SMT. RENU JAIN, NEW DELHI V. ITO, WARD 5(2), JAIPUR

ITA 96/JPR/2020

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3040 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 22-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Period of limitation; Question of law; Benefit of exemption; Set aside; Capital Gains
• Section: 143(3); 54B; 54F; 274; 139(1); 139(4); 13; 148; 54; 263; 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 96/JP/2020 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 RENU JAIN G-13/5, IIND FLOOR, MALVIYA NAGAR, NEW DELHI 110017. CUKE VS. THE ITO, WARD-5(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABFPJ 7560 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI AKSHAY SHAH (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : MISS CHANCHAL MEENA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 03/03/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 06/03/2020 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A)-II, JAIPUR DATED 29.11.2019 FOR THE ASSESSME NT YEAR 2011-12 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING GROUN D OF APPEAL:- 1. THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE F ACTS OF THE CASE IN UPHOLDING THE ADDITION OF INR 17,09,798/- WITHOU T CONSIDERING AND APPRECIATING THE INTENT AND PURPOSE OF THE PROV ISIONS OF SECTION 54F OF THE ACT. THE ADDITION SO CONFIRMED B Y THE CIT(A), BEING TOTALLY CONTRARY TO THE PROVISIONS OF LAW AND FACTS OF THE CASE, THEREFORE THE SAME MAY BE DELETED. ITA NO. 96/JP/2020 RENU JAIN VS. ITO 2 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SMENT IN THIS CASE WAS COMPLETED U/S 143(3) R.W.S. 147 OF THE ACT DATE D 08.10.2016. ON THE BASIS OF INFORMATION RECEIVED DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2013-14, THE NO TICE U/S 148 OF THE ACT WAS ISSUED ON 27.01.2016 STATING THAT THE ASSES SEE HAS WRONGLY CLAIMED DEDUCTION U/S 54F OF THE ACT AS THE ASSESSE E HAS DEPOSITED A SUM OF RS. 22,50,000/- UNDER CAPITAL GAIN ACCOUNT S CHEME ON 03.12.2011 AFTER DUE DATE OF FILING OF RETURN OF IN COME I.E, 31.07.2011, THEREFORE, THE INCOME OF THE ASSESSEE HAS ESCAPED A SSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT. IN RESPONSE, THE ASSESSEE SUBMITTED HIS RETURN OF INCOME ON 24.03.2016 AND TH EREAFTER, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE AS SESSMENT WAS COMPLETED WHEREIN THE ASSESSING OFFICER HAS DENIED THE CLAIM OF THE ASSESSEE U/S 54F OF THE ACT AMOUNTING TO RS. 17,09, 798/-. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEA L BEFORE THE LD. CIT(A) WHO HAS SUSTAINED THE ADDITION AND AGAINST T HE SAID FINDINGS, THE ASSESSEE IS IN APPEAL BEFORE US. 3. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT THE ASSESSEE HAS EARNED LONG TERM CAPITAL GAIN OF RS. 1 7,09,798 FROM SALE OF PLOTS AT A CONSIDERATION OF INR 22,50,000/- ON 10 FEBRUARY 2011. THE SALE CONSIDERATION OF THE PLOTS SOLD WAS RECEIVED BY THE ASSESSEE ON 18 &19 JANUARY 2011. IN ORDER TO AVAIL BENEFIT OF DEDUCTION U/S 54F OF THE ACT, THE ASSESS EE HAS SET ASIDE THE ENTIRE FUNDS FOR PURCHASE OF RESIDENTIAL PROPER TY BY OPENING AN FDR WITH BANK OF RAJASTHAN (NOW ICICI BANK) ON 20 J ANUARY 2011 I.E. WELL BEFORE THE DUE DATE OF FILING THE RETURN UNDER SECTION 139 ITA NO. 96/JP/2020 RENU JAIN VS. ITO 3 OF THE ACT FOR AY 2011-12. LATER ON, THE APPELLANT CAME TO KNOW THAT AS PER THE PROVISIONS OF SECTION 54F, THE FDR IS REQUIRED TO BE MADE UNDER CAPITAL GAIN ACCOUNT SCHEME ('CGAS'). TH EREFORE, IN ORDER TO RECTIFY THE PROCEDURAL MISTAKE, THE APPELL ANT ON 03 DECEMBER 2011 EN-CASHED THE FDR WITH ICICI BANK AND DEPOSITED SUCH AMOUNT ON VERY SAME DAY INTO CAPITAL GAINS SCH EME FDR WITH CANARA BANK WITHOUT UTILIZING THE SAME FOR ANY OTHE R PURPOSE. 