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Facts
The assessee invested Rs. 13,50,000/- in REC Bonds on 16.07.2013 to claim deduction under section 54EC, but this investment was made 19 days after the prescribed date. Consequently, the CIT(A) disallowed the deduction from Long Term Capital Gains. The assessee attributed the delay to a severe family trauma following his father's death on 29.01.2013, which necessitated frequent travel and caused significant emotional distress.
Held
The Tribunal found the assessee's reasons for the delay acceptable, noting that the legislative intention of Section 54EC was not frustrated. It held that the delay was due to genuine and unavoidable circumstances. The Tribunal therefore directed the authorities to grant the assessee the benefits of the investment made in REC Bonds under section 54EC of the Income Tax Act, 1961.
Key Issues
Whether the delay in making an investment in specified bonds under Section 54EC of the Income Tax Act can be condoned by tax authorities given a valid and justifiable reason.
Sections Cited
54EC
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
ORDER Per Dr. B. R. R. Kumar:- The present appeal has been filed by the assessee against the orders of ld. NFAC/CIT(A), New Delhi dated 05.06.2023.
The assessee has raised the following grounds:
1. The Learned Assessing Officer DCIT, Circle-2, Noida and Learned CIT(A), NFAC, Delhi has erred and framed the order which is bad in Law and on facts of the case by not considering the genuine submissions of the assessee, stating the following reasons. i. There is no provision in the income tax act which empowers the AO or the CIT(A) to condone the delay of investment in specified assets for availing the benefits of deduction u/s 54EC. ii. The case laws cited by the appellant do not directly relate to the issue of condoning the delay in investing in specified bonds u/s 54EC.
3. The assessee purchased residential house and also invested in REC Bonds of Rs. 13,50,000/- on 16.07.2013, which is 19 days after the prescribed date. The ld. CIT(A) disallowed
Pankaj Mathur the deduction from LTCG holding that the investment in REC Bonds was delayed by 19 days post prescribed period. The assessee submitted that, the father of the assessee was in ICU for a month and ultimately breathed lost on 29.01.2013 which laid to the trauma in the family and assessee had to move from Delhi to Chandigarh to Lucknow and to Bangalore. The reasons given by the assessee are acceptable and since the legislative intention is not counteracted, it is hereby directed that the assessee be given the benefits of investment made in REC Bonds u/s. 54EC of the Income Tax Act 1961.
In the result, the appeal of the assessee is allowed.
Order Pronounced in the Open Court on 09/02/2024.