Tax Tribunal Upholds Deduction under Section 80IB(10)

The Tribunal dismissed the Revenue's appeals, confirming the Commissioner of Income Tax (Appeals) order allowing the deduction under section 80IB(10) to the assessee. The decision was based on substantial compliance principles, considering the eventual approval granted to the assessee without objections, following the Gujarat High Court's precedent.

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Issues:
- Appeal against separate orders of Commissioner of Income Tax (Appeals) for assessment years 2009-10 and 2010-11.
- Disallowance of deduction under section 80IB(10) to the assessee.
- Whether completion certificate issued after the stipulated time affects the deduction under section 80IB(10).
- Interpretation of the conditions for claiming deduction under section 80IB(10).

Analysis:

Issue 1: Appeal against Commissioner of Income Tax (Appeals) orders
The Revenue filed appeals against the separate orders of the Commissioner of Income Tax (Appeals) for the assessment years 2009-10 and 2010-11. The appeals were heard together as the issues involved were the same, and a common order was passed for convenience.

Issue 2: Disallowance of deduction under section 80IB(10)
The assessee, a builder, claimed a deduction under section 80IB of the Income Tax Act. The Assessing Officer disallowed the deduction as the completion certificate did not specify the date of completion, making it unverifiable. The Assessing Officer contended that the project should have been completed within a specified time frame. The Commissioner of Income Tax (Appeals) allowed the appeal of the assessee based on various judgments, including Sanghvi & Doshi Enterprises Vs. ITO & Ors. The Revenue challenged this decision.

Issue 3: Impact of completion certificate issuance date on deduction
The Revenue argued that since the completion certificate was issued after the stipulated time frame, the condition for claiming deduction under section 80IB(10) was not met. They contended that the completion of construction should have been within five years of the project approval date. The assessee emphasized that the delay in receiving the certificate was not within their control and relied on legal precedents to support their case.

Issue 4: Interpretation of conditions for deduction under section 80IB(10)
The Tribunal referred to the judgment of the Gujarat High Court in CIT Vs. Tarnetar Corporation, where it was held that minor deviations in compliance with statutory conditions may not invalidate the deduction if substantial compliance is evident. In the present case, since the approval was eventually granted without objections, the Tribunal upheld the decision of the Commissioner of Income Tax (Appeals) based on the principle of substantial compliance.

In conclusion, the Tribunal dismissed the Revenue's appeals, confirming the order of the Commissioner of Income Tax (Appeals) in allowing the deduction under section 80IB(10) to the assessee. The decision was based on the principle of substantial compliance and the circumstances of the case where the approval was eventually granted to the assessee without objections.

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