Section 54F exemption requires factual verification before allowance; remand ordered for fresh appellate adjudication.
Exemption under section 54F cannot be finally granted without verification of the statutory factual conditions, including whether the taxpayer owned more than one residential house on the transfer date. As the first appellate authority allowed the claim without adequate inquiry, remand report, or response to objections in the assessment order, the matter required fresh adjudication on proper evidence and after hearing both sides. The related cross-objection was also sent back because the Revenue's challenge was being restored and the connected grounds had not been adjudicated earlier. The controversy was therefore returned for reconsideration on merits, with the appeal and cross-objection treated as allowed for statistical purposes.
Issues: (i) Whether the assessee's claim for exemption under section 54F could be sustained without verification of the basic factual requirements, and whether the matter required fresh adjudication by the first appellate authority.
Analysis: The assessee had not filed a return and the record did not establish whether he owned more than one residential house on the date of transfer, which is a material condition for relief under section 54F. The first appellate authority allowed the claim without undertaking the necessary factual inquiry, without calling for a remand report, and without addressing the objections raised in the assessment order. In these circumstances, the issue could not be finally decided on the existing material and required reconsideration after proper verification and opportunity to both sides.
Conclusion: The issue of exemption under section 54F was sent back to the first appellate authority for fresh decision in accordance with law.
Issues: (ii) Whether the assessee's cross-objection and the Revenue's challenge required restoration to the first appellate authority for adjudication.
Analysis: Since the Revenue's appeal was being restored for fresh consideration, and the grounds raised in the cross-objection had not been adjudicated by the first appellate authority, those grounds also required reconsideration by that authority. The same appellate exercise was therefore extended to the cross-objection so that all related issues could be decided together on facts and law.
Conclusion: The cross-objection grounds were also restored to the first appellate authority for adjudication.
Final Conclusion: The controversy was not finally determined on merits and was returned for fresh appellate adjudication, with both the Revenue's appeal and the assessee's cross-objection treated as allowed for statistical purposes.
Ratio Decidendi: A claim for exemption depending on fulfillment of factual statutory conditions cannot be finally allowed without proper verification, and where such verification is absent, the matter may be remanded for fresh adjudication.
TaxTMI 
AI Drafter ✕
TaxTMI 
