Satyanarayana Viswanadha Vs ITO (ITAT Visakhapatnam)
The Income Tax Appellate Tribunal (ITAT) Visakhapatnam recently ruled on a case where the assessee sought exemption under Section 54F of the Income Tax Act, even though the claim was not initially made in the return of income but instead in response to a notice under Section 148. The assessee, an individual receiving pension, had entered into a development agreement for constructing apartments. While the return for the assessment year (AY) 2012-13 did not initially include the claim for exemption, the assessee later filed a return in response to the Section 148 notice. The Assessing Officer (AO) initially rejected the claim for exemption under Section 54F, citing the absence of such a claim in the return.
The Tribunal, after considering the submissions, pointed out that the Appellate Authorities are not restricted from entertaining a fresh claim even if it was not included in the original return of income. In the present case, the assessee had made the claim before both the AO and the Commissioner of Income Tax (CIT), and the Tribunal referred to previous judgments, including the R. Venkata Dhana Lakshmi case, which allowed for such a deduction. It emphasized that Section 54F is a beneficial provision aimed at encouraging housing investments and should be interpreted liberally. Therefore, the Tribunal set aside the lower authorities’ orders, directing the AO to verify the facts regarding the acquisition of a new asset and grant the deduction under Section 54F.
