214-Day Delay Condoned; Exemption Granted Under Section 54EC; Section 50 Inapplicable; Rectification Allowed Under Section 154

The Tribunal allowed the appeals, condoning the 214-day delay in filing, and granted the exemption under section 54EC of the Income Tax Act, 1961. It determined that section 50 did not apply as the building was not part of a block of assets with claimed depreciation, classifying it as a long-term capital asset. Consequently, the assessee was eligible for the exemption. Additionally, the Tribunal set aside the CIT(A)'s order denying rectification under section 154, finding merit in the assessee's argument.

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Issues Involved:
1. Delay in filing the appeal.
2. Denial of exemption under section 54EC of the Income Tax Act, 1961.
3. Application of section 50 of the Income Tax Act, 1961.
4. Rectification of the order under section 154 of the Income Tax Act, 1961.

Detailed Analysis:

1. Delay in Filing the Appeal:
The assessee's appeal against the CIT(A)'s order was delayed by 214 days. The assessee contended that she had a bona fide belief that relief would be granted in the rectification proceedings under section 154, which was denied despite the jurisdictional High Court's judgment in CIT vs. Ace Builders (P) Ltd. The Tribunal condoned the delay, citing the Supreme Court's judgment in Collector, Land Acquisition vs. MST. Katiji & Ors., which allows for condonation if there is sufficient cause for the delay.

2. Denial of Exemption under Section 54EC:
The assessee, a doctor, sold her business premises and claimed exemption under section 54EC. The AO denied the exemption, treating the capital gain as short-term under section 50, arguing that the building fell within the "block of assets" and depreciation was deemed to be allowed under Explanation 5 to section 32. The CIT(A) upheld this view, stating that the building used for the profession was subject to depreciation and thus fell under section 50.

3. Application of Section 50:
The Tribunal examined whether section 50 applied to the building transferred by the assessee. Section 50 applies to assets forming part of a block of assets on which depreciation has been allowed. The Tribunal noted that for section 50 to apply, both conditions must be met: the asset must be part of a block of assets, and depreciation must have been allowed. Since the assessee had not claimed depreciation on the building in previous years, the Tribunal concluded that section 50 did not apply. Consequently, the building was considered a long-term capital asset, making the assessee eligible for exemption under section 54EC.

4. Rectification of the Order under Section 154:
The Tribunal addressed the assessee's appeal against the CIT(A)'s rejection of her rectification request under section 154. Given the Tribunal's decision on the main appeal, it found merit in the assessee's contention for rectification. The Tribunal set aside the impugned orders and accepted the assessee's claim.

Conclusion:
The Tribunal allowed both appeals, condoning the delay in filing the appeal and granting the exemption under section 54EC. It also set aside the CIT(A)'s order rejecting the rectification request under section 154. The Tribunal's decision was based on the interpretation that section 50 did not apply since depreciation had not been claimed on the building, thus qualifying it as a long-term capital asset eligible for exemption under section 54EC.

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