The Commissioner Of Income Tax, Chennai. Smt.fabiola Stephen v. This Tax Case Appeal Is Filed By The Revenue Raising The Following Substantial Questions Of Law

In the High Court of Judicature at Madras Dated : 13.10.2015Coram : The Honourable Mr.Justice V.RAMASUBRAMANIAN and The Honourable Mr.Justice T.MATHIVANAN Tax Case Appeal No.899 of 2015 The Commissioner of Income Tax,Chennai.Smt.Fabiola Stephen ...Appellant VsSmt.Fabiola Stephen ...RespondentAPPEAL under Section 260A of the Income Tax Act, 1961against the order dated 21.3.2014 made in I.T.ANo.54/Mds/2014 onthe file of the Income Tax Appellate Tribunal, Madras 'D' Bench,Chennai against the order of Commissioner of Income Tax,Chennai-X dated 26.11.2013 passed in C.NO.6502(72)/2013-14/X forthe assessment year 2009-10 against the order of Income Taxofficer, Business ward III(3), Chennai-34 dated 11.11.2011 forthe assesment year 2009-10 for the Pan No.ABJPS9860QFor Appellant : Mr.M.Swaminathan, Sr. Standing Counsel for Mr.T.Ravikumar Judgment was delivered by V.RAMASUBRAMANIAN,J This tax case appeal is filed by the Revenue raising thefollowing substantial questions of law : "(i) Whether on the facts andcircumstances of the case, the Tribunal wasright in holding that the assumption ofjurisdiction by the Commissioner of IncomeTax under Section 263 was not sustainable inlaw? (ii) Is not the finding of the Tribunalbad, especially when the assessee has soldthe property on 21.6.2007 and investment inthe bonds of NHAI had not been made within https://hcservices.ecourts.gov.in/hcservices/ six months from the date of sale as statedin Section 54 EC? and (iii) Whether it was proper for theTribunal on the material placed holding thatSection 263 order was bad especially whenthe assessee has committed default on theconditions laid under the statute as thesame would fall only in the assessment year2009-2010?" 2. Heard Mr.M.Swaminathan, learned Senior Standing Counselfor the Revenue. 3. The respondent/assessee sold a plot of land for aconsideration of Rs.20,67,000/- on 21.6.2007. For the assessmentyear 2008-09, she deposited an amount of Rs.18,25,000/- in thecapital gains account scheme within the stipulated time andavailed exemption under Section 54. 4. But, the assessee should have actually deposited the netconsideration of Rs.20,29,500/- in the capital gains accountscheme. However, in the assessment year 2009-10, the assesseeclosed the deposit in the capital gains account scheme andinvested in the bonds of NHAI, an amount of Rs.18,30,000/- on30.6.2008 and availed exemption under Section 54EC. But, underSection 54EC, the assessee should have made the investment inthe bonds within six months from the date of transfer of theoriginal asset. 5. Since the assessee was clearly in error, the Commissionerof Income Tax issued a notice under Section 263 proposing torevise the assessment. The assessee appeared before theCommissioner and submitted that the amount was originallydeposited under the capital gains account scheme as per theadvice of the bankers. But later, she found out that in order toavail exemption under Section 54EC, the amount had to beinvested in the specified assets. Therefore, she withdrew theamount from the capital gains account scheme and invested thesame in NHAI bonds. The bonds were also not redeemed withinthree years. 6. However, overruling the submissions of the assessee, theCommissioner passed an order on 26.11.2013 withdrawing theexemption granted under Section 54EC. Aggrieved by the saidorder, the assessee went before the Tribunal. The Tribunalallowed the appeal. Aggrieved by the order of the Tribunal, theRevenue is before us. 7. It is true that the assessee did not deposit the amountwithin the period stipulated namely six months for claiming https://hcservices.ecourts.gov.in/hcservices/ 6. However, overruling the submissions of the assessee, theCommissioner passed an order on 26.11.2013 withdrawing theexemption granted under Section 54EC. Aggrieved by the saidorder, the assessee went before the Tribunal. The Tribunalallowed the appeal. Aggrieved by the order of the Tribunal, theRevenue is before us. 7. It is true that the assessee did not deposit the amountwithin the period stipulated namely six months for claiming https://hcservices.ecourts.gov.in/hcservices/ exemption under Section 54EC. But unfortunately, this is a casewhere the assessee, being a lady and an individual, appears tohave been misled by the banker. She deposited a major portion ofthe proceeds in the capital gains account scheme on the adviceof the banker. Therefore, the lenient view taken by theTribunal, though not strictly in accordance with law, does notcall for interference. 8. Accordingly, we dismiss the appeal. -s/d- Assistant Registrar(CO)True Copy Sub-Assistant RegistrarrsTo1.The Commissioner of Income Tax, Chennai2.The Income Tax Appellate Tribunal, Madras 'D' Bench, Chennai.3.The Income Tax officer, Business Ward III(3)Chennai-344.The Assistant RegistrarIncome Tax Appellate TribunalIII rd floor Rajaji Bhavan,Besant Nagar, Chennai-90 5.The Commissioner of Income tax Chennai X +1 cc to Mr.M.Swaminathan vide sr.55847 T.C.A.No.899 of 2015 skv(co)aa26/10/2015