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TMI Blog2015 (11) TMI 1681X X X X Extracts X X X X X X X X Extracts X X X X ..... he documents relating to filling the appeal were given to the counsel who had earlier appeared before CIT (A) on my behalf. I was under a bonafide belief that the appeal has been filed by the counsel. However, subsequently, in and around March, 2012, I received the penalty order U/s 271(1) (c). At that time, I got the knowledge that the quantum appeal has not been filed by the earlier counsel. Thereafter, I collected my records from the old counsel and engaged new counsel and consequently the appeal before Hon'ble Income Tax Appellate Tribunal was filed. 4. The assessee has also filed an affidavit of Sh. N. K. Bansal, the C.A who was noting after the case before the Ld. CIT(A) along him Sh. Himanshu Goel, CA, stating as under:- "I, Naresh Kumar Bansal S/o Sh. Mani Ram Bansal R/o D-503, Wembley E State, Rosewood city, Sector-49, Gurgoan, Haryana, CA by profession do hereby solemnly declare and affirm as under:- 1. That I have been looking after the income tax matters of Sh. Daya Ram Mittal S/o Sh. Bishamber Dayal Mittal R/o House No.77, Block H- 4/5, Suvidha Kunj Pitampura, New Delhi. 2. That for the A.Y. 2006-07, 1 had been looking after the income tax assessment and appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has given all the necessary papers for filing appeal before the Tribunal and he was under bonafide belief that appeal has been filed and this fact came to his notice when (the assessee) received penalty order u/s 271 (1) (c) of the Act. 8. On careful consideration of above rival submissions of both the sides, we are of the view that the prayer for condonation of delay falls with the ambit of the ratio of the order of the Tribunal in the case of Gregory & Nicholas V/s ACIT (supra) where in para 8, referring to the order of the ITAT Mumbai in the case of Priyanka Chopra vs ACIT in ITA No. 4045/Mum/2009 dated 10/12/2010, it has been noted that the mistake on the part of the counsel may in certain circumstances be taken into account in dealing in delay. 9. In the present case, the assessee as well as his earlier counsel have filed their affidavits supporting the sufficient cause and no rebuttal have been filed against these affidavits, hence, firstly we note that there is no general proposition that mistake of counsel itself is always a sufficient cause. This question when posed to the courts is always a question whether the explanation and reason for delay was bonafide or w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring on merits. Sole ground no. 1 of the assessee 11. We have heard the rival submissions and carefully perused the relevant material placed on record before us. Ld. AR reiterated written submissions of the assessee spread over 10 pages which are being reproduced below for the sake of completeness in this order as follows:- "The assessee filed the return of income on 30.03.2007 declaring income of Rs. 10939490/-. The assessment u/s 143(3) has been completed at income of Rs. 13623490/-. While completing the assessment the assessing officer withdrawn deduction u/s 54B amounting to Rs. 2648000/. 2. The facts of the case are that during the year the appellant sold its agricultural lands on 27.12.2005 for a consideration of Rs. 12375000/-. After excluding the cost of acquisition, expenses on transfer, the sales resulted into net capital gain of Rs. 11669958/- (after indexation). Out of the sales proceeds the appellant invested a sum of Rs. 2684000/- for purchase of another agricultural land from Shri Dwarkadhish Trust (a public trust registered under the Indian Trust Act 1882) vide an agreement to sell dated 23.02.2007. In accordance with the provisions of section 54B of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset: Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase of the new asset within the period specified in subsection (1), then,- (i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of two years from the date of the transfer of the original asset expires; and (ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid. 4. From the perusal of the provisions of aforesaid section 54B it is evident that the assessee is required to purchase another agricultural land within a period of 2 y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c.(1) of sec. 139 of the Act. Sub-sec. (4) was in relation to the time allowed to an assessee under sub-sec.(1) to file the return. Therefore, such provision was not an independent provision, but relates to the time contemplated under sub-sec.(1) of sec. 139. Therefore, subsec.( 4) has to be read along with sub-sec.