TMI Blog2018 (1) TMI 1000X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court decision. In that view of the matter, three High Courts have taken the view and the tribunal has followed the Karnataka High Court which has followed the earlier Gauhati judgment which has been independently supported by the Punjab Harayana High Court. - Decided in favour of the assessee - D.B. Income Tax Appeal No. 153 / 2017 - - - Dated:- 19-12-2017 - MR. K. S. JHAVERI AND MR. VIJAY KUMAR VYAS, JJ. For The Appellant : Mr. Anuroop Singhi with Mr. Aditya Vijay For The Respondent : Mr. Gunjan Pathak with Ms. Ishita Rawat Judgment 1. By way of this appeal, the appellant has assailed the judgment and order of the tribunal whereby tribunal has allowed the appeal of the assessee and modifying the order of CIT(A) as well as AO. 2. This court while admitting the appeal on 1.06.2017 framed following substantial question of law:- ( i) Whether, the tribunal was justified in allowing the deduction of ₹ 1,60,00,000/- u/s 54B and ₹ 52,00,000 u/s. 54F of the Act, ignoring the specific provisions of Section 54B(2) and 54F(4) which refers to the due date of Section 139(1) and not Section 139(4) of the Act? 3. The facts of the case are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... together with the amount so deposited shall be deemed to be the cost off the new asset. In view of above provisions of I.T. Act it is clear that assessee has to deposit the amount of capital gain which has not been utilized by the assessee before due date of filing of return in capital gain account scheme, 1988. Assessee has admitted the fact that he has failed to deposit the amount of ₹ 1,60,00,000/- in capital gain account before due date of filing of return u/s 139(1) of the I.T. Act. Therefore, the deduction claimed by the assessee u/s 54B ₹ 1,60,00,000/- is not allowable to the assessee. In view of the above discussion deduction claim by the assessee u/s 54B ₹ 1,60,00,000/- is disallowed and added to the total income of the assessee. Penalty proceedings u/s 271(1)(c) is being issued initiated for furnishing of inaccurate particular of income. 7. The provisions of section 54F(4) reads as under:- The amount of the net consideration which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilized by him for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 which is also a part of the assessment order, accordingly demand notice and challan is issued. Penalty notice u/s 271(1)(c) is being issued for furnishing of inaccurate particulars income. 5. Taking into consideration, he contended that the AO has assessed the income and capital gain benefit was not rightly granted to the assessee. He further contended that CIT(A) has dismissed the appeal observing as under:- (vii) It may be mentioned that in the case of Nandlal Sharma vs. ITO (Supra), the above referred decision of Hon ble Supreme Court was not placed before the Hon ble ITAT. In view of the decision of the Apex Court in the case of PN Khanna V/s CIT 2004 266 ITR 1/135 Taxman 327 and the decision of the Hon ble Tribunal which has relied on this decision, I respectfully differ with the decision of Hon ble ITAT in the case of Nandlal Sharma vs. ITO an it is held that the due date as specified in the section 139 of the IT Act, 1961 has to be as per section 139(1) and not section 139(4) of the IT Act, 1961. (viii) In view of the above discussion, it is held that the appellant is not entitled for deduction u/s 54B and 54F of the Act and thus the action of the AO in not allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contended that the tribunal has committed serious error in ignoring the observations made by the Supreme Court in the case of P.N. Khanna vs. CIT, 266 ITR 1(SC) wherein it has been held as under:- 12. As a result of the amendment of Section 139(3) by the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 the power of the Income Tax Officer to extend time for furnishing return was taken away w.e.f. Ist April, 1987. 17. Two principles of construction - one relating to casus omissus and the other in regard to reading the statute as a whole - appear to be well settled. Under the first principle a casus omissus cannot be supplied by the court except in the case of clear necessity and when reason for it is found in the four corners of the statute itself but at the same time a casus omissus should not be readily inferred and for that purpose all the parts of a statute or section must be construed together and every clause of a section should be construed with reference to the context and other clauses thereof so that the construction to be put on a particular provision makes a consistent enactment of the whole statute. This would be more so if literal construction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue may be different. The scheme for depositing capital gain is contemplated under section 54F(4) and it depends upon when the property of the assessee is sold and when exactly the amounts were invested, whether it was invested in a residential house or otherwise. All these facts have to be considered with reference to provisions of section 54F(4) along with section 139(1) of the Act, as the due time would be under section 139(1) only and not under section 139(4) of the Act. 3. Looking at the facts, we modify the impugned by directing that the Assessing Officer shall consider the matter de novo without being influenced by any observation made by the High Court, in accordance with law. 9. He also relied upon the decision of Supreme Court in Shriniwas Cable Components Vs. State of Madhya Pradesh and others (2012) 10 SCC 421 wherein it has been held as under: 14.In G.P . Ceramic s Private Limited v.Commissioner, Trade Tax, Uttar Pradesh, (2009) 2 SCC 90, this Court has observed thus: 29. It is now a well-established principle of law that whereas eligibility criteria laid down in an exemption notification are required to be construed strictly, once it is found t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tution 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 sub-section (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. 