Commissioner Of Income Tax,Chennai v. Sr. Standing Counsel

IN THE HIGH COURT OF JUDICATURE AT MADRAS THE HONOURABLE DR.JUSTICE VINEET KOTHARI &THE HONOURABLE MR.JUSTICE KRISHNAN RAMASAMY T.C.A.No.456 of 2017 Commissioner of Income Tax,Chennai. Vs. .. Appellant Smt. Umayal Annamalai .. Respondent Prayer: Tax Case Appeal filed under Section 260-A of the IncomeTax Act, 1961 against the order of the Income Tax AppellateTribunalMadras“A”Bench,dated22.04.2016inITA.No.415/Mds/2015 against the Order of the Commissioner ofIncome Tax (Appeals), Chennai -34, made in ITA No. datedagainst the Order of the Commissioner of Income-Tax(Appeals)-VI,Chennai-34 dated 30/10/2014 made in ITA NO.709/13-14/A-VI, andagainst the Order of the Commissioner of Income Tax (Appeals),Chennai -34, made in ITA No. dated against the Order of theIncome Tax Officer made in the order of the AssistantCommissioner of Income-Tax, Circle-I, Cuddalore, dated 4/12/2009and made in PAN/GIR NO. /U-11706 for the Assessmentyear 2005-2006. For Appellant : Mr. J. Narayanasamy Sr. Standing Counsel For Respondent(s) : Mr.N.Quadir Hoseyn (Delivered by Dr.Vineet Kothari, J.) The Court was held by Video Conference, as per theResolution of the Full Court dated 3 July 2020, by Judges attheir respective residences and the counsel, staff of theCourt appearing from their respective residences. 2. Heard Mr.J.Narayanaswamy, learned Senior Standing counselappearing for the appellant Department and Mr.N.Quadir Hoseyn,learned counsel appearing for the respondent. https://hcservices.ecourts.gov.in/hcservices/ 3. The Revenue has filed the present appeal underSection 260-A of the Income Tax Act, purportedly raising thefollowing substantial questions of law for consideration.“ 1. Whether on the facts and in thecircumstances of the case the tribunal was rightand justified in granting exemption u/s 54F whenthe unutilised portion of the sale proceeds werenot deposited in the capital gains accountscheme before the due date for filing of returnu/s 139(1)? 2. Whether on the facts and in thecircumstances of the case the tribunal was rightin interpreting the provisions of section 54F toconclude that the assessee is entitled forexemption ignoring the ration of the decisionsreported in 197 taxman 52?' 4. The learned Tribunal, with regard to exemption underSection 54 F(1) of the Act, with respect to capital gains earnedby the assessee during the previous year, has given thefollowing finding of facts in paragraph 8 and the relevantportion of paragraph 8 is quoted hereunder; ' The assessee has complied the provisionsconsidering the dates as under:-(i) Date of transfer of original asset :14.2.2005(Ii) The date of filing of return: 17.3.2006(iii) Due date of return for the Assessment year 2005-06 :31.07.2005(iv) Due date of filing belated return :31.03.2007 (v) Possession of theproperty :15.12.2007 "On considering the provisions of law and facts ofthe case, the assessee has invested Rs.68,00,000/-before due date of filing belated return i.e.31.03.2007 and took the possession as per thefindings of the Commissioner of Income Tax (Appeals)on 15.12.2007, being within three years from the dateof transfer/sale of original asset being 14.02.2005.The assessee has not invested in Capital Gain AccountScheme before 139(1) of the Act but complied with theconditions u/s.54F(1) of the Act by purchasing andconstruction of residential property within threeyears from the date of transfer of original asset "On considering the provisions of law and facts ofthe case, the assessee has invested Rs.68,00,000/-before due date of filing belated return i.e.31.03.2007 and took the possession as per thefindings of the Commissioner of Income Tax (Appeals)on 15.12.2007, being within three years from the dateof transfer/sale of original asset being 14.02.2005.The assessee has not invested in Capital Gain AccountScheme before 139(1) of the Act but complied with theconditions u/s.54F(1) of the Act by purchasing andconstruction of residential property within threeyears from the date of transfer of original asset which is not disputed in the assessment proceedingsor in appellate proceedings. The provisions of Sec.54F are beneficial provisions and are to beconsidered liberally in the aspect of limitationperiod. But the investment in residential property ismust which the assessee has proved with evidence andcomplied before the lower authorities. The learnedCommissioner of Income tax (Appeals) relied on thelegal provision and submissions of the assesseeexhaustively with judicial decisions. Considering thefactual aspects, genuineness of the transactions andbeneficial aspects of the provisions, we are of theopinion that the Commissioner of Income Tax (Appeals)has rightly construed the findings and theexplanation of the assessee with observation in hisorder and allowed the deduction u/s.54F of the Act.Therefore, we are not inclined to interfere with theorder of Commissioner of Income Tax (Appeals) anddismiss the ground of the Revenue.' 5. Though the Revenue stake involved in the presentcase is much below the limit of rupees one crore for withdrawalof the appeal by the Revenue, since the present case involvedsome audit objection because of exemption in the said Circular,the learned counsel for the Revenue press the appeal on merits. 6. However, after hearing both the learned counsel, weare satisfied that the finding of the facts arrived at by thelearned Tribunal are perfectly in order and justified andcorrect on the basis of facts stated in the quoted paragraph 8of the order. The assessee has clearly satisfied the conditionsfor availing the benefit of exemption under section 54F of theAct, as it has purchased new property and has taken thepossession within the stipulated period of three years, asaforesaid. Thus, we do not find any perversity in the saidfindings of facts given by the learned Tribunal. 7. Therefore, in our opinion, no substantial questionof law arises in the present appeal filed by the Revenue and itis without any merits. Accordingly, the appeal filed by theRevenue is dismissed. There shall be no order as to costs. Sd/- Assistant Registrar //True Copy// Sub Assistant Registrar To 1.The Commissioner of Income Tax,Chennai. 2.The Income Tax Appellate Tribunal'A' Bench, Chennai 3.The Assistant Commissioner of Income TaxCircle-I, Cuddalore +1cc to Mr.N.Quadin Hoseyn, Advocate in SR.NO..25087 T.C.A.No.456 of 2017VG-II(CO)RV(29/9/2020)