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TMI Blog2014 (8) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... – Decided against Revenue. - T. C. (A). No. 49 of 2014 - - - Dated:- 14-7-2014 - R. Sudhakar And G. M. Akbar Ali,JJ. For the Appellant : Mr. J. Narayanasamy Senior Standing Counsel JUDGMENT (Delivered by R. Sudhakar, J.) The appeal has been filed by the Revenue challenging the order of the Income Tax Appellate Tribunal 'B' Bench, Chennai, dated 25.6.2013 made in ITA No.1693/Mds/2012 for the assessment year 2007-2008, by raising the following substantial questions of law: 1. Whether on the facts and in the circumstances of the case the Tribunal has jurisdiction and was right in holding that the assessee is entitled to capital gains exemption under Section 54EC even though the assessee had invested in REC bonds beyond the stipulated period of six months, when the section does not provide for extension of the time limit for investment? 2. Whether on the facts and in the circumstances of the case the Tribunal was right in holding that the assessee is entitled to capital gains exemption under Section 54EC on the ground that the bonds were not available till the last date for investment when the bonds were available for the period of more than 5 months ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. The assessee fails in his appeals. In result, the assessee's appeal is dismissed. 2.3. On further appeal by the assessee, the Tribunal, placing reliance on the decision of the Bombay High Court in Commissioner of Income Tax v. Cello Plast, (2012) 24 Taxmann.com 111 (Bom.), came to the conclusion that since the bonds were not available during the period from 1.4.2007 to 1.7.2007, the assesee had no other option except to invest in REC Bonds on 2.7.2007. The assessee's plea for grant of capital gain exemption under Section 54EC of the Act was accepted and the appeal was allowed. Aggrieved by the said order passed by the Tribunal, the Revenue has filed this appeal. 3. The main plank of the argument of the learned Senior Standing Counsel appearing for the appellant is that the assessee could have invested in REC Bonds during the period from 22.11.2006 to 31.3.2007, during which period REC Bonds were available, and inasmuch as the assessee failed to invest in REC Bonds when the same were available, he cannot claim capital gains exemption under Section 54EC of the Act. 4. We have heard the learned Senior Standing Counsel appearing for the appellant and perused the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount of investment by an assessee in such bond) as it thinks fit : Provided that where any bond has been notified before the 1st day of April, 2007, subject to the conditions specified in the notification, by the Central Government in the Official Gazette under the provisions of clause (b) as they stood immediately before their amendment by the Finance Act, 2007, such bond shall be deemed to be a bond notified under this clause; (ba) long-term specified asset for making any investment under this section on or after the 1st day of April, 2007 means any bond, redeemable after three years and issued on or after the 1st day of April, 2007 by the National Highways Authority of India constituted under section 3 of the National Highways Authority Act, 1988 (68 of 1988) or by the Rural Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956 (1 of 1956). 6. Section 54EC of the Act contemplates that where capital gain arises from the transfer of a long term capital asset and the assessee has, at any time within a period of six months after the date of such transfer, invested the whole or any part of capital gains in the long-term spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of six months commencing from the date of the sale of the factory by the respondents and even thereafter till the extended date of 31.12.2006 under the CBDT Circular. That the bonds were available for a limited time during this period between 1.7.2006 to 3.8.2008, makes no difference. The respondents had time till 21.9.2006, to invest in these bonds to avail the benefit under section 54EC. Section 54EC entitles a person to avail of the right conferred thereby at any time during the period of six months from the date of sale of the asset. The respondents cannot be deprived of this right conferred by the Act for no fault of theirs. Thus, the availability of the bonds only for a limited time during this period cannot prejudice the assessee's right to exercise the same upto the last date. The bonds were admittedly not available except during the said period. 18. Lex not cogit impossibila (law does not compel a man to do that which he cannot possibly perform) and impossibilum nulla oblignto est (law does not expect a party to do the impossible) are well known maxims in law and would squarely apply to the present case. The statute viz. Section 54EC of the Act provides for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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