4. IT WAS SUBMITTED THAT THE AO DISALLOWED THE DEDU CTION CLAIMED UNDER SECTION 54F OF THE ACT STATING THAT T HE APPELLANT HAVE DEPOSITED THE AMOUNT UNDER CAPITAL GAINS SCHEM E AFTER THE DUE DATE OF FILING RETURN OF INCOME AND THE SAME WA S UPHELD BY THE LD. CIT(A). IT WAS SUBMITTED THAT WHILE MAKING SUCH ADDITION, THE LD. AO AND LD. CIT(A) HAVE NOT APPRECIATED THE FOLLOWING FACTS AND LEGAL INTERPRETATION OF VARIOUS JUDICIAL PRONOUNCEM ENTS: THE LD. CIT(A) HAVE FAILED IN NOT CONSIDERING THE E SSENCE OF THE JUDGMENT PRONOUNCED BY THE JURISDICTIONAL TRIBU NAL IN ONE OF THE SIMILAR ISSUE IN CASE OF GOVERDHAN SINGH SHEKHAWAT VS. ITO WARD 6(1), JAIPUR (2019) 102 TAXMANN.COM 50 THEREBY VIOLATING THE DOCTRINE OF PRECEDENT; BOTH THE AUTHORITIES HAVE FAILED IN CONSIDERING AND APPRECIATING THE FACT THAT THE ENTIRE FUNDS HAVE BE EN UTILIZED ONLY FOR PURCHASE OF RESIDENTIAL HOUSE AND HAVE NOT BEEN UTILIZED FOR ANY OTHER PURPOSE; BOTH THE AUTHORITIES HAVE FAILED IN CONSIDERING AND APPRECIATING THE INTENT AND PURPOSE OF THE PROVISIONS OF SECTION 54F OF THE ACT; ITA NO. 96/JP/2020 RENU JAIN VS. ITO 4 THERE WAS NO MALA FIDE INTENTION ON THE PART OF APP ELLANT TO HAVE DEPOSITS THE AMOUNT UNDER A FDR A/C AND NOT UNDER C GAS A/C. IT WAS JUST A BONA FIDE MISTAKE WHICH WAS CORRECTED AS SOON AS IT CAME TO THE KNOWLEDGE OF THE ASSESSEE; THE WHOLE IDEA OF OPENING A CAPITAL GAINS ACCOUNT S CHEME IS TO DELINEATE THE FUNDS FROM OTHER FUNDS REGULARLY M AINTAINED BY THE ASSESSEE AND HAS TO ENSURE THAT THE BENEFIT WHICH HAS BEEN AVAILED BY AN ASSESSEE BY DEPOSITING THE AMOUN T IN THE SAID ACCOUNT IS ULTIMATELY UTILIZED FOR THE PURPOSE S FOR WHICH THE EXEMPTION HAS BEEN CLAIMED, I.E., FOR PURCHASE OF THE RESIDENTIAL HOUSE. THE APPELLANT HAVE SOLELY UTILIZ ED SUCH FUNDS FOR PURCHASE OF RESIDENTIAL PROPERTY AND THE SAME HAS NOT BEEN REBUTTED BY THE LD. AO; THE APPELLANT HAVE DULY DISCLOSED SUCH INFORMATION IN THE RETURN OF INCOME FILED; IT IS A WELL SETTLED LAW THAT AN INCENTIVE PROVISIO N HAS TO BE CONSTRUED LIBERALLY WITH THE INTENT OF LAW. 5. IT WAS FURTHER SUBMITTED THAT THE JAIPUR BENCH O F THE TRIBUNAL IN THE CASE OF GOVERDHAN SINGH SHEKHAWAT VS. ITO WARD 6(1), JAIPUR REPORTED IN 102 TAXMANN.COM 50 HAS HELD AS UNDER: 'THUS, IT IS VIEWED THAT THE ASSESSEE'S CLAIM WILL QUALIFY FOR EXEMPTION UNDER SECTION 54F AS HE HAS, IN SUBSTANCE , COMPLIED WITH THE REQUIREMENTS OF SUB-SECTION (4) F OR THE ITA NO. 96/JP/2020 RENU JAIN VS. ITO 5 IMPUGNED ASSESSMENT YEAR AS THE WHOLE OF THE COMPEN SATION HAS BEEN DEPOSITED IN THE SAID BANK ACCOUNT AND THE WITHDRAWALS ARE LIMITED TO PURCHASE OF PLOT OF LAND AND CONSTRUCTION THEREOF AND ARE MONITORED CLOSELY BY T HE ASSESSEE HIMSELF. IN THE INSTANT CASE, EVEN THOUGH THE SAVING BANK AC COUNT TECHNICALLY SPEAKING IS NOT A CAPITAL GAIN ACCOUNT, THE ESSENCE AND SPIRIT OF OPENING AND MAINTAINING A SEPARATE CA PITAL GAIN ACCOUNT HAS BEEN ACHIEVED AS WELL AS DEMONSTRATED B Y THE ASSESSEE. THEREFORE, MERELY BECAUSE THE SAVING BANK ACCOUNT IS TECHNICALLY NOT A CAPITAL GAINS ACCOUNT, IT CANNOT BE SAID THAT THERE IS VIOLATION OF THE PROVISIONS OF SUB-SECTION (4) IN TERMS OF NOT OPENING A CAPITAL GAINS ACCOUNT SCHEME. THE REV ENUE HAS NOT DISPUTED THAT THE DEPOSITS IN THE SAID ACCOUNT ARE FROM THE COMPENSATION RECEIVED BY THE ASSESSEE FROM COMPULSO RY ACQUISITION OF HIS LAND BY RIICO AND THE REVENUE HA S EQUALLY NOT DISPUTED THAT THERE ARE ANY WITHDRAWALS OTHER THAN FOR THE PURPOSES OF PURCHASE OF PLOT OF LAND AND CONSTRUCTI ON THEREON.' MOREOVER, THE HON'BLE TRIBUNAL MEMBERS DISCUSSED TH E SCHEME THAT HAS BEEN FRAMED BY THE CENTRAL GOVERNMENT REFE RRED TO AS CAPITAL GAINS ACCOUNTS SCHEME, 1988 WHICH HAS BEEN NOTIFIED FOR THE PURPOSES OF AVAILING EXEMPTION UNDER SECTION 54 F(4) AND AT PARA 40 DISCUSSED ABOUT THE INTENT OF THE SUB-SECTI ON 4 OF SECTION 54F AS UNDER:- ITA NO. 96/JP/2020 RENU JAIN VS. ITO 6 'THE WHOLE PURPOSE AND SCHEME OF DEPOSIT SO ENVISAG ED IS THUS TO CLOSELY MONITOR THE UTILISATION OF THE AMOUNT FO R THE PURPOSES OF PURCHASE OR CONSTRUCTION OF THE RESIDENTIAL HOUS E. THE WHOLE IDEA IS TO DELINEATE THE FUNDS FROM OTHER FUNDS REG ULARLY MAINTAINED BY THE ASSESSEE AND HAS TO ENSURE THAT T HE BENEFIT WHICH HAS BEEN AVAILED BY THE ASSESSEE BY DEPOSITIN G THE AMOUNT IN THE SAID ACCOUNT IS ULTIMATELY UTILIZED F OR THE PURPOSES FOR WHICH THE EXEMPTION HAS BEEN CLAIMED, I.E., FOR PURCHASE OR CONSTRUCTION OF A RESIDENTIAL HOUSE' 6. IT WAS ACCORDINGLY SUBMITTED THAT THE ASSESSEE H AS FOLLOWED THE PROVISIONS IN ITS TRUE SPIRIT AND HAVE KEPT THE INTENT OF SECTION 54F FOR AVAILING THE DEDUCTION