(1). Therefore, the due date for furnishing the return of income under sec. 139(1) of the Act was subject to extended period provided under sec. 139(4) of the Act. Similar view was taken by Hon'ble Guwahati High Court in the case of Rajesh Kumar Jalan (supra). During the course of hearing the learned Sr. DR could not cite a contrary decision to what has been held by the Hon'ble Guwahati High Court and Hon'ble Punjab & Haryana High Court. Respectfully following the decision of Hon'ble Punjab & Haryana High Court it is held that since the assessee had invested in the new property within the time allowed under sec. 139(4) of the Act the assessee will be entitled for exemption under sec. 54 of the Act to the extent the amount invested in the new property. Accordingly, we do not find any infirmity in the order of the CIT(A) allowing relief in respect of both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section (4) to section 139 had to be read along with sub-section (1) and the due date for furnishing the return of income u/s 139(1) is subject to the extended period provided u/s 139(4) and hence the extended period u/s 139(4) has to be considered for the purposes of utilization of the capital gain amount. In that case, the assessee had sold the old flat on 13.1.2006 and the new residential house was purchased by the assessee on 2.1.2007 which was within the extended time limit till 31.3.2007 u/s 139(4) for assessment year 2006-07 and therefore the claim was allowed even though the amount had not been deposited in the capital gain account. The said judgment has been followed by the Delhi Bench of the Tribunal in the case of Jagtar Singh Chawla v. ACIT [IT Appeal No.4923/Delhi/2010 (AY-2007-08), order dated 30.6.2011], in which case the Tribunal held that since the assessee had invested the whole amount by 23.4.2008 which was within the extended period of filing the return of income u/s 139(4) till 31.3.2009 and therefore, the assessee was entitled to claim exemption u/s 54(F). In the present case, the capital gain earned by the assessee was Rs. 9,98,411/- and the assessee had util ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompetent court, in such peculiar facts, a valid transfer took place within meaning of section 2(47) by even executing agreement to sell and, consequently, relief under section 54 was to be granted to assessee in respect of purchase of new residential property subject to fulfilment of other conditions - Held, yes [Paras 20 and 26] [In favour of assessee]" 12. Replying to the above, ld. DR also dealt with stand of the Revenue and filed written submissions which are also being reproduced below:- "1. Return of Income for A.Y. 2006-07 was filed by assessee on 30.03.2007. (not under section 139 (1) of the IT Act). As per the return assessee has earned capital gain on sale of land sold on 27.12.2005, amounting to Rs. 1.16 /- crores. In the return assessee claimed deduction u/s 54B amounting to Rs. 26,84000/-. 2. The Assessing Officer has observed that the assessee entered into agreement to sale on 23.02.2007 with Dawarkadheesh Trust for the purchase of land. Since the required permission to sale was not granted by District Session Judge, conveyance deed for the purchase of land was not executed in favour of the assessee till the conclusion of assessment proceedings. 3. (Shri Dwarka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that had the intentions of the Legislature was to permit the assessee to deposit in to capital gain scheme up to time limit prescribe u/ s 139(4) also, the use of the expression "section 139" alone would have been sufficed." 13. The Ld. AR also placed oral rejoinder to the above submissions of the Ld. DR and submitted that the AO has not brought out any allegation to controvert these facts that the assessee sold his agricultural land on 27.12.2005 and out of sale proceeds the assessee invested a sum of Rs. 26,84,000/- for purchase of another agriculture land from Shri Dwarkadhis Trust vide agreement dated 23.2.2007 and thus the assessee's claim u/s 54B of the Act was placed as per statutory provisions of the Act. The Ld. AR also pointed out that the assessee utilised said amount for the purchase of agriculture land within two years from the transfer of his earlier assets, hence, the assessee was eligible for deduction u/s 54B of the Act. 14. On careful consideration of above rival submissions of both the sides, at the outset, we note that admittedly the assessee used Rs. 26,84,000/- towards purchase of agriculture land under agreement dated 23.2.2007 and this amount was the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue before embarking upon the decision whether the AO was justified in disallowing deduction u/s 54B of the Act. The undisputed facts of the case are that the appellant had sold his agricultural land at Khadipur for a total consideration