWED. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ASSESSEE HAD INCURRED AN AMOUNT OF RS.31 LACS ON CONSTRUCTION OF NEW HOUSE IN PANCHKUL A ON WHICH SHE HAS SOUGHT EXEMPTION UNDER SECTION 54 OF THE ACT. THE SAID AMOUNT WAS INVESTED BEFORE THE DATE OF FILING OF REVISED RETURN BY HER. THE ONLY REASON FOR NOT ALLOWING THIS EXEMPTION TO THE EXTENT OF RS.31 LACS BY THE ASSESSING OFFICER WAS THAT THE ASSESSEE HAS NOT OPE NED ANY CAPITAL GAIN ACCOUNT FOR THE SUM OF RS.31 LACS AND ONLY AN AMOUNT OF RS.3,86,482/- HAS BEEN SPENT BY H ER 4 BEFORE FILING OF HER RETURN OF INCOME. RELIANCE WA S PLACED ON THE JUDGMENT OF THE HON'BLE JURISDICTIONAL PUNJA B & HARYANA HIGH COURT IN THE CASE OF CIT VS. JAGRUTI AGARWAL (2011) 339 ITR 610 (P&H) TO THE EFFECT THAT THE DATE OF FURNISHING RETURN AS PRESCRIBED UNDER SECT ION 54 OF THE ACT CAN BE THE DATE UNDER SECTION 139(4) OF THE ACT AND THE AMOUNT USED FOR SPECIFIC PURPOSE IS EXEMPT UNDER SECTION 54 OF THE ACT. 6. THE LEARNED D.R. RELIED ON THE ORDER OF THE ASSESSING OFFICER AS WELL AS THE CIT (APPEALS) AND HE FURTHER STATED THAT AS PER SECTION 54(2) OF THE ACT , FOR CLAIMING EXEMPTION ON THE AMOUNTS WHICH WERE NOT ACTUALLY UTILIZED BEFORE FILING OF THE RETURN, THE DEPOSIT OF THE SAME IN THE CAPITAL GAIN ACCOUNT IS A MANDATORY CONDITION AND NOT DOING THE SAME ON THE BASIS OF A REASONABLE CAUSE IS NOT A TENABLE ARGUMENT. 7. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHO RITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECO RD. FROM THE PERUSAL OF THE GROUND OF APPEAL, WE SEE TH AT THE ONLY ISSUE TO BE DECIDED BY US IS WHETHER THE EXEMP TION UNDER SECTION 54 OF THE ACT IS TO BE ALLOWED TO THE ASSESSEE ON THE AMOUNT OF INVESTMENT MADE BY HER BE FORE THE DATE OF FILING OF ORIGINAL RETURN, SINCE IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS NOT DEPOSITED ANY AMOUNT IN ANY CAPITAL GAIN ACCOUNT. 5 8. IT HAS BEEN HELD IN THE JUDGMENT OF GAUHATI HIGH COURT IN THE CASE OF CIT VS. RAJESH KUMAR JAL AN, REPORTED IN 286 ITR 274 (GAU) ON THE BACKGROUND OF SIMILAR SET OF FACTS AS UNDER: 6. FROM A PLAIN READING OF SUB-SECTION (2) OF SECTION 54 OF THE INCOME-TAX ACT, 1961, IT IS CLEAR THAT ONLY SECTION 139 OF THE INCOME-TAX ACT, 1961, IS MENTIONED IN SECTION 54(2) IN THE CONTEXT THAT THE UNUTILISED PORTION OF THE CAPITAL GA IN ON THE SALE OF PROPERTY USED FOR RESIDENCE SHOULD BE DEPOSITE D BEFORE THE DATE OF FURNISHING THE RETURN OF THE INCOME-TAX UNDER SECTION 139 OF THE INCOME-TAX ACT. SECTION 139 OF THE INCOME- TAX ACT, 1961, CANNOT BE MEANT ONLY SECTION 139(1) BUT IT MEANS ALL SUB-SECTIONS OF SECTION 139 OF THE INCOME-TAX ACT, 1961. UNDER SUB-SECTION (4) OF SECTION 139 OF THE INCOME-TAX ACT 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 THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSE SSMENT YEAR OR BEFORE THE COMPLETION OF THE ASSESSMENT YEAR WHICHEVER IS EARLIER. SUCH BEING THE SITUATION, IT IS THE CASE OF THE RESPONDENT/ASSESSEE THAT THE RESPONDENT/ASSESSE E COULD FULFIL THE REQUIREMENT UNDER SECTION 54 OF THE INCOME-TAX ACT FOR EXEMPTION OF THE CAPITAL GAIN FROM BEING CHARGED TO INCO ME- TAX ON THE SALE OF PROPERTY USED FOR RESIDENCE UP TO MARCH 30, 1998, INASMUCH AS THE RETURN OF INCOME-TAX FOR THE ASSESSMENT YEAR 1997-98 COULD BE FURNISHED BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSE SSMENT YEAR OR BEFORE THE COMPLETION OF THE ASSESSMENT WHIC HEVER IS EARLIER UNDER SUB-SECTION (4) OF SECTION 139 OF THE INCOME-TAX ACT, 1961. 