TaxTMI 
TaxTMI 
2015 (11) TMI 1681
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....delay of 533 days by stating as under:- "3. That the 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 fo....
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....his earlier counsel has filed their respective affidavits supporting this fact that the 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 th....
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....tation period and thus we condone the said delay and appeal of the assessee is admitted for hearing 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....
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....osited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the 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....
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....w, coming to second issue, the Hon'ble Punjab & Haryana High Court in the case of Ms. Jagriti Aggarwal (supra) has held that sub-sec. (4) of sec. 139 provides the extension period of limitation as an exception to sub-sec.(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 as....
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.... Therefore, the Hon'ble High Court held that the provision of section 139(4) is not an independent provision but is related to the time contemplated under the provisions of section 139(1) of the Act. Accordingly, the Hon'ble High Court held that sub-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 wi....
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.... 2005-06 - Whether where assessee having executed an agreement to sell in respect of a house property, purchased a new residential property within one year from date of agreement to sell and subsequently sale deed could not be executed within prescribed time due to an order passed by competent 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 ....
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.... 139(1) - Assessee claimed that due date provided under section 139(4) should be considered. ITAT applied the ration of Hon'ble Apex Court in Prakash Nath Khanna v. CIT [2004] 266 ITR 1 wherein it was held that 'due date' means date for filing return under section 139(1) and not under section 139(4). IT was further observed 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 transf....
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....or which the assessee entered into an agreement with the trust. 16. In the first appeal, the order of the AO was upheld rejecting the claim of the assessee by observing as follows :- "4. I have carefully gone through the impugned order and considered the submissions of the AR. It is pertinent to bring out the material facts of the issue 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 "A....
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....ned facts and provisions of the law, it is held that the claim of the exemption u/s 54B of the Act Is unjustified and contrary to the law. Thus the basis of disallowance of exemption u/s 54B of the Act by the AO therefore, stands modified accordingly. The grounds numbered 2 and 3 have no merit and thus fail." 17. At this juncture, before we proceed to appreciate 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 us....
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....session was not taken. 20. In the light of propositions or ratio, set out by Hon'ble Supreme Court and order of the Tribunal, as noted above, when we analyse the facts of the present case, we note that the AO and first appellate authority have not disputed this fact that the assessee used and invested Rs. 26,84,000/- before expiry of prescribed time limit of two 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 ....