Section 54 exemption for more than one residential house applied prospectively, so earlier-year relief was not denied.

For assessment year 2013-14, section 54 was applied in its unamended form, and the phrase "a residential house" was treated as not restricting exemption to only one residential property. The amendment effective from 1 April 2015 was considered prospective, so it could not be applied to deny relief for an earlier year. On the procedural point, delay in filing the appeal was explained by advanced age, health difficulties, and lack of immediate legal assistance, and the explanation was not controverted. The delay was therefore condoned, and the disallowance relating to the second residential house was deleted.

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Issues: (i) Whether the delay in filing the appeal deserved condonation on the basis of the explanation furnished by the appellant; (ii) Whether exemption under section 54 of the Income-tax Act, 1961 was available for investment in more than one residential house in the relevant assessment year, and whether the amendment effective from 1 April 2015 applied retrospectively.

Issue (i): Whether the delay in filing the appeal deserved condonation on the basis of the explanation furnished by the appellant.

Analysis: The delay was explained on the ground of advanced age, health difficulties, and absence of immediate legal assistance. The revenue did not controvert the explanation by any rejoinder or reply.

Conclusion: The delay was condoned and the appeal was heard on merits.

Issue (ii): Whether exemption under section 54 of the Income-tax Act, 1961 was available for investment in more than one residential house in the relevant assessment year, and whether the amendment effective from 1 April 2015 applied retrospectively.

Analysis: For assessment year 2013-14, the unamended provision applied. The expression "a residential house" in the pre-amended law was treated as permitting investment in more than one residential house, and the amendment substituting the expression from 1 April 2015 could not be applied to an earlier year. The disallowance relating to the second residential property was therefore not sustainable.

Conclusion: The exemption claim for the second residential house was allowed and the disallowance was deleted.

Final Conclusion: The assessee succeeded in full: the delay stood condoned and the disallowance relating to the second residential house was set aside, resulting in allowance of the appeal.

Ratio Decidendi: In the absence of retrospective language, the amendment to section 54 applies prospectively, and for the pre-amendment period the expression "a residential house" does not restrict exemption to only one residential house.

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