TaxTMI 
TaxTMI 
2020 (5) TMI 183
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.... course of assessment proceedings for the assessment year 2013-14, the notice U/s 148 of the Act was issued on 27.01.2016 stating that the assessee has wrongly claimed deduction U/s 54F of the Act as the assessee has deposited a sum of Rs. 22,50,000/- under capital gain account scheme on 03.12.2011 after due date of filing of return of income i.e, 31.07.2011, therefore, the income of the assessee has escaped assessment within the meaning of section 147 of the Act. In response, the assessee submitted his return of income on 24.03.2016 and thereafter, after considering the submissions of the assessee, the assessment was completed wherein the Assessing Officer has denied the claim of the assessee U/s 54F of the Act amounting to Rs. 17,09,798/-. Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A) who has sustained the addition and against the said findings, the assessee is in appeal before us. 3. During the course of hearing, the ld. AR submitted that the assessee has earned Long Term capital gain of Rs. 17,09,798 from sale of plots at a consideration of INR 22,50,000/- on 10 February 2011. The sale consideration of the plots sold was received by the ass....
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....purposes for which the exemption has been claimed, i.e., for purchase of the residential house. The Appellant have solely utilized such funds for purchase of residential property and the same has not been rebutted by the Ld. AO; * The Appellant have duly disclosed such information in the return of income filed; * It is a well settled law that an incentive provision has to be construed liberally with the intent of law. 5. It was further submitted that the Jaipur Bench of the Tribunal in the case of Goverdhan Singh Shekhawat Vs. ITO ward 6(1), Jaipur reported in 102 taxmann.com 50 has held as under: "Thus, it is viewed that the assessee's claim will qualify for exemption under section 54F as he has, in substance, complied with the requirements of sub-section (4) for the impugned assessment year as the whole of the compensation has been deposited in the said bank account and the withdrawals are limited to purchase of plot of land and construction thereof and are monitored closely by the assessee himself......................... In the instant case, even though the saving bank account technically speaking is not a capital gain account, the ess....
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....ha v. ITO (148 Taxman 1) * ITAT Mumbai in case of Satish P. Malhotra vs. ITO 16(1)(2) (ITA No.6877/Mum/2014) * ITAT Mumbai in case of Ms. Satyavati Arvind Kotian vs. ITO - 26(2)(2) (ITA No.5036/Mum/2017) 7. It was further submitted that the intention or bona fide is neither under doubt nor it is doubted. Moreover, it is a settled law that an incentive provision has to be construed liberally as held the Hon'ble Supreme Court in case of Sanjeev Lal 365 ITR 389 as under:- "The intention of the Legislature or the purpose with which the said provision has been incorporated in the Act, is also very clear that the assessee should be given some relief. Though it has been very often said that common sense is a stranger and an incompatible partner to the Income-tax Act and it is also said that equity and tax are strangers to each other, still this Court has often observed that purposive interpretation should be given to the provisions of the Act. In the case of Oxford University Press v. CIT [2001] 247 ITR 658/115 Taxman 69 this Court has observed that a purposive interpretation of the provisions of the Act should be given while considering a claim for exemp....
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....ival submissions and perused the material available on record. From perusal of the reasons recorded by the Assessing Officer before issuance of notice U/s 148 of the Act, the undisputed facts which are emerging that the assessee sold a plot of land on 10.01.2011 for a consideration of Rs. 22,50,000/- and the said amount was deposited in FDRs maintained with ICICI Bank on 21.1.2011. The FDRs were encashed and the maturity proceeds of Rs. 23,66,223/- so received were deposited in Canara Bank on 03.12.2011. On the same day, out of the maturity proceeds of FDRs, the assessee has made fresh deposits of FDRs of Rs. 22,50,000/- and this time, these FDRs were maintained with Canara Bank under the capital gain account scheme. These facts are also corroborated by the bank statement of the assessee appearing at APB page 66 and certificate issued by the Canara Bank dated 27.10.2015 available at APB page 89. Thereafter on 21.05.2012, three FDRs matured/encashed and amount credited in assessee's bank with maturity value Rs. 15,32,232/- and on the very next date i.e, 22.05.2012, the said maturity proceeds were utilized for making payment of Rs. 18,00,000 to Shir Arvind Kumar Khurana, the person f....
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.... return in terms of Sub-Section 4 of Section 139 of the Act. It was held as under:- From a plain reading of sub-section (2) of Section 54 of the Income-tax Act, 1961, it is clear that only section 139 of the Income-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, wherei....
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.... the return relates to a previous year relevant to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, the reference to one year aforesaid shall be construed as a reference to two years from the end of the relevant assessment 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 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 ever relevant Assessment Year. 3. Fathima Bai v. ITO, [2010] 32 DTR 0243 (Kar.), 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 presc....
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....ogether 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 utilized wholly or partly for the purchase or construction of the new asset within the period specified in Sub-Section (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 i....
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.... fulfil the requirement under Section 54 of the Income Tax Act for exemption of the capital gain from being charged to Income Tax on the sale of property used for residence up to March 30, 1998, inasmuch as the return of Income Tax for the assessment year 1997-98 could be furnished before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment whichever is earlier under Sub-section (4) of Section 139 of the Income Tax Act, 1961. 7. I.T.C. Ltd. v. CCE [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 ....
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....enal, the burden would lie on the revenue to prove that the conditions laid down by the section are satisfied. Commissioner of Income-tax, West-Bengal v. Gangadhar Banerjee & Co. (p) Ltd., 57 I.T.R. 176, 184 Secondly, penal statutes have to the construed strictly in the sense 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." And the relevant findings of Hon'ble High Court read as under: "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. T....