Exemption u/s 54EC allowed as delay in investment was due to father in ICU 

Exemption u/s 54EC allowed as delay in investment in REC Bonds was due to father of the assessee in ICU 

In a recent judgment, ITAT as allowed the benefits of investment made in REC Bonds u/s 54EC where delay was caused due to father of assessee was in Intensive Care Unit (ICU)

ABCAUS Case Law Citation:
ABCAUS 3866 (2024) (02) ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A) of NFAC in disallowing the capital gain exemption u/s 54EC on the ground of delay of 19 days in investment of sale proceeds in REC Bonds.

The assessee has sold a property and to save capital gain tax, purchased residential house and also invested in REC Bonds which was 19 days after the prescribed date.

The Assessing Officer (AO), NFAC disallowed the claim of exemption u/s 54EC for the delay of 19 days in making the investment in REC Bonds and made an addition to income.

On first appeal, the CIT (A) confirmed the addition made on the ground that there is no provision in the income tax act which empowers the AO or the CIT(A) to condone the delay of investment in specified assets for availing the benefits of deduction u/s 54EC of the Act.

Aggrieved by the order of the CIT(A), the assessee was before the ITAT.

The Tribunal observed that the CIT(A) had disallowed deduction from LTCG holding that the investment in REC Bonds was delayed by 19 days post prescribed period.

The assessee submitted that, during the relevant Assessment Year, the father of the assessee was in Intensive Care Unit (ICU) for a month and ultimately died in January which

laid to the trauma in the family and assessee had to move from city to city.

The Tribunal opined that the reasons given by the assessee are acceptable and it does not defeat the legislative intention.

Accordingly, the Tribunal directed that the assessee be given the benefits of investment made in REC Bonds u/s. 54 EC of the Income Tax Act 1961

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