Tribunal allows appeal, condones delay, upholds deduction for multiple residential properties.

The appeal was allowed by the Tribunal, with the delay in filing condoned due to the peculiar circumstances of the case. The assessee's eligibility for deduction under Section 54 for investments in multiple residential properties was upheld. The Tribunal interpreted "a residential house" to include multiple houses and clarified that the amendment restricting the deduction to one house did not apply to the relevant assessment year.

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Issues Involved:
1. Condonation of Delay in Filing the Appeal
2. Eligibility of Deduction under Section 54 of the Income Tax Act for Multiple Residential Properties

Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The appeal by the assessee was delayed by 554 days. The delay was attributed to the assessee's initial decision not to appeal due to the litigation cost and counsel's fees. The assessee later received a penalty notice under Section 271(1)(c) of the Income Tax Act, prompting him to file an appeal. The Tribunal considered the assessee's affidavit, which stated that he was unaware that penalty provisions would follow the order of the CIT(A) and that he was not conversant with the intricacies of the Income Tax Act. The Tribunal, referencing the Supreme Court decision in Collector, Land Acquisition vs. MST. Katiji and Others, condoned the delay, noting the peculiar facts and circumstances of the case, including the assessee's age and desire for peace of mind.

2. Eligibility of Deduction under Section 54 of the Income Tax Act for Multiple Residential Properties:
The core issue was the eligibility for deduction under Section 54 of the Act concerning the purchase of two new residential properties from the sale consideration of an old property. The Tribunal referenced the Co-ordinate Bench decision in the case of Ravishankar vs. ACIT, which interpreted Section 54 to allow deductions for investments in multiple residential properties. The Tribunal noted that the amendment to Section 54, which restricted the deduction to "one residential house in India," was effective from 01.04.2015 and did not apply to the assessment year in question (A.Y. 2010-11).

The Tribunal further cited the High Court of Karnataka's decision in Commissioner of Income Tax vs. Khoobchand M. Makhija, which clarified that the term "a residential house" should not be construed as singular but could include multiple houses. The Tribunal also referred to similar judgments from the High Courts of Madras and Andhra Pradesh, which supported the view that prior to the amendment, there was no restriction on the number of residential properties for claiming deduction under Section 54.

The Tribunal concluded that the assessee's claim for deduction under Section 54 for investments in two residential properties was valid and allowed the grounds raised by the assessee.

Conclusion:
The appeal was allowed, with the Tribunal condoning the delay in filing and upholding the assessee's eligibility for deduction under Section 54 for multiple residential properties. The decision emphasized the interpretation of "a residential house" to include multiple houses and the non-applicability of the amendment restricting the deduction to one house for the assessment year in question.

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