AS: A. THE SALE PROCEEDS WAS KEPT SEPARATELY BY OPENING AN FDR; B. LATER ON, WHEN IT CAME TO THE NOTICE OF THE APPELLA NT THAT THE FDR IS REQUIRED TO BE MADE UNDER CAPITAL GAIN ACCOU NT SCHEME, THE APPELLANT IN ORDER TO RECTIFY THE PROCE DURAL MISTAKE EN-CASHED THE FDR DEPOSITED WITH ICICI BANK AND DEPOSITED SUCH AMOUNT INTO CAPITAL GAINS SCHEME FDR WITH CANARA BANK ON THE SAME DATE; C. ULTIMATELY THE APPELLANT UTILIZED THE FUNDS KEPT UN DER THE CGA.S ACCOUNT FOR PURCHASE OF PROPERTY. THE SIMILAR JUDGMENT WAS PRONOUNCED BY THE DIFFEREN T BENCHES OF ITAT IN THE FOLLOWING CASES: ITA NO. 96/JP/2020 RENU JAIN VS. ITO 7 ITAT JODHPUR IN CASE OF JAGAN NATH SINGH LODHA V. I TO (148 TAXMAN 1) ITAT MUMBAI IN CASE OF SATISH P. MALHOTRA VS. ITO 1 6(1)(2) (ITA NO.6877/MUM/2014) ITAT MUMBAI IN CASE OF MS. SATYAVATI ARVIND KOTIAN VS. ITO 26(2)(2) (ITA NO.5036/MUM/2017) 7. IT WAS FURTHER SUBMITTED THAT THE INTENTION OR B ONA FIDE IS NEITHER UNDER DOUBT NOR IT IS DOUBTED. MOREOVER, IT IS A SETTLED LAW THAT AN INCENTIVE PROVISION HAS TO BE CONSTRUED LIB ERALLY AS HELD THE HON'BLE SUPREME COURT IN CASE OF SANJEEV LAL 365 ITR 389 AS UNDER:- 'THE INTENTION OF THE LEGISLATURE OR THE PURPOSE WI TH WHICH THE SAID PROVISION HAS BEEN INCORPORATED IN THE ACT, IS ALSO VERY CLEAR THAT THE ASSESSEE SHOULD BE GIVEN SOME RELIEF. THOU GH IT HAS BEEN VERY OFTEN SAID THAT COMMON SENSE IS A STRANGE R AND AN INCOMPATIBLE PARTNER TO THE INCOME-TAX ACT AND IT I S ALSO SAID THAT EQUITY AND TAX ARE STRANGERS TO EACH OTHER, ST ILL THIS COURT HAS OFTEN OBSERVED THAT PURPOSIVE INTERPRETATION SH OULD BE GIVEN TO THE PROVISIONS OF THE ACT. IN THE CASE OF OXFORD UNIVERSITY PRESS V. CIT [2001] 247 ITR 658/115 TAXMAN 69 THIS COURT HAS OBSERVED THAT A PURPOSIVE INTERPRETATION OF THE PRO VISIONS OF THE ACT SHOULD BE GIVEN WHILE CONSIDERING A CLAIM FOR E XEMPTION FROM TAX. IT HAS ALSO BEEN SAID THAT HARMONIOUS CONSTRUC TION OF THE PROVISIONS WHICH SUBSERVE THE OBJECT AND PURPOSE SH OULD ALSO BE MADE WHILE CONSTRUING ANY OF THE PROVISIONS OF THE ACT AND MORE PARTICULARLY WHEN ONE IS CONCERNED WITH EXEMPTION F ROM ITA NO. 96/JP/2020 RENU JAIN VS. ITO 8 PAYMENT OF TAX. CONSIDERING THE ABOVE STATED OBSERV ATIONS AND THE PRINCIPLES WITH REGARD TO THE INTERPRETATION OF STATUTE PERTAINING TO THE TAX LAWS, ONE CAN VERY WELL INTER PRET THE PROVISIONS OF SECTION 54 READ WITH SECTION 2(47), I .E. DEFINITION OF 'TRANSFER', WHICH WOULD ENABLE THE ASSESSEE TO GET THE BENEFIT UNDER SECTION 54 OF THE ACT AS PER THE ABOVE JUDGMENT OF THE HON'BLE SUPREME CO URT, PURPOSIVE INTERPRETATION OF THE PROVISIONS OF THE A CT SHOULD BE GIVEN WHILE CONSIDERING A CLAIM FOR EXEMPTION FROM TAX. BASIS THE SAME, SECTION 54F OF THE ACT WAS INSERTED BY THE FI NANCE ACT 1982, WITH A VIEW TO ENCOURAGE HOUSE CONSTRUCTION A ND LATER SUB- SECTION 4 WAS INSERTED BY THE FINANCE ACT 1987 TO E NSURE THAT UNUTILIZED AMOUNT SHOULD BE KEPT DEPOSITED IN THE B ANK OR INSTITUTION AND SHOULD BE UTILIZED IN ACCORDANCE WI TH THE SCHEME. THIS LEGISLATIVE INTENT WAS DULY MET BY THE APPELLA NT. 8. IT WAS SUBMITTED THAT THE JURISDICTIONAL HIGH CO URT IN THE CASE OF SHANKAR LAL SAINI [2018] 89 TAXMANN.COM 235(RAJ) HAS HELD THAT EVEN AMOUNT DEPOSITED IN CGAS BEFORE FILING OF RETU RN U/S 139(4) SHALL ALSO BE ALLOWED FOR DEDUCTION AS PER PROVISIO NS OF SUB- SECTION 4 OF SECTION 54F OF THE ACT. IN THIS CASE A LSO, FDR MADE WITH CANARA BANK UNDER CGAS ON 03 DECEMBER, 2011 IS ALSO WELL BEFORE THE FILING OF RETURN OF INCOME I.E. ON 14 TH DECEMBER, 2011. ACCORDINGLY INVESTMENT MADE OF RS. 22,50,000.00 MAD E IN FDR UNDER CGAS IS AN ALLOWABLE DEDUCTION U/S 54F OF THE ACT. THE SIMILAR JUDGMENT WAS PRONOUNCED BY PUNJAB & HARYANA HIGH COURT IN THE CASE OF MS. JAGRITI AGGARWAL [2011] 15 TAXMANN.COM 146 ITA NO. 96/JP/2020 RENU JAIN VS. ITO 9 9. PER CONTRA, THE LD. DR SUBMITTED THAT FIRSTLY TH E AMOUNT HAS BEEN DEPOSITED IN THE CAPITAL GAIN ACCOUNTS SCHEME AFTER THE DUE DATE OF FILING THE RETURN OF INCOME U/S 139(1) OF THE ACT. IT WAS FURTHER SUBMITTED THAT EVEN THE SUBSEQUENT PURCHASE OF RESI DENTIAL PROPERTY HAS NOT BEEN MADE WITHIN THE PRESCRIBED PERIOD OF 2 YEARS FROM THE DATE OF TRANSFER OF THE ORIGINAL ASSET AND THEREFOR E, THERE IS NO INFIRMITY IN THE ORDER OF ASSESSING OFFICER IN DENYING THE CL AIM OF EXEMPTION U/S 54F OF THE ACT. