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TMI Blog2017 (6) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 14/03/2014. While completing the re-assessment, the Assessing Officer did not grant exemption claimed u/s. 54EC and 54F of the Act. The Assessing Officer also levied interest u/s. 234(1) of the Act from 1-4-2006 upto date of re-assessment (order dated 14-3- 2014). Aggrieved, the assessee preferred an appeal to the first appellate authority. The CIT(A) upheld the order of the Assessing Officer in not granting exemption u/s. 54EC and 54F of the Act. The CIT(A) allowed relief in respect of chargeability of interest u/s. 234B of the Act. The CIT(A) held that interest is to be charged as per section 234B (3) of the Act. 3. We shall first take up for adjudication, the assessee's appeal in I.T.A. 122/Coch/2016. I.T.A. No. 122/Coch/2016 (assessee's appeal) The effective grounds raised in assessee's appeal read as follows:- "2. The Commissioner of Income Tax(Appeals) went wrong in not granting the deduction u/s. 54EC on the ground that the investment in capital gains bonds was made beyond the period stipulated under the said section. The Commissioner of Income Tax(Appeals) failed to note that the appellant could not invest in the bonds within 31st December 2006 but even till 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admittedly extended by notification up to 31/12/2006 can be stretched up to 31.1.2007, by exercising the jurisdiction under the Act." 3.2 Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the first appellate authority. The CIT(A) confirmed the view taken by the Assessing Officer. The relevant finding of the CIT(A) reads as follows: "4.5 It has been observed in paragraph 10 of the Assessing Officer's order that the assessee has made investment beyond the time limit of six months as envisaged by section 54EC and even beyond the further extended time vide notification of the CBDT up to 31.12.2006. The assessee has not submitted any evidence to have ever applied for investment in bonds from any day up to 1.8.2006. Since the assessee has made investment on 31.1.2007, beyond the extended period i.e., 31.12.2006, the claim of exemption u/s. 54EC, is held to have rightly denied by the Assessing Officer." 3.3 Aggrieved, the assessee has preferred the present appeal before the Tribunal. The Authorized Representative reiterated the submissions made before the Income Tax authorities. The Ld. DR supported the orders of the Assessing Officer and the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be issued from 1st July, 2006 and 20th July, 2006 respectively. 6. With a view to removing the hardship caused to taxpayers, the Central Board of Direct Taxes, in exercise of powers conferred by clause (c) of subsection (2) of section 119 of the Income Tax Act, 1961, hereby order that the limitation of six months for making the investment u/s. 54EC of capital gains arising from the transfer of a long term capital asset is extended- (i) upto 30th September, 2006 in case of persons where the longterm capital asset was transferred between 29.09.2005 and 31.12.2005 (both dates inclusive) (ii) upto 31st December, 2006 in case of persons where the longterm capital asset was transferred between 01.01.2006 and 30.06.2006 (both dates inclusive). Sd/- (Sharat Chandra) Director Government of India" 3.5 Though in the Board's Notification it is mentioned that REC and NHAI bonds are available from 01/07/2006, according to the assessee, the same was issued only on 22/01/2007. The fact of issue of these bonds only from 22/01/2207 is noticed by the Hon'ble Bombay High Court in the case of CIT vs. Cello Plast (2012) 76 DTR 439 Bom.). The relevant portion of the judgment of Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment of the Hon'ble Bombay High Court in the case of CIT vs. Cello Plast (supra) which is identical to facts of this case. 3.8 In the result, Ground No. 2 raised by the assessee is allowed for statistical purposes. 4. Ground No. 3 raised by the assessee is regarding eligibility of exemption u/s. 54F of the I.T. Act. 4.1 The brief facts in relation to the ground are as follows: The assessee had made a claim of exemption u/s. 54F of the Act. The claim was denied by the Assessing Officer for the reason that no claim was made in the return of income but only during the course of assessment proceedings. The observation of the Assessing Officer for denying the benefit of deduction u/s. 54F reads as under: "In the instant case, the AR was unable to produce any proof of such deposit into capital gains account scheme except an extract of payment scheduled dated 12.8.2008 as confirmed by the property developer whereby the assessee was found to have paid amount of Rs. 10.50 lakhs before the due date of return of income. Even though the payment of Rs. 10.50 lakhs was made within 31.7.2006 which qualifies for deduction u/s. 54F, the deduction was however disallowed on the ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Ltd. vs. CIT (284 ITR 323), relied on by the Assessing Officer, does not have application to the facts of the case. It was submitted that the Hon'ble Supreme Court only limited the power of Assessing Officer and does not impinge on the powers of the appellate authority. Therefore, it was contended that the CIT(A) ought to have considered the grant of exemption u/s. 54F which was otherwise available under the Act. The Ld. Counsel for the assessee relied on the judgment of the Hon'ble Delhi High Court in the case of CIT vs. Pr. CIT vs. Western India Shipyard Ltd. (379 ITR 289). 4.4 The Ld. DR present was duly heard. 4.5 We have heard the rival contentions and perused the material on record. In the instant case, the claim of exemption (u/s. 54F of the Act) was denied primarily for the reason that assessee had not made the said claim in the return of income filed. The CIT(A) confirmed the view taken by the Assessing Officer and did not consider whether the assessee is entitled to the benefit of exemption u/s. 54F of the Act on merits. The Assessing Officer relying on the judgment of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. vs. CIT (supra) had denied the claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on otherwise than by filing the revised return. However it is not the end of the matter. The Hon'ble Supreme Court has clarified the position further in para 4 of this judgment which makes it explicitly clear that the mandate of this judgment is limited to the power of the assessing authorities and does ot impinge on the power of the Tribunal under s. 254 of the Act. In this view of the matter there remains no doubt whatsoever that if the assessee has failed to claim deduction in the return filed by it, which is otherwise available to it as per law, the doors of justice cannot be closed to the assessee simply for the reason that no revised return was filed making such a claim for deduction. It is simple and plain that the purpose of making assessment is to collect the rightful tax due from the assessee. Filing of revised return by the assessee may be a valid mode of claiming deduction which was omitted to be claimed in the original return. But it is not that if revised return is not filed or the timelimit for the filing of the revised return has expired but the assessment is still pending, that the assessee should be prohibited from making such a claim. Technicalities cannot be all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that an identical issue was considered by the Hon'ble Jurisdictional High Court in the case of CIT vs. B. Lakshmikanthan reported in (198 Taxman 485), the issue was decided in favour of the assessee. 5.3 We have heard the rival contentions and perused the material on record. On identical facts, the Hon'ble Jurisdictional High Court had decided the issue in favour of the assessee. The Hon'ble Kerala High Court has held that when proceedings u/s. 143(1) of the Act has been completed and issued to the assessee, interest is to be levied as per section 234B(3) of the Act from the date of proceedings u/s. 143(1) of the Act. The relevant finding of the Hon'ble Jurisdictional High Court reads as follows: "In this case, the original returns were processed under s. 143(1) of the Act and the proceedings so completed were issued to the assessee. It is only thereafter the Department conducted search and made revised assessments under s.153A of the Act though by accepting returns undisclosed income filed and by issuing proceedings under s. 143(1) r/w s.153A of the Act. We, therefore, hold that the assessments under s. 153A are revised assessments and so much so, interest could be demanded for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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