TMI Blog2017 (6) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... le Bombay High Court in the case of CIT vs. Cello Plast (2012 (8) TMI 527 - BOMBAY HIGH COURT ) which is identical to facts of this case. Claim of exemption u/s. 54F - CIT-A power to consider claim - Held that:- CIT(A) has power to consider the claim of deduction u/s. 54F of the Act. Since on merits, whether the assessee is entitled to the benefit of the claim u/s. 54F has not been examined by the CIT(A), we deem it appropriate to restore the issue to the file of the Assessing Officer for de novo consideration. It is ordered accordingly. Interest u/s. 234B - whether is to be charged as per section 234B(1) or 234B(3) - whether the assessee is liable for interest only from 17/08/2014 to 14/03/2014 as per section 234B(3) as per CIT-A - Held that:- When proceedings u/s. 143(1) of the Act has been completed and issued to the assessee, interest is to be levied as per section 234B(3) of the Act from the date of proceedings u/s. 143(1) of the Act. Moreover we notice that section 234B(3) was amended by Finance Act, 2015 with effect from 1.6.2015 whereby interest u/s. 234B is to be calculated from first day of April to next following such financial year. Therefore, in view of the the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007. Your appellant had subscribed to the bonds on 27th January, 2007, i.e., within five days it became available in the market and the same was allotted on 31st January, 2007. In case the bonds are not available, the time to invest in the bonds gets automatically extended till such bonds become available in the market. Commissioner of Income Tax(Appeals) erred in his conclusion in paragraph 4.4 of the order that the Mumbai High Court decision was not applicable to the appellant. 3. Your appellant is eligible for the deduction u/s. 54F in respect of the investment in residential flat amounting to ₹ 39,26,130. The Commissioner of Income tax (Appeals) did not grant the deduction following the decision of the Supreme Court in the case of Goetze India Ltd. vs. CIT (284 ITR 323). However, the Supreme Court has clarified in the said order that the mandate of the judgment was limited to the power of the assessing authority and did not impinge on the power of the appellate authority. Hence, the Commissioner of Income Tax(Appeals) being an appellate authority should have granted the deduction u/s. 54F on the investment in residential flat. 3.1 The first ground is regardi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer and the CIT(A). 3.4. We have heard the rival contentions and perused the material on record. The assessee had sold his pathology lab on 1.1.2006. In the normal course, the assessee ought to have invested in 54EC bonds on or before 30-06-2006. However the period of investment in 54EC bonds were extended upto 31/12/2006, by CBDT Notification dated 30/06/2006. The CBDT in Notification (at para 3) had acknowledged that old bonds were closed on 29/03/2006 and were not available from the said date. The non availability of the bonds from 29/03/2006 was the reason for extension of period for investment in 54EC bonds from 30/06/2006 to 31/12/2006 (in the case of the assessee). The Board s Notification dated 30/06/2006 is reproduced for ready reference: F. No. 142/09/2006-TPL Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, the 30th June, 2006 Section 54EC of the Income-tax Act, 1961 provides that capital gain arising from the transfer of a long term capital asset shall not be charged to tax to the extent such gains are invested in long term specified asset within a period of six month ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of CIT vs. Cello Plast (2012) 76 DTR 439 Bom.). The relevant portion of the judgment of Hon ble Bombay High Court reads as follows: 22. In the present case, the bonds were not available from 4/8/2006 to 22/1/2007. The last date for investment in the normal course would have been 21/9/2006 which was extended up to 31/12/2006. The respondents admittedly invested in the bonds on 31/1/2007 i.e. within nine days of their being available once again from 22/1/2007. Considering that the bonds were not available for such a long period, an extension of merely nine days is extremely reasonable in the present facts. 3.6 The Hon ble High Court also rejected the Revenue s contention that the bonds were available upto 3/8/2006 and respondent assessee should have purchased the bonds before 3/8/2006. The Hon ble High Court held that when the assessee was entitled in law to wait till 21/9/2006 to invest in the bonds, there is no reason to invest in the bonds prior to the above mentioned date 3.7 The 54EC bonds had it not been available during the month of December, 2006, it would have been impossible for the assessee to have invested in these bonds. The assessee cannot be compelled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was made within 31.7.2006 which qualifies for deduction u/s. 54F, the deduction was however disallowed on the ground that there was no provision under the income Tax Act to make amendment in the return of income by modifying an application at the assessment stage without revising the return. This was upheld by the Apex Court in Goetze India Ltd vs CIT (284 ITR 323). Therefore the entire exemption u/s. 54F as claimed by the assessee could not be allowed. 4.2 Aggrieved, the assessee preferred an appeal to the first appellate authority. The CIT(A) confirmed the view taken by the Assessing Officer. The relevant finding of the CIT(A) reads as follows: It is seen that in the return filed by the appellant no claim of deduction u/s. 54F was made. It is only during the course of assessment proceedings, the assessee brought this issue before the Assessing Officer and under this set of specific facts and circumstances the Assessing Officer has rightfully applied the ratio pronounced by the Hon ble Supreme Court in the case of Goetze (India) Ltd. vs CIT. In the aforesaid decision, it is only the Income Tax Appellate Tribunal, is interpreted to be the appellate authority to consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer relying on the judgment of the Hon ble Supreme Court in the case of Goetze (India) Ltd. vs. CIT (supra) had denied the claim of exemption u/s. 54F only for the reason that the said claim was made only during the course of assessment proceedings and not in the return of income. The Hon ble Supreme Court in the case of Goetze (India) Ltd. vs. CIT (supra) in para 5 of the judgment had categorically held that the judgment was to limit the power of the Assessing Officer and not to impinge on the powers of the appellate authority. This position has been clarified by the judgment of the Hon ble Delhi High Court in the case of Pr. CIT vs. Western India Shipyard Ltd.(supra). The relevant portion of the same reads as follows: The Tribunal was right in holding that while there was a bar on the Assessing Officer entertaining such claim without a revised return being filed by the assessee, there was no such restraint on the Commissioner (Appeals) during the appellate proceedings. However, while permitting such a claim he ought to have examined whether in fact the bad debts were written of by the assessee in the first instance in the accounts and then taken into consideration whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n has expired but the assessment is still pending, that the assessee should be prohibited from making such a claim. Technicalities cannot be allowed to work as speed breakers in the course of dispensation of justice. 4.7 In the instant case, admittedly, the assessee had incurred cost of ₹ 34,97,593/- in the construction of the residential house. Whether the assessee was entitled to the claim of exemption u/s. 54F in respect of the amount, has not been dealt on merits for the reason that the claim of exemption u/s. 54F was not made in the return of income filed. Whether assessee is entitled to exemption u/s. 54F as per law, ought to have been examined by the CIT(A) and the assessee cannot be foreclosed from the benefit of exemption merely on account of not making a claim in the return of income. The assessee had made the claim of exemption u/s. 54F of the Act in the course of assessment proceedings and also before the first appellate authority. The Hon ble Supreme Court has clarified in para 4 of the said judgment that the claim not made in the return of income does not impinge upon the powers of the first appellate authority to examine the allowability of the claim. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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