Appeal allowed for new property, denied for fixed deposits.

The Tribunal partly allowed the appeal by condoning the delay in filing the appeal due to the assessee's ill-health, granting exemption under Section 54 for the new residential property with multiple units, but upholding the denial of exemption under Section 54EC for fixed deposits. The decision was pronounced in Chennai on 28th February 2023.

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Issues Involved:
1. Condonation of delay in filing the appeal.
2. Eligibility for exemption under Section 54 of the Income Tax Act.
3. Eligibility for exemption under Section 54EC of the Income Tax Act.

Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The appeal was filed with a delay of 832 days. The assessee, a senior citizen aged 71, cited medical reasons including Coronary Artery Disease, Diabetes, Hypertension, and a Coronary Artery Bypass Graft Surgery for the delay. The Tribunal noted that 715 days of the delay fell within the Covid period, which was exempted from condonation by the Supreme Court. The remaining 117 days were attributed to the assessee's ill-health, supported by medical records. The Tribunal referenced the Supreme Court decision in N. Balakrishnan vs M. Krishna Murthy, which allows for condonation of delay in the absence of mala-fide intentions. Consequently, the delay was condoned, and the appeal was admitted for adjudication.

2. Eligibility for Exemption under Section 54:
The assessee's property was acquired by Chennai Metro Rail Ltd, resulting in long-term capital gains. The assessee claimed exemption under Section 54 for purchasing another residential property and constructing additional units within the stipulated period. The Assessing Officer (AO) denied the exemption, stating that the new property consisted of multiple units and thus did not qualify as a single residential house. The CIT(A) upheld the AO's decision, noting that the property had multiple kitchens and units, and also rejected the exemption for a second property purchased at Aminjikarai, Chennai.

The Tribunal, however, referred to judicial precedents, including the Supreme Court's decision in CIT vs Gita Duggal and the Karnataka High Court's decision in Arun K. Thiagarajan vs CIT, which interpreted "a residential house" to include multiple units within a single property. The Tribunal concluded that the assessee was entitled to exemption under Section 54, as the property purchased on 30.08.2012 was within two years of the transfer and constituted a single residential house with multiple units. The Tribunal directed the AO to allow the exemption of Rs. 1,27,03,112 under Section 54.

3. Eligibility for Exemption under Section 54EC:
The assessee claimed exemption under Section 54EC for Rs. 50 lakhs invested in fixed deposits with nationalized banks. The AO and CIT(A) denied the exemption, stating that the investment was not in eligible bonds as required under Section 54EC. The Tribunal upheld this decision, noting that fixed deposits do not qualify for exemption under Section 54EC, which specifically requires investment in eligible bonds.

Conclusion:
The appeal was partly allowed. The Tribunal condoned the delay in filing the appeal, granted exemption under Section 54 for the new residential property, but upheld the denial of exemption under Section 54EC for the fixed deposits. The order was pronounced on 28th February, 2023, at Chennai.

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