Tribunal grants appeal, directs reassessment under Sec 80IB(10) with RTI evidence.

The Tribunal allowed the appeals for statistical purposes, directing the Assessing Officer to reconsider the denial of deduction under Section 80IB(10) in light of additional evidence obtained under the Right to Information Act, 2005. Emphasizing the completion of the project without complaints, the Tribunal highlighted bureaucratic obstacles in obtaining the completion certificate. It instructed the AO to issue a speaking order, considering the peculiar circumstances and relevant legal principles, while suggesting addressing procedural issues with State Authorities to avoid similar hardships for taxpayers.

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Issues Involved:
1. Non-issuance of completion certificate by local authority.
2. Rejection of deduction claim under Section 80IB(10) of the Income Tax Act, 1961.
3. Compliance with the Maharashtra Regional and Town Planning Act, 1966.
4. Admissibility of additional evidence obtained under the Right to Information Act, 2005.

Issue-wise Detailed Analysis:

1. Non-issuance of Completion Certificate by Local Authority:
The core issue revolves around the assessee’s inability to produce a completion certificate from the local authority for a housing project located outside the municipal limits of Pune. The Collector of Pune, being the sanctioning authority, did not have a system of issuing completion certificates under the Maharashtra Regional and Town Planning Act, 1966. The assessee argued that under the said Act, a completion certificate issued by a local architect should suffice. However, the Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)] insisted on a completion certificate from the local authority, which was not issued due to the absence of a formal system.

2. Rejection of Deduction Claim under Section 80IB(10):
The AO rejected the assessee’s claim for deduction under Section 80IB(10) on the grounds of non-issuance of a completion certificate by the local authority. Despite the project being completed by 31-03-2011 and certified by the project architect on 09-01-2009, the AO added back the claimed deduction amounting to Rs. 1,39,59,759/- to the returned income. The CIT(A) upheld this rejection, focusing on the statutory requirement for a completion certificate from the local authority.

3. Compliance with the Maharashtra Regional and Town Planning Act, 1966:
The assessee contended that the project was approved by the Collector, Pune, and completed within the stipulated time. The completion certificate from the architect was submitted to the relevant authorities, but no formal certificate was issued by the local authority due to the non-existence of such a procedure. The CIT(A) emphasized the necessity of a completion certificate from the local authority, relying on a previous Tribunal order in a similar case.

4. Admissibility of Additional Evidence Obtained under the Right to Information Act, 2005:
The assessee submitted additional evidence obtained under the Right to Information Act, 2005, which included replies from the Gram Panchayat, the Collector, and the Assistant Director of Town Planning, Pune. These documents indicated that the local authorities did not have a system for issuing completion certificates for projects outside municipal limits. The Tribunal admitted these additional evidences, considering them crucial for deciding the appeals and remanded the issue to the AO for reconsideration based on these facts.

Conclusion:
The Tribunal acknowledged the bureaucratic hurdles faced by the assessee in obtaining the completion certificate and noted that the project was completed in all respects, with no complaints from flat buyers or local authorities. The Tribunal directed the AO to reconsider the denial of deduction under Section 80IB(10) in light of the additional evidence and the principle of natural justice. The AO was instructed to pass a speaking order, considering the peculiar facts of the case and relevant judicial pronouncements. The appeals were allowed for statistical purposes, and the Tribunal suggested that the Principal CIT/AO address the procedural issues with the State Authorities to prevent future hardships for taxpayers.

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