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2022 (5) TMI 690 - HC - Income TaxExemption of capital gains in terms of Section 54EC - LTCG - Assessing Authority having opined that the investment should have been made on or before 03.02.2003 denied the benefit of Section 54EC of the Act and had brought to tax the capital gains - period of limitation for filing the application under Section 119[2][b] - As argue delay in investing the amount in bonds was only of two days and a genuine ground was put forth for condoning the said delay of two days which was unintentional - HELD THAT:- Indisputably, application under Section 119[2][b] of the Act was filed by the appellant – assessee on 24.05.2011 before the respondent No.1. Had the respondent No.1 considered the said application before issuance of the Circular dated 09.06.2015, certainly the said application would not have been rejected on the ground of delay i.e., beyond the period of six years as specified in the Circular dated 09.06.2015. It is also not in dispute that no provisions of the Act and Rule prescribes the period of limitation for filing the application under Section 119[2][b], it is only by virtue of the Circular dated 09.06.2015, period of limitation of six years has been prescribed for the first time. It would be beneficial to refer to the judgment of the Hon'ble Apex Court in the case of Gemini Distilleries [2017 (10) TMI 1275 - SUPREME COURT] wherein the CBDT Circular dated 09.02.2011 was considered inasmuch as its retrospective operation and held that the CBDT cannot issue any Circular having retrospective operation. No doubt, the validity of the Circular dated 09.06.2015 was not challenged directly by the appellant, applicability of the said Circular was the main issue before the Writ Court. In all fairness, if the matter is perceived in the angle of delay caused in adjudicating the application filed on 24.05.2011 much before the Circular dated 09.06.2015 coming into force, the resultant effect obviously would have been different. For the reasons best known to the Revenue, the said application was not disposed of within a reasonable period. Assessee should not suffer where no default was committed by him in submitting the application under Section 119[2][b] of the Act on 24.05.2011 i.e., when there was no period of limitation prescribed. No application could be denied on technical grounds. Given the circumstances, without dwelling upon this issue further, to balance the scales of justice, we deem it appropriate to set aside the order of the learned Single Judge as well as the order dated 13.12.2017 impugned and remand the matter to the respondent No.1 for re-consideration of the application filed on 24.05.2011 to take an appropriate decision on the merits of the case in accordance with law. This view is fortified by the judgment of the Hon'ble Apex Court in the case of Gemini Distilleries supra.
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