- (1.) Through the present petition, the petitioner seeks quashing of order dated 03.03.2015 (Annexure P-12), through which, application of the petitioner to condone the delay and for the grant of extension of time to comply with the requirements of Section 54-F of the Income Tax Act, 1961 (for short the Act) for claiming a deduction thereunder, was rejected by the Central Board of Direct Taxes (for short the Board), on the ground that the petitioner had failed to demonstrate compliance of Section 119 (2)(c)(ii) of the Act.
(2.) The relevant facts, which need to be noticed for adjudicating upon the present petition are that on 28.06.2011, the petitioner sold 04 kanals of land in Village Kansal, U.T., Chandigarh for Rs. 2.25 crores and since this amount constituted capital gains, on 28.07.2012, such amount was deposited under the Capital Gains Tax Scheme, 1988 by way of a Fixed Deposit in the State Bank of Patiala. It is the case of the petitioner that even after the aforesaid 04 kanals of land had been sold, 27 kanals 16 marlas continued to be in its ownership and possession, on which a residential house was intended to be constructed, but the same could not be done in view of the interim orders granted by this Court, as also the Apex Court, prohibiting construction in the area in which the afore-referred 27 kanals 16 marlas of land was situated. According to the petitioner, the interim order still continues. Since the petitioner was precluded from constructing the residential house, within the period of three years, as stipulated under Section 54-F of the Act, fearing that the afore-referred amount of Rs. 2.25 crores, being capital gain from sale of a long term capital asset, would be taxed, an application was moved on its behalf for seeking condonation of delay and simultaneous grant of extension of time beyond the stipulated three years to raise the construction. No heed, having been paid to the application, the petitioner moved another representation and when that too went un-responded to, a petition was filed before this Court being C. W. P. No. 11752 of 2014 Shivinder Singh Brar vs. Commissioner of Income Tax, Chandigarh, which was disposed of through order dated 31.10.2014 with a direction to the Board to decide the petitioner's application within three months from the date of receipt of a certified copy of that order. In compliance, through order dated 03.03.2015, a decision by way of rejection of the petitioner's application was taken by the Board. According to the Board, the petitioner had failed to demonstrate compliance with the condition stipulated in Section 119 (2)(c)(ii) of the Act. It is this order, which is impugned through the present petition.
(3.) Mr. Alok Mittal learned counsel appearing on behalf of the petitioner assailed the order impugned in the present petition on several grounds. He urged that the petitioner, in order to claim the deduction under Section 54-F of the Act, had all good intentions to utilize the amount of Rs. 2.25 crores received by it as capital gain from the sale of 04 kanals of land for constructing a house on the 27 kanals 16 marlas of land, which remained in the ownership and possession of the petitioner, but was precluded from doing so on account of the interim prohibitory orders passed by this Court and the Apex Court. It was thus submitted that to claim the aforededuction, the petitioner could not utilize the said amount of capital gains to construct a residential house within the stipulated time of three years, for reasons beyond its control. It was submitted that the hardship on the part of the petitioner was genuine, and therefore, the Board had erred in rejecting the application of the petitioner seeking extension of time to raise the construction after the vacation of the interim prohibitory orders enabling it to claim deduction under Section 54-F of the Act.;