2016 (7) TMI 181 - AT - Income Tax

Eligibility of exemption u/s 54 - assessee has filed a belated return - due date of filing the return - Held that - As decided in CIT-II, Chandigarh Versus Ms. Jagriti Aggarwal 2011 (10) TMI 279 - PUNJAB AND HARYANA HIGH COURT due date of filing the return of income as per section 139 of the Act with reference to exemption u/s 54, is subject to the extended period provided under sub section (4) of section 139. It is undisputed that investment in the present appeal were done before this date. Furthermore, Chandigarh Bench of the Tribunal on an identical lines in Sh. Mohan Singh Vs. ACIT 2015 (7) TMI 1111 - ITAT CHANDIGARH in the similar issue of belated return has granted the benefit of section 54 to the assessee. It is not the case that the said decision of the ITAT has been reversed by the Hon ble Jurisdictional High Court. - Decided in favour of assessee

Summary

Issues:
1. Allowance of deduction u/s 54 of the Income Tax Act.
2. Interpretation of the due date for filing return of income u/s 139(1) in relation to exemption u/s 54.
3. Validity of revised return filed after the due date.

Analysis:

Issue 1: Allowance of deduction u/s 54
The Assessing Officer disallowed the claim of exemption u/s 54 as the assessee did not file the original return of income within the prescribed time limit u/s 139(1). The AO required evidence of depositing the capital gain amount under the Capital Gains Accounts Scheme before the due date of filing the return. The CIT(A) allowed the exemption u/s 54 as the investment in the new house was made before the due date of filing the return of income u/s 139. The Tribunal upheld the CIT(A)'s decision, citing similar cases and the jurisdictional High Court's interpretation that the due date for filing the return is subject to the extended period provided under sub-section (4) of section 139.

Issue 2: Interpretation of due date for filing return of income u/s 139(1)
The Revenue argued that the due date should be as prescribed in sub-section (1) of section 139 based on a Supreme Court decision. However, the CIT(A) and the Tribunal relied on a High Court decision which stated that the due date for filing the return of income is subject to the extended period provided under sub-section (4) of section 139. The Tribunal upheld the CIT(A)'s decision, considering the jurisdictional High Court's judgment and a similar decision by the Chandigarh Bench.

Issue 3: Validity of revised return filed after the due date
The Revenue contended that a belated return cannot be revised and should not be the basis for granting exemption u/s 54. The assessee argued that the High Court's decision on identical facts should be followed. The Tribunal upheld the CIT(A)'s order, emphasizing the importance of the High Court's decision and the benefit granted to the assessee in a similar case involving a belated return.

In conclusion, the Tribunal dismissed the Revenue's appeal and upheld the CIT(A)'s order, allowing the exemption u/s 54 based on the interpretation of the due date for filing the return of income and the validity of the revised return filed by the assessee.