TaxTMI 
TaxTMI 
2017 (2) TMI 950
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....section 54EC Bonds and claimed exemption u/s 54 and 54EC of the Act. The return of income for the Asst Year 2005-06 was filed on 27.7.2005 which was processed u/s 143(1) of the Act and later the assessment was reopened and reassessment u/s 143(3)/147 of the Act was completed on 30.4.2009 . The capital gain on sale of the two flats was worked out at Rs. 44,09,184/-. The reassessment was completed by the ld AO on 30.4.2009 by observing as under :- "The AIR information reported for the sale of Delhi Property for Rs. 33,00,000/- during the FY 2004-05. As requisitioned the assessee produced copy of bank account, copy of conveyance deed both for purchase and sales of the captioned property for verification. It was observed that during FY 2004-05 the assessee had sold two house properties one in Delhi and another in Kolkata as mentioned above and the capital gain pertinent to the above transaction was computed at Rs. 44,09,184/- u/s 50C . As per provision of section 54, the capital gain will be exempted for taxation if the assessee has within a period of one year before and two years after the date on which the transfer took place 'purchased' or has within a period of three years....
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....ter dated 6.9.2012 informed the assessee that it was not his intention to launch any investigation into facts or to call for any evidence. It was stated that the assessee had not deposited the unused amount of capital gains in the capital gain account scheme as required u/s 54(2) of the Act but had kept the money in his savings account and due to the said failure, exemption u/s 54 of the Act is not entitled for the assessee and thereby proceedings initiated to rectify the said mistake is very much valid. 3.5. The assessee vide letter dated 10.10.2012 informed the ld AO that the capital gains if invested even before the time limit stipulated u/s 139(4) of the Act is to be construed as substantial compliance with the provisions of section 54(2) of the Act and for which, he placed reliance on the decisions of Hon'ble Gauhati High Court in the case of CIT vs Rajesh Kumar Jalan reported in (2006) 286 ITR 274 (Gau). Further reliance was placed on the decision of the Bangalore Tribunal in the case of Nipun Mehrotra reported in (2008) 297 ITR (AT) 110 (Bangalore). It was pleaded that the assessee had time to reinvest in another property upto time limit specified u/s 139(4) of the Act i.....
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....ithin which the same is to be complied with ? b) Whether the assessee is entitled to claim exemption u/s 54 or 54F of the Act if the assessee had reinvested the capital gains within the time limit stipulated u/s 139(4) of the Act ? c) Whether the matter requiring investigation into facts could be sought to be rectified in the proceedings u/s 154 of the Act ? He argued that with regard to the extension of time limit for reinvestment in new property to the date stipulated u/s 139(4) of the Act, he also placed reliance on the decision of the coordinate bench of this tribunal in the case of Smt Saroj Aggarwal vs ITO in ITA No. 885/Kol/2013 dated 20.1.2016. He argued that all these aspects are highly debatable and hence the same cannot be done in section 154 proceedings and for which he placed reliance on the decision of the Hon'ble Calcutta High Court in the case of Oriental Cotton Corporation and Mills Ltd vs CIT reported in (1993) 202 ITR 370 (Cal) . 6. In response to this, the ld DR argued that the assessee had filed his return of income on 27.7.2005 at which point of time, he had practically invested only a sum of Rs. 15 lakhs including the sum of Rs. 9 lakhs investe....
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....spectively by various high courts as stated supra. These disputes had reached the corridors of various judicial forums and had been debated extensively and hence cannot be construed as a mistake apparent from the record warranting rectification within the meaning of section 154 of the Act. We find that the Hon'ble Calcutta High Court in the case of Oriental Cotton Corporation and Mills Ltd vs CIT reported in (1993) 202 ITR 370 (Cal) had held as below:- "It is well-settled that section 154 has a very limited application. It enables rectification of a mistake which is apparent from the record. The power under section 154 can be exercised by the Income-tax Officer to correct obvious errors of law and those mistakes which are apparent from the record. A decision on a debatable point of fact and the failure to apply the law to a set of facts which remain to be investigated, cannot be corrected by way of rectification. True, in the instant case, for the assessment years 1967-68 to 1972-73, rental income was accepted as business income. It will, however, appear that from the assessment year 1973-74 to the assessment year 1978-79, the Income-tax Officer did not treat the rental in....