TMI Blog2014 (3) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... h' to be read within the recognized ways of interpretation. There is no dispute about the investment which had actually been made by the assessee - The investment had been made in the month of December, 2008 - alleged to be few days late from the date of transfer in the month of June, 2008 - Once the purpose of the introduction of the section was served by making the investment in the specified assets then that purpose has to be kept in mind while granting incentive - the investment in question qualifies for the deduction U/s 54EC – Decided in favour of Assessee. - IT Appeal No. 1973 (Ahd.) of 2012 - - - Dated:- 25-3-2014 - G.C. GUPT , MUKUL Kr.SHRAWAT AND N.S. SAINI, JJ. For the Appellant : P.L. Kureel and O.P. Vaishnav For the Respondent : U.S. Bhati ORDER :- PER : Mukul Kumar Shrawat This Special Bench has been constituted vide an order U/s 255(3) of the I.T.Act (hereinafter mentioned as The Act) by the Hon'ble President, I.T.A.T. The question referred to us is reproduced below: Whether for the purpose of Section 54EC of IT Act, 1961, the period of investment of six months should be reckoned after the date of transfer or from the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... document was registered on 10th of June, 2008; hence, the assessee was required to purchase the NHAI bond within six months from the said date of registration, i.e., 10th June, 2008. However, the assessee had purchased the NHAI bond on 17th of December, 2008, alleged by the AO. A show cause was issued as to why the claim of exemption be not disallowed in respect of the investment made in NHAI bond in the light of the provisions of Section 54EC of IT Act being not invested within six months. The assessee has informed that the sale consideration was deposited in a capital gain account out of which the investment was made in the specified asset, i.e., NHAI bond to claim the benefit of the provisions u/s.54EC of IT Act. The assessee has also explained to the AO that the last date of expiry of six months from the date of transfer of the Long Term Capital Asset was 10th of December, 2008 however the assessee had allegedly tendered a cheque on 8th December, 2008 vide an application no.157602 to the bank. According to assessee since the application for the purchase of those bonds was tendered in the bank on 8th December, 2008, which was within the period of six months from the date of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who had made two fold arguments. His first plank of argument is legal in nature that as per the General Clauses Act the word month reckoned according to the British Calendar. For this legal proposition he has submitted a copy of the General Clause Act, 1897 and referred Section 3 clause(35) of Definitions . He has enlarged the said argument by also placing reliance on a CBDT Circular No.791 of 2nd of June, 2000 for the legal proposition that while interpreting the beneficial provision a liberal interpretation is to be adopted, as recommended in the said circular. In view of the said Circular for the purpose of claim of deduction on sale or transfer of stock in trade, the Board had decided that the period of six months for making investment in specified assets for the purpose of deduction u/s.54EA, 54EB and 54EC should be taken from the date when such stock in trade is sold or otherwise transferred as per Section 54(i) of IT Act. Likewise a liberal interpretation was made in respect of one more provision of IT Act by CBDT in a Circular no.359 dated 10.05.1983 wherein it was felt by the Board, while considering the provisions of Section 54E, that exemption for Long Term Capital Gai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to take the help of General Clauses Act, 1897 . 4.1 Coming to the provisions of Section 54EC, Ld. D.R. has pleaded that the limitation of period for an investment has been prescribed as at any time within a period of 6 months from the date of such transfer . In ordinary sense, a 'month' is a period from a specified date in a month to the date numerically corresponding to the date in the following months, less one. Ld. D.R. has given example that if a particular date is 10th June, 2008, one month shall be up to 9th July, 2008. Therefore, the term month has been used in Section 54EC in ordinary sense and the same should not exceed more than 30 days. He has thus pleaded that the wordings of the Section should not be replaced by any other wordings. Therefore, in the said example, one month cannot be extended up to 31st July, 2008. If that would have been the intention of the legislation then certainly these words ought to have been prescribed in the provisions of Section 54EC of the Act. 4.2 Ld. D.R. has placed reliance on a decision of Dhanraj Singh Choudhary v. Nathulal Vishwakarma order dated 08.12.2011 reported in 16 taxmann.com249 (SC), relevant portion quoted as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew