Housing project deduction survives delayed building use permission and return filing within extended transfer pricing deadline

Deduction under section 80IB(10) was upheld where the housing project was completed within the prescribed period and the assessee had applied in time for Building Use permission; delayed issuance of permission for some units, caused by factors beyond the assessee's control, was not treated as fatal. Deduction was also protected where the return was filed within the extended due date applicable because a transfer pricing report in Form 3CEB was required under section 92E, so it could not be characterised as belated under section 139(1) for denial of relief. The revenue's challenge failed on both grounds.

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Issues: (i) Whether deduction under section 80IB(10) of the Income-tax Act, 1961 could be denied merely because Building Use permission for all units was not received by the stipulated date, despite completion of the housing project and timely application for permission. (ii) Whether the return filed beyond the ordinary time limit under section 139(1) disentitled the assessee from the deduction when the extended due date applied because a transfer pricing report was required under section 92E.

Issue (i): Whether deduction under section 80IB(10) of the Income-tax Act, 1961 could be denied merely because Building Use permission for all units was not received by the stipulated date, despite completion of the housing project and timely application for permission.

Analysis: The finding accepted by the appellate authorities was that the entire project had been completed before the prescribed date and that application for Building Use permission had been made within time. The delay in issuance of permission for some units arose from circumstances beyond the assessee's control, and the project completion was otherwise supported by documentary material. On that basis, the statutory condition was treated as satisfied, and the absence of final permission before the cut-off date was held not fatal.

Conclusion: The deduction under section 80IB(10) could not be denied on this ground, and the issue was decided in favour of the assessee.

Issue (ii): Whether the return filed beyond the ordinary time limit under section 139(1) disentitled the assessee from the deduction when the extended due date applied because a transfer pricing report was required under section 92E.

Analysis: The relevant finding was that, because the assessee was required to obtain and furnish a transfer pricing report in Form 3CEB under section 92E, the assessee was entitled to the extended due date for filing the return. Once the extended period applied, the filing could not be treated as belated for the purpose of denying the deduction.

Conclusion: The return was within the extended due date, so the deduction could not be denied on the ground of delay, and the issue was decided in favour of the assessee.

Final Conclusion: The revenue's challenge failed, and the allowance of the deduction was sustained on both grounds.

Ratio Decidendi: For deduction under section 80IB(10), timely application for Building Use permission and completion of the project within the prescribed period are sufficient where the permission is delayed for reasons beyond the assessee's control, and a return filed within the extended due date under section 92E cannot be treated as time-barred under section 139(1) for denial of the deduction.

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