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. FROM PERUSAL OF THE R EASONS RECORDED BY THE ASSESSING OFFICER BEFORE ISSUANCE OF NOTICE U/S 148 OF THE ACT, THE UNDISPUTED FACTS WHICH ARE EMERGING THAT THE ASSESS EE SOLD A PLOT OF LAND ON 10.01.2011 FOR A CONSIDERATION OF RS. 22,50 ,000/- AND THE SAID AMOUNT WAS DEPOSITED IN FDRS MAINTAINED WITH ICICI BANK ON 21.1.2011. THE FDRS WERE ENCASHED AND THE MATURITY PROCEEDS OF RS. 23,66,223/- SO RECEIVED WERE DEPOSITED IN CANAR A BANK ON 03.12.2011. ON THE SAME DAY, OUT OF THE MATURITY P ROCEEDS OF FDRS, THE ASSESSEE HAS MADE FRESH DEPOSITS OF FDRS OF RS. 22,50,000/- AND THIS TIME, THESE FDRS WERE MAINTAINED WITH CANARA B ANK UNDER THE CAPITAL GAIN ACCOUNT SCHEME. THESE FACTS ARE ALSO CORROBORATED BY THE BANK STATEMENT OF THE ASSESSEE APPEARING AT APB PAG E 66 AND CERTIFICATE ISSUED BY THE CANARA BANK DATED 27.10.2 015 AVAILABLE AT APB PAGE 89. THEREAFTER ON 21.05.2012, THREE FDRS MATU RED/ENCASHED AND AMOUNT CREDITED IN ASSESSEES BANK WITH MATURITY VA LUE RS. 15,32,232/- AND ON THE VERY NEXT DATE I.E, 22.05.2012, THE SAID MATURITY PROCEEDS WERE UTILIZED FOR MAKING PAYMENT OF RS 18,00,000 TO SHIR ARVIND KUMAR ITA NO. 96/JP/2020 RENU JAIN VS. ITO 10 KHURANA, THE PERSON FROM WHOM THE ASSESSEE HAS PURC HASED A PROPERTY. THEREAFTER THE REMAINING FDRS MATURED ON 25.07.2012 WITH MATURED VALUE OF RS. 8,95,788/- WHICH WAS UTILIZED FOR MAKING FURTHER PAYMENT OF RS. 9,00,000/- TO THE SELLER OF THE PROP ERTY ON 31.07.2012. THESE FACTS ARE ALSO CORROBORATED BY THE SALE DEED WHEREIN OUT OF THE TOTAL CONSIDERATION OF RS. 1,13,00,000, AN AMOUNT O F RS 27,00,000/- HAS BEEN PAID THROUGH CHEQUES DRAWN ON THE CANARA BANK OUT OF MATURITY PROCEEDS OF FDRS MAINTAINED UNDER THE CAPITAL GAINS ACCOUNT SCHEME. WE, THEREFORE, FIND THAT THE WHOLE OF THE SALE CONS IDERATION HAS BEEN DEPOSITED IN THE CAPITAL GAINS ACCOUNT SCHEME AND H AS BEEN UTILIZED IN PURCHASE OF ANOTHER PROPERTY AND HAS NOT BEEN USED FOR ANY OTHER PURPOSES. IN TERMS OF TIME FRAME OF DEPOSITING IN CAPITAL GAINS ACCOUNT SCHEME, AS WE HAVE NOTED ABOVE, THE DEPOSITS WERE M ADE ON 3.12.2011 AND THEREAFTER, THE ASSESSEE HAS FILED HE R RETURN OF INCOME ON 14.12.2011 WITHIN TIME LIMIT PRESCRIBED UNDER SE CTION 139(4) OF THE ACT WHEREIN SHE HAS MADE THE CLAIM U/S 54F OF THE A CT AND THEREFORE, THE QUESTION ARISES AS TO WHETHER THE SAME IS IN CO MPLIANCE WITH THE PROVISIONS OF SECTION 54F(4) OF THE ACT. WE FIND T HAT THE SAID ISSUE HAS ARISEN FOR CONSIDERATION BEFORE THE HONBLE JURISDI CTIONAL HIGH COURT IN CASE OF SANKAR LAL SAINI (SUPRA) WHEREIN THE SUBSTA NTIAL QUESTION OF LAW FRAMED FOR CONSIDERATION WAS AS UNDER: WHETHER, THE TRIBUNAL WAS JUSTIFIED IN ALLOWING TH E DEDUCTION OF RS.1,60,00,000/- U/S 54B AND RS.52,00,000 U/S. 54F OF THE ACT, IGNORING THE SPECIFIC PROVISIONS OF SECTION 54B(2) AND 54F(4) WHICH REFERS TO THE DUE DATE OF SECTION 139(1) AND NOT SECTION 139(4) OF THE ACT?' ITA NO. 96/JP/2020 RENU JAIN VS. ITO 11 AND THE HONBLE HIGH COURT REFERRED TO THE DECISION S OF OTHER HIGH COURTS AS UNDER: 15. HE HAS RELIED UPON THE FOLLOWING DECISIONS: CIT V. SHRI JAGTAR SINGH CHAWLA, [2013] 33 TAXMANN.COM 38/215 TAXMAN 154 (PUNJ. & HAR.) : 8. A DIVISION BENCH OF THE GAUHATI HIGH COURT IN A CASE REPORTED AS CIT V. RAJESH KUMAR JALAN : [2006] 286 ITR 274 , HELD THAT ONLY SECTION 139 OF THE ACT IS MENTIONED IN SECTION 54(2 ) OF THE ACT IN THE CONTEXT THAT THE UNUTILIZED PORTION OF THE CAPI TAL GAIN ON THE SALE OF PROPERTY USED FOR RESIDENCE SHOULD BE DEPOSITED BEFORE THE DATE OF FURNISHING THE RETURN OF THE INCOME TAX UNDER SE CTION 139 OF THE ACT AND THAT IT WOULD INCLUDE EXTENDED PERIOD TO FI LE RETURN IN TERMS OF SUB-SECTION 4 OF SECTION 139 OF THE ACT. IT WAS HELD AS UNDER: 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 CON TEXT THAT THE UNUTILIZED PORTION OF THE CAPITAL GAIN ON THE SALE OF PROPERTY USED FOR RESIDENCE SHOULD BE DEPOSITED BEFORE THE DATE OF FU RNISHING THE RETURN OF THE INCOME-TAX UNDER SECTION 139 OF THE I NCOME-TAX ACT. SECTION 139 OF THE INCOME-TAX ACT, 1961, CANNOT BE MEANT ONLY SECTION 139(1), BUT IT MEANS ALL SUB-SECTIONS OF SE CTION 139 OF THE INCOME-TAX ACT, 1961. UNDER SUB-SECTION (4) OF SECT ION 139 OF THE INCOME-TAX ACT ANY PERSON WHO HAS NOT FURNISHED A R ETURN WITHIN THE TIME ALLOWED TO HIM UNDER SUB-SECTION (1) OF SE CTION 142 MAY FURNISH THE RETURN FOR ANY PREVIOUS YEAR AT ANY TIM E 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. 