succinct facts. A sale was executed and registered on 10th of June, 2008. As per the Revenue Department, the assessee was required u/s.54EC to invest in NHAI bond on or before 10th of December, 2008,i.e. within six months, however, the said investment was stated to be made by the assessee on 17th of December, 2008. At this juncture it may not be out of place to mention that there was a claim of the assessee that the said cheque was tendered on 8th of December, 2008, hence the said investment was otherwise made before the expiry of limitation as prescribed. Be that as it was, this controversy of exact date of investment, shall be addressed after addressing the main controversy that whether the said investment of the assessee which was allegedly made on 17th of December, 2008 was within the phraseology, at any time within a period of six months after the date of such transfer as prescribed in Section 54EC. For ready reference, the relevant portion of the section is reproduced below: Capital gain not to be charged on investment in certain bonds. 54EC. (1) Where the capital gain arises from the transfer of a long-term capital asset (the capital asset so transferre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied asset. But the investment has to be made at any time within a period of six months after the date of such transfer. 5.4 Being a beneficial provision through which an incentive is given, an argument has been raised, that such provision should be interpreted liberally. For this legal proposition of liberal interpretation decisions cited are namely, Bajaj Tempo Ltd. v. CIT, 196 ITR 188 (SC), CIT v. Gwalior Rayan Silk Manufacturing Company, 196 ITR 149 (SC) and CIT v. Vegetable Products Ltd., 88 ITR 192 (SC). Even it has also been argued that the highest Revenue Authority, i.e., CBDT has also taken due cognizance of such incentive provisions, therefore, granted relaxation. Such as in CBDT Circular No.794 dated 9th of August, 2000; CBDT Circular No.359 dated 10th of May, 1983 and Circular No.791 dated 2nd of June, 2000. Certain Tribunals have also accepted the legal aspect of 'liberal interpretation' of statute in respect of provisions of Section 54E or Sections 54EA such as in the case of Mahesh Nemchandra Ganeshwade v. ITO, 17 ITR (Tribunal) 116 (Pune), Bhikhulal Chandak (HUF) v. ITO, 126 TTJ 345 (Nagpur), Chanchal Kumar Sirkar v. ITO, (2012) 16 ITR (Tribunal) 91 (Kolka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er in the case of Aquatech Engineers, 36 CCH 167 (Mum Trib.), again it was decided to grant the exemption of investment u/s.54EC if the same has been made by the end of the month. 5.6 In certain other context few Hon'ble High Courts have also taken a view that a month is to be reckoned according british calendar . We have noted that in the case of CIT v. SLM Maniklal Industries, 274 ITR 485, the Hon'ble Jurisdictional High Court has opined that the issue of interpretation of the term month is no longer res integra because in the case of CIT v. Kadri Mills (Caimbatore Ltd.), 106 ITR 846 (Madras) it was laid down that the month to be reckoned according to British calendar. The issue before the Hon'ble Court was that whether the Tribunal was right in law and on facts in canceling the penalty levied u/s. 271(1)(a), observing that month meant calendar month and not the lunar month of 28 or 30 days. This issue was dealt at some length by Hon'ble Madras High Court in the case of CIT v. Kadri Mill Caimbatore Ltd., 106 ITR 846 (Mad.). In this case, the observation of the Hon'ble Court was that IT Act, 1961 itself does not define the word month however Section 3 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cribed that the Tribunal may pass an order granting stay but for a period not exceeding one hundred and eighty days. This is an important distinction made in this statute while subscribing the limitation/ period. This distinction thus resolves the present controversy by itself. 7. So the logical conclusion is that in the absence of any definition of the word ' month' in The Act, the definition of General Clauses Act 1897 shall be applicable and by doing so there is no attempt on our part to interpret the language of Sec. 54EC , what to say a liberal or literal interpretation. We hereby hold that the Legislature has in its wisdom has chosen to use the word ' month'. This was done by keeping in mind the definition as prescribed in General Clauses Act 1857. Therefore we have also read the word 'month' within the recognized ways of interpretation. Rather we have also seen both; the conventional as well as lexicon meaning. Here there in no attempt to supply casus-omissus but replicated as per the language used. 7.1 In the present case there is no dispute about the investment which had actually been made by the assessee. The said investment had been made in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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