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TMI Blog2014 (3) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction in respect of investment if NHAI Bonds U/s 54 EC of Rs. 45,00,000/-. 2. The Ld. CIT(A)-XXI, Ahmedabad has grossly erred in law in considering the last date for investment U/s 54EC as 10.12.2008 in place of 31.12.2008 as the 'month' would mean that the "full month" which reckoned from the end of the month in which transfer takes place. Therefore, he may be directed to consider the last date for making investment U/s 54EC as 31.12.2008 in place of 10.12.2008. 2. Brief facts as emerged from the corresponding assessment order passed u/s. 143(3), dated 28.11.2011 are that the assessee in individual capacity has sold a flat situated at Lotus Co-operative Society, Usmanpura Ahmedabad for a consideration of Rs.64 lacs. The appellant had computed the Capital Gain at Rs. Nil and declared the same as per the Return of Income. A working of the Capital Gain was admittedly furnished along with the return of income. The basis for "Nil" capital gain was that the gain was stated to be at Rs.56,65,767/- however the assessee had made the investment in NHAI bond of Rs.45 lacs and claimed the deduction u/s.54 EC of IT Act. The assessee has also made an inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was required to invest the capital gain in the specified asset within a period of six months from the date of the transfer and that requirement was not complied with by the assessee; hence, not eligible for the deduction u/s. 54EC of IT Act. Accordingly an addition of Rs.45 lacs was made in the hands of the assessee. Being aggrieved the matter was carried before the First Appellate Authority. 3. It was reiterated before the learned CIT(A) that the due date of six months, as alleged by the AO, was 10th of December 2008, however, the assessee had claimed to have tendered the cheque along with an application for issue of NHAI bond to the bank on 8.12.2008. That cheque was cleared on 17th of December, 2008. It was thus pleaded that on account of the fact that the assessee had submitted the application before the last day of the expiry of six months from the date of the transfer of the capital asset, hence entitled for the deduction u/s.54EC of IT Act. Learned CIT(A) was of the view that the appellant was unable to establish that the impugned application for investment in NHAI bond was actually tendered on 8th of December, 2008. According to him, the seal/stamp and the date wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within a period of six months after the date of transfer. Analyzing this situation, the Board has given the direction that, quote "on consideration of the matter in consultation with the Ministry of Law, it is felt that the foregoing interpretation would go against the purpose and spirit of the section. As the section contemplates investment of the net consideration in specified assets for a minimum period and as earnest money or advance is part of the sale consideration the Board have decided that if the assessee invests the earnest money or the advance received in specified assets before the date of transfer of asset the amount so invested will qualify for exemption under Section 54E of the IT Act, 1961"unquote. 4. From the side of the Revenue, Id. D.R. Mr. P. L. Kureel and Mr. O. P. Vaishnav appeared and stated that the Income Tax Act and the Income Tax Rules have used two types of phraseology in respect of the computation of period for the purpose of prescribing a limitation. The first type of wordings used are "not exceeding 6 months from the date on which application is made" or "any time within a period of 6 months after the date of such transfer". According to Id. D.R. the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order accordingly." The Hon'ble Court has specified that 3 months were to be taken from that day when the order was pronounced because the wordings were "for a period of 3 months effective from today". Likewise, in the case of Chironjilal Sharma HUF v. UOI,(an unreported decision), the relevant extract of the order placed in the compilation, the Hon'ble Supreme Court has directed that the "interest was to be paid within 2 month from today". In an identical fashion, the Hon'ble Bombay High Court in case ofJethmalFaujimal Soniv. ITAT in W.P. No. 1744 of 2010 in order dated April 12, 2010 reported in [2010] 231 CTR 332(Bom .) had directed the Tribunal to dispose of the pending appeal within a period of four months from today. The Id. D.R. has also cited few unreported decisions of the Tribunal as follows: i. Hon'ble ITAT 'G' Bench; Kumarpal Amrutlal Doshi v. The DCIT (Appeal)-33, Navi Mumbai, in A.Y. 2006-07 in ITA No, 1523Mum/2010, order dated 09.02.2011. ii. Hon'ble ITAT 'C' Bench, Ahmadabad; Shri Apsi Ginwala, Shree Ram Engg. & Mfg Industries v. ACIT, Circle-5, Baroda in ITANo. 3226/Ahd/2011 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall be dealt with in accordance with the following provisions of this section." 5.1 After hearing the submissions of both the side we are of the view that to resolve the controversy exactly, it is required to know that for the purpose of Sec 54 EC of the IT Act 1961, the period of investment should be calculated as six months after the date of transfer or to be reckoned 180 days from the date of transfer. This is the crux of the issue. 5.2 We shall first deal with the arguments of learned DR because this controversy was referred to us at the behest of the Revenue Department. The argument of learned DR is that the term "month" is to reckon from the date when an event takes place upto the date of the following month. In other words learned DR has pleaded that in ordinary sense a "month" is a period form a specified date in a month, to the date numerically corresponding to that date in the following month, less one. The argument is that since the statute has prescribed the limitation of six months, therefore, those words i.e. "at any time within a period of six months" must not be replaced by the words "at any time within a period of end of six months". 5.3 We have duly analyzed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntive provisions we may like to mention that it is neither a question of "liberal interpretation of statute" or a 'literal interpretation of statute', but it is a matter of "purposive construction of statute" or "constructive interpretation of statute". A true intention of the enactment is required to be considered by a court of law. In the present case, the intention is to attract investment to be used for the development of infrastructure etc. The question as to whether a statute is mandatory or directory, depends upon the intent of the legislator and not upon the language in which it is clothed. The meaning and intention of the legislator is to judged by the language, but these are to be considered not only from phraseology of the provision, but also by considering its nature, its design, and the consequences which would follow from construing it the one way or the other. Therefore, we have examined the General Clauses Act, 1897 where the "month" shall mean 'a month reckoned according to British calendar'. This controversy has earlier been addressed by certain higher forum and then it was decided that the question whether "month" means a "lunar month" or a "cale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that the words "however considering month during which the default continued" as appeared in Section 271(1)(a) refer only to a month during the whole of which the default continued and not to a month during which only part of which default continued. Likewise in the case of Harnand Rai Ramanand 159 ITR 988 (Raj.),and B.V.Aswathaiah & Brothers 155 ITR 422( Kar.) it was held that a month is a British calendar month . 6. The subtle question is that whether the word "month" refers in this section a period of 30 days or it refers to the months only. Section 54EC, if we read again prescribes that an investment is required to be made within a period of six months. Whether the intention of the legislator was to compute six calendar months or to compute 180 days. To resolve this controversy, we are guided by a decision of Hon'ble Allahabad High Court pronounced in the case of Munnalal Shri Kishan Mainpuri, 167 ITR 415 where answering the dispute in respect of law of limitation the Hon'ble Court has clearly held that there is nothing in the context of section 256(2) to warrant the conclusion that the word 'month' in it refers to a period of 30 days, therefore, refers to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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