9. THE SAID JUDGMENT WAS RELIED UPON BY A DIVISION BENCH OF THE KARNATAKA HIGH COURT IN FATHIMA BAI V. ITO, ITA NO. 435 OF 2004 ITA NO. 96/JP/2020 RENU JAIN VS. ITO 12 DECIDED ON 17TH OCTOBER 2008, WHEREIN IT WAS HELD T O THE FOLLOWING EFFECT:- 11. THE EXTENDED DUE DATE UNDER SECTION 139(4) WOUL D BE 31.3.1990. THE ASSESSEE DID NOT FILE THE RETURN WIT HIN THE EXTENDED DUE DATE, BUT FILED THE RETURN ON 27.2.2000. HOWEVE R, THE ASSESSEE HAD UTILIZED THE ENTIRE CAPITAL GAINS BY PURCHASE O F A HOUSE PROPERTY WITHIN THE STIPULATED PERIOD OF SECTION 54(2) I.E., BEFORE THE EXTENDED DUE DATE FOR RETURN UNDER SECTION 139. THE ASSESSEE TECHNICALLY MAY HAVE DEFAULTED IN NOT FILING THE RE TURN UNDER SECTION 139(4). BUT, HOWEVER, UTILIZED THE CAPITAL GAINS FO R PURCHASE OF PROPERTY BEFORE THE EXTENDED DUE DATE UNDER SECTION 139(4). THE CONTENTION OF THE REVENUE THAT THE DEPOSIT IN THE S CHEME SHOULD HAVE BEEN MADE BEFORE THE INITIAL DUE DATE AND NOT THE EXTENDED DUE DATE IS AN UNTENABLE CONTENTION. 10. A DIVISION BENCH OF THIS COURT IN WHICH ONE OF US (HEMANT GUPTA, J.) WAS A MEMBER, HAD AN OCCASION TO CONSIDE R THE PROVISIONS OF SECTION 54(2) OF THE ACT, WHEREIN IT HAS BEEN HELD THAT SUB-SECTION(4) OF SECTION 139 OF THE ACT IS IN FACT A PROVISO TO SECTION 139(1) OF THE ACT. THEREFORE, SINCE THE ASS ESSEE HAS INVESTED THE SALE PROCEEDS IN A RESIDENTIAL HOUSE W ITHIN THE EXTENDED PERIOD OF LIMITATION, THE CAPITAL GAIN IS NOT PAYABLE. THE JUDGMENTS IN RAJESH KUMAR JALAN'S CASE AND FATHIMA BAI'S CASE (SUPRA) WERE REFERRED TO. IT HAS BEEN HELD AS UNDER : HAVING HEARD LEARNED COUNSEL FOR THE PARTIES, WE AR E OF THE OPINION THAT SUB-SECTION (4) OF SECTION 139 OF THE ACT IS, IN ACT, A PROVISO TO SUB-SECTION (1) OF SECTION 139 OF THE ACT. SECTION 139 OF THE ACT FIXES THE DIFFERENT DATES FOR FILING THE RETURNS FO R DIFFERENT ASSESSES. IN THE CASE OF ASSESSEE AS THE RESPONDENT, IT IS 31 ST DAY OF JULY, OF THE ASSESSMENT YEAR IN TERMS OF CLAUSE (C) OF THE E XPLANATION 2 TO SUB-SECTION 1 OF SECTION 139 OF THE ACT, WHEREAS SU B-SECTION (4) OF SECTION 139 PROVIDES FOR EXTENSION IN PERIOD OF DUE DATE IN CERTAIN CIRCUMSTANCES. IT READS AS UNDER: ITA NO. 96/JP/2020 RENU JAIN VS. ITO 13 (4) ANY PERSON WHO HAS NOT FURNISHED A RETURN WITHI N THE TIME ALLOWED TO HIM UNDER SUB-SECTION (1), OR WITHIN THE TIME ALLOWED UNDER A NOTICE ISSUED UNDER SUBSECTION (1) OF SECTI ON 142, MAY FURNISH THE RETURN FOR ANY PREVIOUS YEAR AT ANY TIM E BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASS ESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASSESSMENT WHICHEVER I S EARLIER; PROVIDED THAT WHERE THE RETURN RELATES TO A PREVIOUS YEAR RELEVA NT TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL, 1988, OR ANY EARLIER ASSESSMENT YEAR, THE REFERENCE TO ON E YEAR AFORESAID SHALL BE CONSTRUED AS A REFERENCE TO TWO YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. A READING OF THE AFORESAID SUB-SECTION WOULD SHOW T HAT IF A PERSON HAS NOT FURNISHED THE RETURN OF THE PREVIOUS YEAR W ITHIN THE TIME ALLOWED UNDER SUB-SECTION (1) I.E. BEFORE 31ST DAY OF JULY OF THE ASSESSMENT YEAR, THE ASSESSEE CAN FILE RETURN BEFOR E THE EXPIRY OF ONE YEAR FROM THE END OF EVER RELEVANT ASSESSMENT Y EAR. 3. FATHIMA BAI V. ITO, [2010] 32 DTR 0243 (KAR.), I T HAS BEEN HELD AS UNDER : 8. THE SECTION 54(2) DECLARES THAT WITHIN ONE YEAR FROM THE DATE OF TRANSFER IF THE CAPITAL GAIN IS NOT INVESTED IN PUR CHASE OF BUILDING, HE SHOULD DEPOSIT THE AMOUNT IN THE CAPITAL GAIN ACCOU NT SCHEME OR ELSE THE ASSESSEE SHOULD INVEST THE CAPITAL GAINS B EFORE FILING OF RETURN WITHIN THE PERMITTED PERIOD UNDER SECTION 13 9. IN WHICH EVENT, THE ASSESSEE WILL NOT BE LIABLE TO PAY CAPIT AL GAIN TAX. 9. THE SECTION 