of Rs. 1,23,75,000/- on 27.12.2005 (He incurred an amount of Rs. 2,25,000/- on account of transfer expenses). The said land was purchased by him in three lots in the financial years 1988- 89(01.06.1988),1997-98(24.06.97) and 1997- 98(31.07.97). The said transaction resulted into a net capital gain of Rs. 1,16,69,958/- (after indexation). The appellant entered into purchase agreement for another agricultural land measuring 15 bighas at village palla of district Delhi for a consideration of Rs. 26,84,000/- with Shri Dwarkadhish Trust (a public trust registered under the Indian Trust Act, 1882) vide an "Agreement to sell" dated 23.02.2007. The appellant claimed deduction of Rs. 26,84,000/- u/s 54B of the Act on the capital gain arising from the above stated transaction. Out of the said 'sale consideration' of Rs. 26,84,000/- an amount of Rs. 22,00,000/- was paid to Shri Dwarkadhish Trust (vide pay order number 003009 dated 22.01.2007 for Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eciate facts of the case and to adjudicate the allowability of the claim of the assessee in the light of conclusion of the authorities below, we find it relevant and appropriate to consider the ratio/dicta/proposition of the orders/judgments relied by both the parties. The Ld. DR has placed her reliance on the order of ITAT- Cochin-in the case of ITO vs. Smt. Rosamma Korah (2014) 45 Taxman.com 153 (Cochin Tribunal) wherein referring to the dicta of Hon'ble Supreme Court in the case of P.N. Khanna vs. CIT 266 ITR 01 (SC), it has been held that the " due date" means date for filing return u/s 139 (1) of the Act. It was further observed by the Tribunal in this order that had the intention of the legislature was to permit the assessee to deposit into capital scheme up to time limit prescribed u/s 139(4) of the Act also, then the use of expression section 139, instead of section 139 (1) alone would have sufficed. The Ld. AR has contended that the CIT(A) himself in para 4.1, as reproduced hereinabove, has held that "the question of depositing the unutilized capital gains in the capital gain deposit scheme before filing return of the relevant assessment year u/s 139 (1) of the Act does no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years viz. before 26.12.2007. The main allegation of the authorities below is that the sale deed could not be executed in the name of the assessee and the assessee could not get possession of said purchased property within prescribed time limit, hence, he is not entitled for deduction u/s 54B of the Act. In the light of preposition laid down by Hon'ble Apex Court in the case of Sanjeev Lal vs CIT (supra) it is clear that the execution of sale deed in favour of assessee is not a sole criteria to allow deduction u/s 54B of the Act. In the present case, as the property was purchased from a public trust, hence, the sale deed could not be executed in favour of the assessee within prescribed time limit as expected by the revenue authorities. It is also pertinent to note that as per ratio of the order of the Mumbai Tribunal in the case of Kishore H Galaiya (supra), the possession of purchased property is also not a criteria for grant of deduction u/s 54B of the Act. 21. On vigilant and careful reading of section 54B of the Act, we note that the legislation has used word "purchased" denotes that for availing deduction u/s 54B of the Act, it is required that the assessee is required to pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was purchased from a public trust. At the same time, we cannot ignore the conduct and intention of the assessee wherein he pays entire sale consideration, makes payment for purchase of stamps for execution of sale deed and also pays brokerage and from this, we can safely and firmly infer that in fact the assessee had a bonafide and true intention to purchase agriculture land within prescribed period of two years and he used Rs. 26,84,000/- towards this intention of purchase and if the sale deed could not be executed in his name and he could not get possession of the purchased land due to the reason beyond his control, then he cannot be debarred from claiming deduction u/s 54B of the Act. Hence, on the basis of our foregoing discussion on this issue, we are inclined to held that the assessee is entitled for claim of deduction u/s 54B of the Act pertaining to Rs. 26,84,000/- which was used / invested towards purchase of agriculture land within prescribed time limit of two years from the date of sale of agriculture land out of which capital gain accrued to the assessee. Accordingly the appeal of the assessee is allowed. 22. In the result appeal of the assessee is allowed. The order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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