Claim of Deduction u/s 54F of Income Tax Act rejected due to late filing of revised ROI: ITAT Directs Re-adjudication [Read Order]

The Rajkot bench of the Income Tax Appellate Tribunal (ITAT) directed re-adjudication to the assessing officer for the rejection of the claim of deduction under section 54F of the Income Tax Act,1961 due to late filing of revised return of income (ROI). 

Kusumben Amritlal Sanghavi, the appellant assessee is an individual and filed the return of income which was subsequently revised by filing the revised return of income and claiming the deduction under section 54F of the Income Tax Act. 

The assessee appealed against the order passed by the Commissioner of Income Tax (Appeals) for confirming the rejection of the claim of deduction by the assessing officer on the ground that the assessee had not invested the fund into a capital gain scheme before the purchase of the residential property before filing of the return of income under Section 139(1) of the Income Tax Act. 

D. S. Varia, the counsel for the assessee contended that the investment in the residential property was made within the time limit of Section 139(4) of the Income Tax Act and the deduction under Section 54F of the Income Tax Act was allowable. 

It was also submitted that the assessee within one year from the sale of the asset and the long-term capital gain whereof was also offered to tax by filing an original return, purchased the residential house and claimed deduction under Section 54F of the Income Tax Act by filing revised return of income and entitled to get relief as claimed for exemption as per the law. 

B. D. Gupta, the counsel for the revenue contended that the assessee was not entitled to get the exemption under Section 54F of the Income Tax Act, since the unutilized amount was not deposited by him before the due date of filing of return of income under Section 139(1) of the IncomeTax Act. 

The bench observed that the assessee had purchased a new residential house within the due date specified under Section 139(4) of the Income Tax Act from the date of transfer of the original asset, the requirement to deposit net consideration received by the assessee in capital gain account scheme as per Section 54F(4) of the Income Tax Act would not be attracted and the assessee would be eligible to benefit of exemption under Section 54F of the Income Tax Act. 

The two-member bench comprising Annapurna Gupta (Accountant) and Madhumita Roy (Judicial) held that the assessee was entitled to get the deduction claimed under section 54F of the Income Tax Act and directed the assessing officer to re-adjudicate the matter for allowing the deduction to the assessee while allowing the appeal filed by the assessee. 

To Read the full text of the Order CLICK HERE

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