139(4) DECLARES THAT THE ASSESSEE SH OULD FILE RETURNS WITHIN THE TIME PRESCRIBED, IF HE FAILS TO FILE RET URNS, HE MAY FILE RETURNS FOR ANY PREVIOUS YEAR AT ANY TIME BEFORE EX PIRY OF ONE YEAR FROM THE END OF RELEVANT ASSESSMENT YEAR. 4. CIT V. MS. JAGRITI AGGARWAL, [2011] 15 TAXMANN.COM 146/203 TAXMAN 203/339 ITR 610 (PUNJ. & HAR.) , IT HAS BEEN HELD AS UNDER : ITA NO. 96/JP/2020 RENU JAIN VS. ITO 14 6. SECTION 54 OF THE ACT CONTEMPLATES THAT THE CAPI TAL GAIN ARISES FROM THE TRANSFER OF A LONG TERM CAPITAL ASSET, BUT IF THE ASSESSEE WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFT ER THE DATE ON WHICH THE TRANSFER TOOK PLACE PURCHASES RESIDENTIAL HOUSE, THEN INSTEAD OF THE CAPITAL GAIN, THE INCOME WOULD BE CH ARGED IN TERMS OF PROVISIONS OF SUB-SECTION (1) OF SECTION 54. AS PER SUB-SECTION (2), IF THE AMOUNT OF CAPITAL GAINS IS NOT APPROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF NEW ASSET WITHIN ONE YEAR B EFORE THE DATE ON WHICH THE TRANSFER OF THE ORIGINAL ASSET TOOK PL ACE, OR WHICH IS NOT UTILIZED BY HIM FOR THE PURCHASE OR CONSTRUCTIO N OF THE NEW ASSET BEFORE THE DATE OF FURNISHING THE RETURN OF I NCOME UNDER SECTION 139, THE AMOUNT SHALL BE DEPOSITED BY HIM B EFORE FURNISHING SUCH RETURN NOT LATER THAN DUE DATE APPL ICABLE IN THE CASE OF ASSESSEE FOR FURNISHING THE RETURN OF INCOME UND ER SUB-SECTION (1) OF SECTION 139 IN AN ACCOUNT IN ANY SUCH BANK O R INSTITUTION AS MAY BE SPECIFIED. RELEVANT SUB-SECTION (2) OF SECTI ON 54 OF THE ACT READS AS UNDER: (2) THE AMOUNT OF THE CAPITAL GAIN WHICH IS NOT APP ROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF THE NEW ASSET MADE WITHIN ONE YEAR BEFORE THE DATE ON WHICH THE TRANSFER OF THE O RIGINAL ASSET TOOK PLACE, OR WHICH IS NOT UTILIZED BY HIM FOR THE PURC HASE OR CONSTRUCTION OF THE NEW ASSET BEFORE THE DATE OF FU RNISHING THE RETURN OF INCOME UNDER SECTION 139, SHALL BE DEPOSI TED BY HIM BEFORE FURNISHING SUCH RETURN SUCH DEPOSIT BEING MA DE IN ANY CASE NOT LATER THAN THE DUE DATE APPLICABLE IN THE CASE OF THE ASSESSEE FOR FURNISHING THE RETURN OF INCOME UNDER SUB-SECTI ON (1) OF SECTION 139 IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION A S MAY BE SPECIFIED IN, AND UTILIZED IN ACCORDANCE WITH, ANY SCHEME WHICH THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFI CIAL GAZETTEE, FRAME IN THIS BEHALF AND SUCH RETURN SHALL BE ACCOM PANIED BY PROOF OF SUCH DEPOSIT, AND FOR THE PURPOSES OF SUB-SECTIO N (1), THE AMOUNT, IF ANY, ALREADY UTILIZED BY THE ASSESSEE FO R THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET TOGETHER WITH THE AMO UNT SO DEPOSITED SHALL BE DEEMED TO BE THE COST OF THE NEW ASSET: ITA NO. 96/JP/2020 RENU JAIN VS. ITO 15 PROVIDED THAT IF THE AMOUNT DEPOSITED UNDER THIS SUB-SECTION IS NOT UTILIZED WHOLLY OR PARTLY FOR THE PURCHASE OR C ONSTRUCTION OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-SECTIO N (1), THEN,- (I ) THE AMOUNT NOT SO UTILIZED SHALL BE CHARGED UNDER SECTION 45 AS THE INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEARS FROM THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET EXPIRES; AND (II ) THE ASSESSEE SHALL BE ENTITLED TO WITHDRAW SUCH AMO UNT IN ACCORDANCE WITH THE SCHEME AFORESAID. 11. A READING OF THE AFORESAID SUB-SECTION WOULD SH OW THAT IF A PERSON HAS NOT FURNISHED THE RETURN OF THE PREVIOUS YEAR WITHIN THE TIME ALLOWED UNDER SUB-SECTION (1) I.E. BEFORE 31ST DAY OF JULY OF THE ASSESSMENT YEAR, THE ASSESSEE CAN FILE RETURN B EFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR. 13. IN VIEW OF THE ABOVE, WE FIND THAT DUE DATE FOR FURNISHING THE RETURN OF INCOME AS PER SECTION 139(1) OF THE ACT I S SUBJECT TO THE EXTENDED PERIOD PROVIDED UNDER SUB-SECTION (4) OF S ECTION 139 OF THE ACT. CONSEQUENTLY, THE QUESTION OF LAW IS ANSWE RED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. THUS, THE PR ESENT APPEAL IS DISMISSED. 