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Reinvestment in approved bonds

Section 54EC requires that the avenues now available for reinvestment to avail relief under Sec. 54EC are not only limited to bonds issued by the National Highways Authority of India and the Rural Electrification Corporation Limited, they are also to be notified by the Central Government in the Official Gazette. No notification has so far been received till date, while the time limit has run out or is running out. What would you suggest?

A PIB press release dated March 30, 2006 (2006) 282 ITR (St.) 6 explains that the investments available for purposes of relief with effect from April 1, 2006 have to be notified. Such notifications have not yet been received and some assessees find that time has run out or will run out shortly by the time notification is issued, though any notification in this regard may have effect from April 1.

The two eligible institutions are not able to issue bonds that are yet to be notified while there is uncertainty about the eligibility of the present bonds.

Those who cross the limit as between April 1, 2006 and the date of notification may be able to avail themselves of the benefit only if there is also a corresponding circular under Sec. 119 by the Board relaxing the time limit beyond the notification date.

Sec. 54 H extends the time limit in case of delayed receipt of compensation for compulsory acquisition.

The Central Board of Direct Taxes itself has the power to extend time the limit in such cases and it is reasonable to expect such relaxation. If the time is not extended by a general circular, the Board is bound to be flooded with individual requests which are bound to be entertained where the delay in deposit is attributable to delayed notification.

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