TITLE: The term “month” in s.
54E, 54EA, 54EB & 54EC does not mean “30 days” but the “calendar month”.
So, the expression “within a month” means “before the end of the calendar
month”
CASE: Alkaben
B. Patel vs. ITO (ITAT Ahmedabad) (Special Bench)
The assessee sold a flat on 10.06.2008. It made an
investment in s. 54EC Bonds on 17.12.2008 and claimed an exemption from the
capital gains. The AO held that the investment was not made “within a period of six months from the date of the transfer of the
asset”. The assessee contended that the word “month” meant till the end of the month of December 2008.
On this, the Special Bench had to consider “whether for the purpose of Section 54EC of IT Act, 1961, the period of
investment of six months should be reckoned after the date of transfer or from
the end of the month in which transfer of capital asset took place?”
HELD by the
Special Bench:
Sections 54E, 54EA, 54EB &
54EC require the investment to be made “within a period of six months after
the date of such transfer”. The subtle question is that
whether the word “month” refers in this section a period of 30 days or it
refers to the month only. The term ‘month’ is not defined in the Income-tax
Act. Therefore, its meaning has to be understood as per the General Clauses
Act, 1897 which defines the word “month” to mean a month reckoned according to
the British calendar. In Munnalal
Shri Kishan Mainpuri167 ITR 415 (All) it was held in the
context of limitation u/s 256(2) that the word ‘month’ refers to a period of 30
days and, therefore, the reference to “six months” in s. 256(2) is to “six
calendar months” and not “180 days”. On some occasions, the Legislature had not
used the term “Month” but has used the number of days to prescribe a specific
period. For example, the First Proviso to s. 254(2A) provides that the Tribunal
may pass an order granting stay but for a period not exceeding 180 days. This
is an important distinction made in the statute while subscribing the
limitation/ period. This distinction thus resolves the present controversy by
itself.