54F(2) (2) Where the assessee purchases, within the period of two years after the date of the transfer of the original asset, or constructs, within the period of three years after such date, any residential house, the income from which is char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undisputed facts as recorded by the AO are that the assessee had sold two properties i.e. land situated at Ramsinghpura, Tehsil Sanganer, Khasra Nos. 165 166, admeasuring 0.82 Hectare on 28.12.2010 to M/s. Krishna Balaram Residency Pvt. Ltd. Jaipur jointly both his brother Shri Sedhu Ram at the consideration of ₹ 3,00,00,000/- and land situated at Ramsinghpura (Dholai), Tehsil Sanganer, Khasra No. 163, admeasuring 0.70 Hectare on 09.02.2011 to M/s. Krishna Balram Residency Pvt. Ltd., Jaipur jointly with his brother Shri Sedhu Ram and shown total consideration of ₹ 2,56,78,800/-. The assessee shown long term capital gain of ₹ 64,61,650/- after caiming deduction u/s 54B at ₹ 1,60,00,000/- and u/s 54F ₹ 52,00,000/-. The AO observed that the assessee has failed to deposit the amount of net sale consideration or capital gain in capital gain account before the due date of filing of return i.e. 31.07.2011. It was observed that the assessee claimed that the entire sale consideration was deposited in the Nationalized Bank as well as in capital gain account. However, no documentary evidence was submitted to the AO. Therefore, the AO declined the claim of dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax Act, 1961, is mentioned in section 54(2) in the context that the unutilized portion of the capital gain on the sale of property used for residence should be deposited before the date of furnishing the return of the Income-tax under section 139 of the Income-tax Act. Section 139 of the Income-tax Act, 1961, cannot be meant only section 139(1), but it means all sub-sections of section 139 of the Income-tax Act, 1961. Under sub-section (4) of section 139 of the Income-tax Act any person who has not furnished a return within the time allowed to him under sub-section (1) of Section 142 may furnish the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment year whichever is earlier. 9. The said judgment was relied upon by a Division Bench of the Karnataka High Court in Fathima Bai v. ITO, ITA No. 435 of 2004 Decided on 17th October 2008, wherein it was held to the following effect:- 11. The extended due date under section 139(4) would be 31.3.1990. The assessee did not file the return within the extended due date, but filed the return on 27.2.2000. However, the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year. A reading of the aforesaid sub-section would show that if a person has not furnished the return of the previous year within the time allowed under subsection (1) i.e. before 31st day of July of the Assessment Year, the assessee can file return before the expiry of one year from the end of ever relevant Assessment Year. 3. Fathima Bai vs. ITO, (2009) 32 DTR 0243 (KARHC), it has been held as under :- 8. The section 54(2) declares that within one year from the date of transfer if the capital gain is not invested in purchase of building, he should deposit the amount in the Capital Gain Account Scheme or else the assessee should invest the capital gains before filing of return within the permitted period under section 139. In which event, the assessee will not be liable to pay capital gain tax. 9. The section 139(4) declares that the assessee should file returns within the time prescribed, if he fails to file returns, he may file returns for any previous year at any time before expiry of one year from the end of relevant assessment year. 4. Commissioner of Income Tax-II, Chandigarh vs. Ms. Jagriti Aggarwal, (2011) 339 ITR 0610 (PHHC), it has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (1), then,- ( i) The amount not so utilized shall be charged under Section 45 as the income of the previous year in which the period of three 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. 11. A reading of the aforesaid Sub-Section would show that if a person has not furnished the return of the previous year within the time allowed under Sub-Section (1) i.e. before 31st day of July of the Assessment Year, the assessee can file return before the expiry of one year from the end of the relevant Assessment Year. 13. In view of the above, we find that due date for furnishing the return of income as per Section 139(1) of the Act is subject to the extended period provided under Sub-Section (4) of Section 139 of the Act. Consequently, the question of law is answered against the Revenue and in favour of the assessee. Thus, the present appeal is dismissed. 5. In CIT vs. Vrinda P. Issac, (2011) 64 DTR 0376 (KARHC), it has been held as under :- 3. The Tribunal in coming to the said conclusion that the investment made by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant assessment year or before the completion of the assessment whichever is earlier under Subsection (4) of Section 139 of the Income Tax Act, 1961. 7. I.T.C. Ltd. vs. Commissioner of Central Excise, New Delhi and Anr. (2004) 7 SCC 591 (SC), it has been held as under :- 23. Presumably the phrase badly drafted was used to mean that the language of the Entry was ambiguous. In case of such ambiguity 'close reasoning' will be employed - but without stretching the language to arrive at the only reasonable construction. These decisions exemplify the general rule of statutory construction that words have to be construed strictly according to their ordinary and natural meaning, particularly when the statute is a fiscal one irrespective of the object with which the provision was introduced. Of course if there is ambiguity in the statutory language, reference may be made to the legislative intent to resolve the ambiguity. But if the statutory language is unambiguous then that must be given effect to. The legislature is deemed to intend and mean what it says The need for interpretation arises only when the words used in the statute are, on their own terms ambivalent a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ense that if there is a reasonable interpretation which will avoid the penalty, that interpretation ought to be adopted: When the legislature imposes a penalty, the words imposing it must be clear and distinct . 16. He contended that interpretation which has been given by the tribunal is just and proper and decision of co-owner has not been challenged by the department and judgment of Nand Lal (supra) is also not challenged. 17. We have heard counsel for the parties. 18. The first contention of Mr. Pathak regarding interpretation of prosecution and the exemption benefit is required to be accepted. Admittedly, while considering the prosecution, the provisions are to be very strictly construed whereas in the case of exemption and other benefits, it is to be construed from the statue very liberally. 19. The contention of Mr. Singhi that under Section 139, investment is to be made before the return is filed otherwise it will render the provision nugatory is to be considered in the light that while considering the case, Karnataka High Court in para no.6 7 (supra) has considered the provisions and interpreted the same. Even the same is accepted by the Punjab and Haryana ..... X X X X Extracts X X X X X X X X Extracts X X X X
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