9. A JUDGMENT OF THE KARNATAKA HIGH COURT IN THE CASE OF FATIMA BAI VS. ITO (2009) 32 DTR (KAR) 243 IS 6 ALSO RELEVANT FOR THE ISSUE IN QUESTION, WHEREBY IT HAS BEEN HELD AS UNDER : 11. THE EXTENDED DUE DATE UNDER S. 139(4) WOULD BE 3 1ST MARCH, 1990. THE ASSESSEE DID NOT FILE THE RETURN WITHIN THE EXTENDED DUE DATE, BUT FILED THE RETURN ON 27TH FEB., 2000. HOWEVER, THE ASSESSEE HAD UTILISED THE ENTIRE CAPITAL GAINS BY PURCHASE OF A HOUSE PROPER TY WITHIN THE STIPULATED PERIOD OF S. 54(2) I.E., B EFORE THE EXTENDED DUE DATE FOR RETURN UNDER S.139.THE ASSESSEE TECHNICALLY MAY HAVE DEFAULTED IN NOT FILING THE RETURN UNDER S. 139(4). BUT, HOWEVER, UTILIZED T HE CAPITAL GAINS FOR PURCHASE OF PROPERTY BEFORE THE EXTENDED DUE DATEUNDERS.139(4).THE CONTENTION OF TH E REVENUE THAT THE DEPOSIT IN THE SCHEME SHOULD HAVE BEEN MADE BEFORE THE INITIAL DUE DATE AND NOT THE EXTENDED DUE DATE IS AN UNTENABLE CONTENTION. 10. FOLLOWING THE ABOVE TWO JUDGMENTS, A JUDGMENT OF THE JURISDICTIONAL PUNJAB & HARYANA HIGH COURT I S ALSO DELIVERED IN THE CASE OF JAGRITI AGGARWAL (SUPRA), RELEVANT PARAS OF WHICH READ AS UNDER : 12. THE SALE OF THE ASSET HAVING TAKEN PLACE ON 13 TH JAN., 2006, FALLING IN THE PREVIOUS (SIC ASSESSMEN T) YEAR 2006-07, THE RETURN COULD BE FILED BEFORE THE END O F RELEVANT ASST. YR. 2007-08 (SIC2006-07) I.E. 31ST MARCH, 2007. THUS, SUB-S. (4) OF S.139 PROVIDES EXTENDED P ERIOD OF LIMITATION AS AN EXCEPTION TO SUB-S. (1) OF S. 1 39 OF THE ACT. SUB-S. (4) IS IN RELATION TO THE TIME ALLOWED TO AN ASSESSEE UNDER SUB-S. (1) TO FILE RETURN. THE REFORE, SUCH PROVISION IS NOT AN INDEPENDENT PROVISION, BUT RELATES T O TIME CONTEMPLATED UNDER SUB-S. (1) OF S. 139. THEREFORE, SUCH SUB-S. (4) HAS TO BE READ ALONG WITH SUB-S. (1). SI MILAR IS THE VIEW TAKEN BY THE DIVISION BENCH OF KARNATAKA AND GAUHATI HIGH COURTS IN FA TIMA BAI 7 AND RAJESH KUMAR JALAN CASES (SUPRA) RESPECTIVELY. 13. IN VIEW OF THE ABOVE, WE FIND THAT DUE DATE FOR FURNISHING THE RETURN OF INCOME AS PER S. 139(1) OF THE ACT IS SUBJECT TO THE EXTENDED PERIOD PROVIDE D UNDER SUB-S. (4) OF S. 139 OF THE ACT. 11. RESPECTFULLY FOLLOWING THE JUDGMENTS OF THE HON'BLE HIGH COURTS, WE ARE INCLINED TO HOLD THE IS SUE IN FAVOUR OF THE ASSESSEE. 12. THE GROUND NO.5 IS CONSEQUENTIAL IN NATURE AND GROUND NO.6 IS GENERAL, THEREFORE, NEED NO ADJUDICA TION. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF JUNE, 2016. SD/- SD/- (H.L.KARWA) (RANO JAIN) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 14 TH JUNE, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/THE CIT/THE D R. ASSISTANT REGISTRAR, ITAT, CHANDIGARH