KAMLA DEVI RASTOGI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) PRESENT petition is filed seeking following reliefs :

(2.) BRIEF facts of the present case, inter alia, are that petitioner sold a plot of land at Jaipur (Rajasthan) in the month of April, 2006 for Rs. twenty two lakhs. The entire sale amount was deposited by the petitioner in the month of April, 2006 itself under the Capital Gains Accounts Scheme, 1988 as a special term deposit for thirty six months under Section 54F of Income Tax Act with State Bank of India, Branch Malviya Nagar, Jaipur. Petitioner filed her return for the financial year 2006 -07 specifically showing the capital gains out of sale proceed of the said plot. The capital gains account stood matured in the month of April, 2009, therefore, approval of the Assessing Income Tax Officer was necessary.

(3.) CONSEQUENTLY , approval was sought vide application dated 11.5.2009, however, learned Assessing Officer (Income Tax Officer) accorded his approval for release of Rs. seventeen lakhs only vide letter No. 690 dated 4.6.2009 and Rs. five lakhs were withheld for no reason. It is further contended that Income Tax Officer/Assessing Officer had absolutely no jurisdiction to withhold any amount, however, amount was illegally withheld by the Income Tax Officer. Thereafter, Income Tax Officer, Kotdwar vide order No. 1558 dated 13.12.2009 assessed the tax amounting Rs. four lakhs forty thousand on the capital gains and petitioner was permitted to deposit the same in two installments. Petitioner paid the tax as assessed by the Assessing Officer. Petitioner preferred an appeal against the assessment order, however, the same was dismissed vide order dated 8.2.2010. Initially stand taken in the petition was that under Section 54F (1) of the Act, out of the sale proceed, if assessee purchases another immovable property within the stipulated time then no tax can be assessed on the alleged capital gains, however, as per Section 54EC of the Act, a provision is made to keep the entire sale proceed in a capital gains account for a locking period of three years, therefore, assessing the income tax on the alleged capital gains in the event of failure to purchase another immovable property within the stipulated time is contrary.