5. IN CIT V. SMT. VRINDA P. ISSAC, [2012] 24 TAXMANN.COM 131/[2013] 212 TAXMAN 101 (MAG.) (KARHC) , IT HAS BEEN HELD AS UNDER : 3. THE TRIBUNAL IN COMING TO THE SAID CONCLUSION TH AT THE INVESTMENT MADE BY THE ASSESSEE BEING WITHIN THE TIME SPECIFIE D UNDER SUB- SECTION 4 OF SECTION 139 OF THE ACT RELIED ON THE J UDGMENT OF THIS COURT IN THE CASE OF FATHIMA BAI V. ITO : [2009] 32 DTR (KAR) 243. EVEN IF TWO VIEWS ARE POSSIBLE, THE REVISIONAL AUTH ORITY HAD NO JURISDICTION TO INITIATE PROCEEDINGS UNDER SECTION 263 OF THE ACT. IT WAS HELD THAT THE ORDER PASSED BY THE HIGH COURT IS INCORRECT, WHICH DECISION CANNOT BE ACCEPTED. THE TRIBUNAL HAS FOLLO WED THE JUDGMENT OF THIS COURT AS THE DECISION OF THE HIGH COURT IS BINDING ITA NO. 96/JP/2020 RENU JAIN VS. ITO 16 ON THE SUBORDINATE COURTS. IF THE JUDGMENT PASSED B Y THIS COURT IS ERRONEOUS, THE REVENUE SHOULD HAVE CHALLENGED THE S AID ORDER. AT ANY RATE THAT CANNOT BE A GROUND FOR INVOKING SECTI ON 263 OF THE ACT IN THE FACTS OF THIS CASE. IN THAT VIEW OF THE MATT ER, WE DO NOT SEE ANY MERIT IN THIS APPEAL. ACCORDINGLY, NO SUBSTANTI AL QUESTION OF LAW ARISES FOR CONSIDERATION. HENCE, THE APPEAL IS DISM ISSED. 6. CIT V. RAJESH KUMAR JALAN, [2006] 157 TAXMAN 398/286 ITR 0274 (GUHC) , IT HAS BEEN HELD AS UNDER :- 6. FROM A PLAIN READING OF SUB-SECTION (2) OF SECTI ON 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 GAIN ON THE SALE OF PROPERTY USED FOR RESIDENCE SHOULD BE DEPOSITED BEFORE THE D ATE OF FURNISHING THE RETURN OF THE INCOME TAX UNDER SECTI ON 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-S ECTIONS OF SECTION 139 OF THE INCOME TAX ACT, 1961. UNDER SUB- SECTION (4) OF SECTION 139 OF THE INCOME TAX ACT ANY PERSON WHO HA S NOT FURNISHED A RETURN WITHIN THE TIME ALLOWED TO HIM U NDER SUB-SECTION (1) OF SECTION 142 MAY FURNISH THE RETURN FOR ANY P REVIOUS YEAR AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASS ESSMENT YEAR WHICHEVER IS EARLIER. SUCH BEING THE SITUATION, IT IS THE CASE OF THE RESPONDENT/ASSESSEE THAT THE RESPONDENT/ASSESSEE CO ULD FULFIL THE REQUIREMENT UNDER SECTION 54 OF THE INCOME TAX ACT FOR EXEMPTION OF THE CAPITAL GAIN FROM BEING CHARGED TO INCOME TA X ON THE SALE OF PROPERTY USED FOR RESIDENCE UP TO MARCH 30, 1998, I NASMUCH AS THE RETURN OF INCOME TAX FOR THE ASSESSMENT YEAR 1997-9 8 COULD BE FURNISHED BEFORE THE EXPIRY OF ONE YEAR FROM THE EN D OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASS ESSMENT WHICHEVER IS EARLIER UNDER SUB-SECTION (4) OF SECTI ON 139 OF THE INCOME TAX ACT, 1961. ITA NO. 96/JP/2020 RENU JAIN VS. ITO 17 7. I.T.C. LTD. V. CCE [2004] 7 SCC 591 (SC), IT HAS BEEN HELD AS UNDER : 23. PRESUMABLY THE PHRASE 'BADLY DRAFTED' WAS USED TO MEAN THAT THE LANGUAGE OF THE ENTRY WAS AMBIGUOUS. IN CASE OF SUCH AMBIGUITY 'CLOSE REASONING' WILL BE EMPLOYED - BUT WITHOUT STRETCHING THE LANGUAGE TO ARRIVE AT THE ONLY REASO NABLE CONSTRUCTION. THESE DECISIONS EXEMPLIFY THE GENERAL RULE OF STATUTORY CONSTRUCTION THAT WORDS HAVE TO BE CONSTRUED STRICT LY ACCORDING TO THEIR ORDINARY AND NATURAL MEANING, PARTICULARLY WH EN THE STATUTE IS A FISCAL ONE IRRESPECTIVE OF THE OBJECT WITH WHICH THE PROVISION WAS INTRODUCED. OF COURSE IF THERE IS AMBIGUITY IN THE STATUTORY LANGUAGE, REFERENCE MAY BE MADE TO THE LEGISLATIVE INTENT TO RESOLVE THE AMBIGUITY. BUT IF THE STATUTORY LANGUAGE IS UNA MBIGUOUS THEN THAT MUST BE GIVEN EFFECT TO. THE LEGISLATURE IS DE EMED TO INTEND AND MEAN WHAT IT SAYS THE NEED FOR INTERPRETATION A RISES ONLY WHEN THE WORDS USED IN THE STATUTE ARE, ON THEIR OWN TER MS AMBIVALENT AND DO NOT MANIFEST THE INTENTION OF THE LEGISLATUR E KESHAVJI RAVJI AND CO. AND ORS. V. COMMISSIONER OF INCOME TAX : [1990] 183 ITR 1 (SC) . 25. BUT THERE ARE EXCEPTIONS TO THIS RULE. THE FIRS T IS THAT THE RULE OF STRICT CONSTRUCTION DOES NOT APPLY TO A PROVISION W HICH MERELY LAYS DOWN THE MACHINERY FOR THE CALCULATION OR PROCEDURE FOR THE COLLECTION OF TAX. 27. THE SECOND EXCEPTION IS: IF TWO CONSTRUCTIONS A RE POSSIBLE AND A STRICT CONSTRUCTION WOULD LEAD TO AN ABSURD RESULT THEN THE CONSTRUCTION WHICH IS IN KEEPING WITH THE OBJECT OF THE STATUTORY PROVISION OR IN KEEPING WITH EQUITY COULD BE ACCEPT ED. THIS WAS THE VIEW EXPRESSED IN COMMISSIONER OF INCOME TAX. V. J. H. GOTLA, YADAGIRI WHILE INTERPRETING SECTION 24(2) OF THE IN COME TAX ACT, 1922: '...IF STRICT LITERAL CONSTRUCTION LEADS TO AN ABSU RD RESULT I.E. RESULT NOT INTENDED TO BE SUBSERVED BY THE OBJECT OF THE LEGIS LATION FOUND IN THE MANNER INDICATED BEFORE, AND IF ANOTHER CONSTRU CTION IS POSSIBLE ITA NO. 96/JP/2020 RENU JAIN VS. ITO 18 APART FROM STRICT LITERAL CONSTRUCTION THEN THAT CO NSTRUCTION SHOULD BE PREFERRED TO THE STRICT LITERAL CONSTRUCTION. THOUG H EQUITY AND TAXATION ARE OFTEN STRANGERS, ATTEMPTS SHOULD BE MA DE THAT THESE DO NOT MEAN ALWAYS SO AND IF A CONSTRUCTION RESULTS IN EQUITY RATHER THAN IN INJUSTICE; THEN SUCH CONSTRUCTION SHOULD BE PREFERRED TO THE LITERAL CONSTRUCTION.' 