Violation of Section 269SS: Section 271D penalty Applies, Not Section 68 addition

Smt. Kempanna Shylaja Vs ITO (ITAT Bangalore)

Section 54F amendment restricting exemption to one residential house was prospective, applying only from April 1, 2015 and Violation of section 269SS of the IT Act, if any, would call for a separate penalty under section 271D, not an addition under section 68.

In the case of Smt. Kempanna Shylaja vs. Income Tax Officer (ITAT Bangalore), the appellant contested two primary issues: the disallowance of exemption under Section 54F of the Income Tax Act (ITA) and the addition under Section 68 of the ITA. Here’s a detailed summary:

Disallowance of Exemption under Section 54F

The appellant, along with her children, sold a vacant land in Bangalore North during the relevant assessment year and claimed exemption under Section 54F for a house property constructed in Hebbal, Bangalore. However, the exemption was disallowed by the Assessing Officer (AO) on the grounds that the appellant failed to provide evidence supporting the construction of a residential house and didn’t submit any documentary evidence.

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