2021 (12) TMI 730 - AT - Income Tax

Tribunal Corrects Errors, Allows Deduction for Multiple Residential Units

The Tribunal reconsidered the case due to mistakes apparent on the record, including the non-consideration of submitted documents and relevant case laws. ... Rectification of mistake u/s 154 - Miscellaneous Applications are filed by the assessees’ seeking recall of the order of the Tribunal [2021 (6) TMI 669 - ITAT HYDERABAD] - Deduction u/s 54F - ITAT remitted the issue to file back to the AO for verification for the allotment of flats, which have been allotted to the assessee in a Block/Tower or in different Blocks/Towers - AR submitted the note along with case law on 28/05/2021, which was not taken into consideration while passing the order - HELD THAT:- To avoid physical contacts due to the global pandemic COVID-19, drop box system for filling any physical documents has been arranged in the office premises w.e.f. 14/08/2020. The ld. AR filed the documents in physical in the drop box, which could not be placed before the Bench at the time of hearing of this appeal as well as up to passing of the order and, therefore, there was no occasion to consider the said documents while passing the order. The said documents were also filed before the office of the DR, ITAT. We make it clear that the main cases had been heard on 27/05/2021 on virtual mode because of Covid-19 pandemic lockdown imposed and the same only forms the sole reason of these assessees’ as well as their learned counsel having not able to place on record various judicial precedents deciding the issue herein against the department; we find our order dated 18/06/2021 suffering a mistake(s) apparent on record. As considering the case laws we conclude there was a mistake apparent on record in the order passed in [2021 (6) TMI 669 - ITAT HYDERABAD] and, therefore, the same are hereby recalled and disposed off. Issues Involved:1. Recall of Tribunal's Order dated 18/06/2021.2. Mistake Apparent from Record regarding the consideration of submitted documents.3. Eligibility for Deduction under Section 54F of the Income Tax Act for multiple residential units.Issue-wise Detailed Analysis:1. Recall of Tribunal's Order dated 18/06/2021:The assessees filed Miscellaneous Applications seeking the recall of the Tribunal's order dated 18/06/2021 in ITA Nos. 732, 889 & 890/Hyd/2019. They contended that a short note along with precedents from various High Courts, including the jurisdictional High Court, was submitted on 28/05/2021 but was not considered by the Tribunal. The assessees argued that this oversight constituted a mistake apparent from the record, as no opportunity was given to rebut the findings regarding the residential flats.2. Mistake Apparent from Record regarding the consideration of submitted documents:The Tribunal acknowledged that the note and case law submitted by the assessees on 28/05/2021 were not taken into consideration while passing the order dated 18/06/2021. Due to the COVID-19 pandemic, a drop box system was used for submitting physical documents, which were not placed before the Bench at the time of hearing. The Tribunal recognized this as a mistake apparent on the record, as the documents were relevant for deciding the issue against the department.3. Eligibility for Deduction under Section 54F of the Income Tax Act for multiple residential units:The Tribunal had originally remitted the issue to the AO, noting that the AO restricted the exemption under Section 54F to one residential flat, while the CIT(A) allowed the exemption for multiple residential flats. The Tribunal's order highlighted that prior to the amendment by the Finance Act, 2014, Section 54F did not restrict the investment to one residential house. The Tribunal directed the AO to verify the allotment of flats to the assessees, as the necessary documents were not submitted to ascertain the number of flats allotted. The Tribunal relied on various judgments, including those from the Delhi High Court and the AP and Karnataka High Courts, which supported the exemption for multiple units in a block/tower.Reconsideration and Final Decision:Upon reconsideration, the Tribunal found that the previous order dated 18/06/2021 suffered from mistakes apparent on the record due to the non-consideration of the submitted documents and relevant case laws. The Tribunal reviewed the judgments cited by the assessees and concluded that there was indeed an apparent mistake. Consequently, the Tribunal recalled and modified the order dated 18/06/2021, allowing the assessees' appeals and granting the deduction under Section 54F for more than one house, as per the cited judgments.Conclusion:The Tribunal allowed the Miscellaneous Applications No. 48, 49, & 50/Hyd/2021 and the corresponding appeals No. 732, 889 & 890/Hyd/2019, modifying the previous order and granting the assessees eligibility for deduction under Section 54F for multiple residential units. The decision was pronounced in the open court on 23rd November 2021.