KASI VISWANATHAN RAMANATHAN,CHENNAI vs. ITO NON CORPORATE WARD 16(4), CHENNAI

The assessee filed this appeal against the order of the Commissioner of Income Tax (Appeals)-4, Chennai in ITA

Shri Kasi Viswanathan Ramnathan, the assessee is a salaried individual. The assessee along with legal heirs received his share on sale of property made on 23rd December, 2011, but he received on the consideration on 16.01.2012. The assessee acquired a land for ₹.59,95,000 on 05.03.2012 and constructed a residential property on the same within the time stipulated under Section 54F of the Act and claimed deduction under Section 54F in the return filed for assessment year 2012-13. The A.O restricted the exemptions to the expenses incurred till 31.07.2012, as the assessee failed to invest unutilized portion in Capital Gains Deposit Scheme. Aggrieved against the order of Ld. A.O., the assessee preferred an appeal before the CIT(A). The learned CIT(A) dismissed the appeal. Aggrieved against that order, the assessee filed this appeal before the Tribunal.

The Ld. A.R. submitted that assessee invested the capital gains within the time stipulated under Section 54F of the Act. The assessee out of abundant caution also filed his return of income within the due date specified under Section 139(1) of the Act claiming exemption under Section 54F of the Act including the amount which had not been utilized before 31.07.2012. The assessee utilized the entire sale consideration in the construction of the building within the time limit specified under Section.54F of the Act. The Ld. A.R. relied on the following case laws: i) Hon’ble Karnataka High Court in the case of C.I.T Vs. Shri K.ramachandra Rao reported in [2015] 56 taxmann.com 163(Karnataka) ii) Mumbai Tribunal in the case of Kishore, [2012] 24 taxmann.com 11 iii) Hon’ble Madras High Court in the case of Venkata Dilip Kumar [2019] 111 taxmann.com 180(Madras)

Per contra, Ld. D.R. supported the orders of the lower authorities.

We have heard the rival submissions and perused the material available on record. After examining the facts and case laws relied on by the assessee, we find that mere non compliance of a procedural requirement under Section 54(2) itself cannot stand in way of assessee in getting benefit under Section 54, if he is, otherwise, in a position to satisfy that mandatory requirement under Section 54(1) is fully complied with within time limit prescribed therein. Therefore, we direct the A.O. to allow the total investments made by the assessee under Section 54F of the Act after satisfying whether the impugned investment was utilized for the construction of the house within the time limit specified under Section 54F of the Act.

In the result, the appeal of assessee is treated as allowed for statistical purposes.