8. CIT V. T.V. SUNDRAM IYENGAR (P) LTD. [1976] 1 SC C 77 (SC), IT HAS BEEN HELD AS UNDER : 21. IN CONSIDERING WHETHER THE COMPANY IS LIABLE TO PAY ADDITIONAL SUPER-TAX ON THE ENTIRE BALANCE OF DISTRIBUTABLE PR OFITS, IT HAS TO BE BORNE IN MIND THAT SECTION 23A IS CLEARLY PENAL IN NATURE; FOR, IN THE CIRCUMSTANCES MENTIONED THEREIN, IF A PRIVATE COMPA NY FAILS TO DISTRIBUTE BY WAY OF DIVIDENDS THE STATUTORY PERCEN TAGE OF ITS DISTRIBUTABLE PROFITS, IT BECOMES LIABLE TO PAY, AP ART FROM THE SUM DETERMINED AS PAYABLE BY IT ON THE BASIS OF THE ASS ESSMENT UNDER SECTION 23, SUPER-TAX AT 50 PER CENT OR 37 PER CENT AS THE CASE MAY BE, ON THE UNDISTRIBUTED BALANCE OF ITS DISTRIBUTAB LE PROFITS. IN THE FIRST PLACE, THIS PROVISION BEING PENAL, THE BURDEN WOULD LIE ON THE REVENUE TO PROVE THAT THE CONDITIONS LAID DOWN BY T HE SECTION ARE SATISFIED. COMMISSIONER OF INCOME-TAX, WEST-BENGAL V. GANGADHAR BANERJEE & CO. (P) LTD., 57 I.T.R. 176 , 184 SECONDLY, PENAL STATUTES HAVE TO THE CONSTRUED STRICTLY IN THE SENSE THAT IF THERE IS A REASONABLE INTERPRETATION WHICH WILL AVOID THE PENA LTY, THAT INTERPRETATION OUGHT TO BE ADOPTED: 'WHEN THE LEGIS LATURE IMPOSES A PENALTY, THE WORDS IMPOSING IT MUST BE CLEAR AND 'D ISTINCT'. 16. HE CONTENDED THAT INTERPRETATION WHICH HAS BEEN GI VEN BY THE TRIBUNAL IS JUST AND PROPER AND DECISION OF CO-OWNE R HAS NOT BEEN CHALLENGED BY THE DEPARTMENT AND JUDGMENT OF NAND L AL (SUPRA) IS ALSO NOT CHALLENGED. AND THE RELEVANT FINDINGS OF HONBLE HIGH COURT REA D AS UNDER: ITA NO. 96/JP/2020 RENU JAIN VS. ITO 19 17. WE HAVE HEARD COUNSEL FOR THE PARTIES. 18. THE FIRST CONTENTION OF MR. PATHAK REGARDING INTER PRETATION OF PROSECUTION AND THE EXEMPTION BENEFIT IS REQUIRED T O BE ACCEPTED. ADMITTEDLY, WHILE CONSIDERING THE PROSECUTION, THE PROVISIONS ARE TO BE VERY STRICTLY CONSTRUED WHEREAS IN THE CASE OF EXEM PTION AND OTHER BENEFITS, IT IS TO BE CONSTRUED FROM THE STATUE VER Y LIBERALLY. 19. THE CONTENTION OF MR. SINGHI THAT UNDER SECTION 13 9, INVESTMENT IS TO BE MADE BEFORE THE RETURN IS FILED OTHERWISE IT WILL RENDER THE PROVISION NUGATORY IS TO BE CONSIDERED IN THE LIGHT THAT WHILE CONSIDERING THE CASE, KARNATAKA HIGH COURT IN PARA NO.6 & 7 (SU PRA) HAS CONSIDERED THE PROVISIONS AND INTERPRETED THE SAME. EVEN THE S AME IS ACCEPTED BY THE PUNJAB AND HARYANA HIGH COURT AND GAUHATI HIGH COURT WHICH HAS TAKEN THE VIEW CONTRARY TO KERALA HIGH COURT DECISI ON. 20. IN THAT VIEW OF THE MATTER, THREE HIGH COURTS HAVE TAKEN THE VIEW AND THE TRIBUNAL HAS FOLLOWED THE KARNATAKA HIGH CO URT WHICH HAS FOLLOWED THE EARLIER GAUHATI JUDGMENT WHICH HAS BEE N INDEPENDENTLY SUPPORTED BY THE PUNJAB HARAYANA HIGH COURT. 21. IN THAT VIEW OF THE MATTER, THE ISSUE IS REQUIRED TO BE ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT. 22. THE APPEAL STANDS DISMISSED. IN THE INSTANT CASE, WHERE THE AMOUNT WAS DEPOSITED IN CAPITAL GAIN ACCOUNTS SCHEME BEFORE FILING OF RETURN U/S 139(4) OF THE ACT, RESPECTFULLY FOLLOWING THE DECISION OF HONBLE RAJA STHAN HIGH (SUPRA), THE SAME BE ELIGIBLE FOR DEDUCTION U/S 54F OF THE A CT. IN THE RESULT, THE MATTER IS DECIDED IN FAVOUR OF THE ASSESSEE AND AGA INST THE REVENUE AND THE SOLE GROUND OF APPEAL IS ALLOWED. ITA NO. 96/JP/2020 RENU JAIN VS. ITO 20 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON /03/2020. FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- /03/2020. * SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- RENU JAIN, NEW DELHI. 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD-5(2), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 96/JP/2020} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR.