If an Assessee is not able to utilize the entire amount of capital gains on or before the due date of filing of return for the year in respect of which such capital gains arose. In such a situation, sub-section (2) of section 54 by provided for the deposit of unutilized funds in a Capital Gains Account Scheme before the prescribed date so that an assessee may not lose upon the exemption of unutilized funds.
In Dr. Dharmista Mehta v. ITO [2023] 198 ITD 106 (Mum)(Trib.) held that assessee had failed to purchase house property before the due date of filing of return as per section 139(1), the assessee had purchased new property well before the deadline given in section 139(4) i.e. 30-4-2013 and therefore, disallowance of exemption under section 54 should be vacated. Tribunal held that exemption under section 54 should be allowed if amount is invested on or before due date of filing of return under section 139(4) of the Act .