Smt. Babitha Kemparaje Urs Vs CIT (ITAT Bangalore)
Income Tax Appellate Tribunal (ITAT) Bangalore Bench recently set aside a revision order issued by the Commissioner of Income Tax (CIT) against Smt. Babitha Kemparaje Urs. The case involved a deduction claimed under Section 54F of the Income Tax Act, 1961, related to the investment in a new residential property. The ITAT’s decision hinged on the CIT’s failure to provide adequate hearing opportunities to the taxpayer and the Assessing Officer’s (AO) insufficient inquiry during the original assessment.
The taxpayer’s assessment for the relevant year was completed on December 1, 2011, with the AO allowing a deduction under Section 54F, resulting in a total income of Rs. 1,90,010. However, the CIT subsequently initiated revision proceedings under Section 263 of the Act, alleging that the taxpayer had not fully complied with the conditions for claiming the Section 54F deduction. Specifically, the CIT noted that a sum of Rs. 11,50,000 was deposited in a capital gain scheme on December 14, 2009, and a site was purchased on May 6, 2010, for Rs. 21,60,000. The CIT contended that the deposit in the capital gain account scheme was made beyond the due date for filing the return of income, and the construction of the new house was not completed within the stipulated three years from the date of transfer. Consequently, the CIT issued a show cause notice on February 28, 2014, and, in the absence of the taxpayer’s appearance, passed a revision order on March 27, 2014, disallowing the deduction and directing the AO to re-assess the case.
