TMI Blog2013 (1) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... o when the bonds are available thereafter. She only pleaded that on 22.12.2006, a cap was imposed on the maximum amount which could be invested in bonds i.e. Rs. 50.00 lakhs. In our opinion, the same is not relevant in the present case as the assessee's case is admittedly of investment of Rs. 35.00 lakhs. The assessee herself admitted that she did not invest in the bonds upto 31.12.2006. Rather her case is that she invested only on 27.01.2007 and the delay is attributed to non-availability of REC bonds. This, is not in consonance the express provision prescribing six months time limit which stood extended upto 31.12.2006. Unable to concur with assessee's contention that the time limit for investment which was admittedly extended by notification upto 31.12.2006 can be stretched upto 27.01.2007. Thus the assessee's claim of exemption u/s 54EC is not acceptable - against assessee. - IT APPEAL NO. 952 (MDS.) OF 2011 - - - Dated:- 20-11-2012 - N.S. SAINI AND S.S. GODARA, JJ. Saroj Kumar Parida for the Appellant. S. Jayaraman for the Respondent. ORDER S.S. Godara, Judicial Member - The assessee has filed the instant appeal against the order of the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act." The assessment order dated 07.11.2008 reveals that the Assessing Officer finalized assessment under section 143(3) of the "Act" and assessed the gross total income as Rs. 79,695/- and deduction under section 80C of Rs. 79,695/- was also granted to the assessee. Similarly, her income from capital gains as Rs. NIL also stood accepted. In this manner, the total income of the assessee was assessed by the Assessing Officer as Rs. NIL. 3. It is noticed that 01.03.2011, the CIT issued noticed to the assessee under section 263 of the "Act" on the ground that the assessment order was 'erroneous causing prejudicial to the interests of the Revenue' prima facie observed that her claim of deduction under section 54EC was not entitled to be accepted as it was made beyond the time period of six months from the date of sale deed i.e. January, 2006. More particularly even 'beyond' the extended date i.e. 31.12.2006. 4. In reply dated 21.03.2011, the assessee contended before CIT that though her investment in REC bonds had to be made within six months of the sale deed, but since there was scarcity of the bonds, therefore, she could not make it. She also stated that vide Notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption and submitted that even if the Assessing Officer has not specifically dealt with the issue of exemption under section 54EC in so many words, but since the material was duly explained by the assessee. Therefore, it has to be assumed that the Assessing Officer has duly applied his mind. On merits as well, it has been argued by the AR that the assessee executed sale deed on 10.01.2006. However, she could not invest the amount in REC bonds because of that scarcity of the same. Then she referred to notification dated 30.06.2006 extending the time limit of investment in bonds for claiming exemption under section 54EC upto 31st December, 2006. To buttress her plea, he has referred to the correspondence dated 01.08.2006 by REC Ltd. stating therein that it had decided to close to issue of bonds from 02.08.2006. The contention of the assessee is that she cannot be found guilty of shortage of bonds which were available only in January, 2007. In support of assessee's contentions challenging the legality of 263 proceedings as well as on merits, reliance has been placed on the following case law. 1. Cello Plast v. Dy. CIT [IT Appeal No. 2200 (Mum.) of 2009, dated 19-1-2010] 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f six months from the date of transfer. The Legislature intent in enacting the provision is to provide benefits to those assessees who park their consideration received in REC bonds or those issued by the National Highway Authority of India. It appears that the purpose behind prescribing time limit of six months is to prevent belated investments by the concerned assessees. Coming to the facts of the instant case, it is evident that from the date of sale deed i.e. on 10.01.2006 per CIT's order, the assessee had time limit of six months upto 10.07.2006 so as to invest the consideration for claiming exemption under section 54EC. However, as the paper book reveals, there is no effort stated to have been made by the assessee, which could lead to conclusion that she had applied for investment in bonds, but because of their non-availability, the investment could not be made. It is further noticed that vide notification dated 30.06.2006 (supra), the time limit of six months envisaged by section 54EC was extended upto 31.12.2006 which was followed by REC correspondence dated 01.08.2006 (supra). Even if we presume that the assessee the bonds would not be issued. Still, no evidence is forth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o buy the bonds; however, they were not available. Therefore, it was an impossible task for the assessee to comply with the conditions of sec. 54EC. The assessee ultimately purchased FDs of Rs. 50 lacs with a view to buy specified bonds whenever they are available. Letter was issued to the 5BI while purchasing FDs of Rs. 50 lacs that the bonds are not available in the market and therefore, FD for an initial period of 90 days which may be extended further or may be redeemed prior to expiry date for investing the same in bonds qualified u/s 54E of the Act. Copy of the letter dated 30.10.2006 is placed at page 6 of the compilation. Copies of the FDs are placed at pages 7 8 of the compilation. Copy of the letter issued by Rural Electrification Corpn Ltd along with copy of bond certificate is placed at pages 9 of the compilation. In this allotment, it is clarified that the assessee applied for purchase of bonds on 27.1.2007 and they are allotted on 31.1.2007. 500 bonds for a consideration of Rs. 50 lacs were allotted. The bond certificate is also placed at page 10 of the compilation. 11.1 From these facts, it is clearly established that there was reasonable cause in not/'Purchasing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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