Section 80IB(10) deduction for completed housing blocks allowed proportionately, while non-compliant blocks were excluded.

Delay in filing two appeals was condoned because resignation of the tax consultant and communication gaps were accepted as sufficient explanation on a liberal, merit-oriented approach. For deduction under section 80IB(10), a single approved housing project had to be shown as completed within time by the requisite completion or occupancy certificate from the local authority. The blocks for which completion or deemed compliance was established were held eligible, and proportionate deduction was allowed for those completed portions. Blocks A, D and E were disallowed because timely completion notice and certificate compliance were not shown.

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Issues: (i) Whether the delay in filing two of the appeals deserved condonation; (ii) whether deduction under section 80IB(10) was allowable for the housing project in respect of the completed blocks and on a proportionate basis, including the treatment of blocks A, D and E.

Issue (i): Whether the delay in filing two of the appeals deserved condonation.

Analysis: The reasons stated for delay were resignation of the tax consultant and communication gaps. The delay was tested on the touchstone of substantial justice, and the explanation was accepted as sufficient. The Tribunal preferred a liberal approach in the interests of adjudication on merits.

Conclusion: The delay was condoned in favour of the assessee.

Issue (ii): Whether deduction under section 80IB(10) was allowable for the housing project in respect of the completed blocks and on a proportionate basis, including the treatment of blocks A, D and E.

Analysis: The project was approved as a single housing project, and completion for section 80IB(10) was required to be evidenced by the completion or occupancy certificate issued by the local authority within the stipulated period. The completed blocks for which the requisite certificate or deemed compliance was established were treated as eligible, while blocks A, D and E were held to be ineligible because the completion notice and certificate process was not shown to have been completed within time. The Tribunal also accepted proportionate deduction for the eligible completed blocks and rejected the claim to the extent it related to the defaulting blocks.

Conclusion: Deduction under section 80IB(10) was allowed only for the eligible completed blocks and proportionately, while the claim for blocks A, D and E was disallowed.

Final Conclusion: The appeals succeeded only in part, with relief confined to the condoned appeals and to deduction granted for the eligible blocks, while the balance disallowance was sustained.

Ratio Decidendi: For deduction under section 80IB(10), completion of a housing project must be established by the statutory completion or occupancy certificate within time, and where a composite project contains both compliant and non-compliant blocks, relief may be restricted to the compliant portions on a proportionate basis.

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