2026 (6) TMI 296

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....n of income on 29/02/2016. The assessee had declared the capital gains and income from other sources. The case was selected for limited scrutiny through CASS and notice u/s. 143(2) was issued. Thereafter notice u/s. 142(1) was issued. The assessee also furnished the details called for by the AO. During the course of assessment proceedings, the AO found that the assessee had claimed exemption u/s. 54 of the Act on the gains earned Rs. 2,16,20,000/-. The assessee claimed that a sum of Rs. 1,21,92,630/- was spent before filing the return of income. The balance amount of Rs. 95,00,370/- was not kept in the capital gain account before the due date for filing the return of income. The AO relied on section 54(2) of the Act had disallowed the capit....

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.... 9. Before adverting this issue, it is useful to refer some of the facts which are relevant to decide the issue. 10. The assessee sold a house property on 06/03/2015 for a consideration of Rs. 2,98,76,835/-. She arrived the net capital gains at Rs. 2,33,03,182/-. The assessee invested a part gain of Rs. 1,21,92,630/- by the end of August 2015 and also invested the balance gain on or before the filing of return u/s. 139(4) of the Act i.e. 29/02/2016. The AO had accepted the investments made upto the due date for filing return of income u/s. 139(1) but disallowed the investment made before the filing of return u/s. 139(4) of the Act. 11. As seen from the said facts, the assessee filed her return of income u/s. 139(4) on 29/02/2016 wi....

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....rt in the case of Fathima Bai vs. ITO reported in (2009) 32 DTR 243 (Kar) wherein it was held as follows: "In the instant case, the due date for filing of return is 30.7.88. U/S 139(4) the assessee was entitled to file returns in the extended time, which is within 31.3.1990. The extended due date u/s 139(4) would be 31.3.1990. The assessee did not file the returns within the extended due date, but filed the returns on 27.2.2000. However, the assessee had utilised the entire capital gains by purchase of a house property within the stipulated periods of Sec. 54(2) ie., before the extended due date for returns U/s 139. The assessee technically may have defaulted in not filing the returns u/s 139(4). But, however, utilised the....