TaxTMI 
TaxTMI 
2016 (2) TMI 600
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.... selection; (b) issuance of notice under section 143(2), on the basis of such selection; and (c) completion of assessment vide assessment order dated 30.12.2011 should have been allowed and consequently, the assessment order dated 28.12.2011 was liable to be declared as null and void. WITHOUT PREJUDICE TO THE AFORESAID 3. BECAUSE the "CIT(A)" has erred in law and on facts in upholding the disallowance of appellant's claim for exemption under section 80 1B(10) of the Act in relation to the "Residential Housing Project" known as "Fortuna Apartments", on the ground that the same was hit by clause (ii) of explanation thereunder, in as much as completion certificate has been issued by the Lucknow Development Authority on 21.10.2009 whereas the cutoff date for such completion was 31.3.2008. 4. BECAUSE 'essence' of the requirement in this respect is that the project [in relation to which exemption under section 80IB(10) is claimed] should be completed by the stipulated date (which in the instant case was 31.3.2008) and on a due consideration of the facts and circumstance of the case, particularly that; a) the residential ho....
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....ear 2006-07), a brief resume of which has been given in Annexure-I hereto. 9. BECAUSE in any case in the event of conflict in "judicial opinion", the view favorable to the assessee should have been followed and accordingly the "CIT(A)" should have followed the decision of the Hon'ble ITAT in the appellant's own case for the assessment year 2007-08 (as has been extensively referred to in Annexure-I hereto, supra), so as to allow the appellant's claim for exemption under section 80IB(10) of the Act. 10. BECAUSE the CIT(A) has erred in law and on facts in upholding the disallowance of appellant's claim for exemption under section 80IB(10) in relation to another project namely "Forttma Reviera Blues Housing Project" on the grounds that; a) built-up area of some of the flats (24 in number) constructed under the said project had exceeded the limit of 1500 sq. ft. as prescribed in section 80IB(10)(c) of the Act; b) the completion certificate was issued by the local authority i.e. Lucknow Development Authority on 26.09.2011, where as the stipulated period had expired on 31.3.2011; and c) the built-up area of the shops and other c....
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....ed with "final last opportunity" for 23.4.2015. Again the hearing was adjourned and the matter was listed for hearing on 25.6.20125 and again assessee sought adjournment and hearing was adjourned with "last opportunity" for 14.7.2015. Again on 14.7.2015, the assessee sought adjournment and the hearing was further adjourned with "last opportunity" for 17.7.2015. Again on 17.7.2015, the hearing was further adjourned at the request of the assessee with "final last opportunity" for 12.8.2015. Again on 12.8.2015, the hearing was further adjourned at the request of the assessee with "final last opportunity" for 18.8.2015. Similar is the position on 18.8.2015 and the hearing was adjourned with "final last opportunity" at the request of the assessee for 7.9.2015. Again on 7.9.2015, 14.9.2015 and 28.10.2015, the hearing was adjourned at the request of the assessee with "last opportunity". On 5.11.2015, the hearing was again adjourned with "final last opportunity" for 23.11.2015. It was also made clear on different dates that no further adjournment would be granted, but despite all these clear warning, the assessee did not make any effort to argue its case and all the time assessee sought ad....
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....argued on the point of excess area, with the submission that the area of 24 flats of the project exceeded 1500 sq. ft. as prescribed under section 80IB(10(c) of the Act. 8. The ld. D.R. has also placed reliance upon the judgment of the Hon'ble M.P. High court in the case of CIT vs. Global Reality, 379 ITR 107, in which it has been held that in the case of housing project approved by the Local Authority before April, 1, 2004, he must submit the completion certificate issued by the authority having issued before 31.3.2008. It was also held that in a case the housing project approved on or after April, 1, 2004, the assessee can avail the benefit provided completion certificate issued by the Local Authority is within four years from the end of the financial year, in which the concerned project was approved by the Local Authority. If the condition is not fulfilled, the assessee who maintains the work-in-progress accounting method and had claimed deduction under section 80-IB(10)(a) must suffer the consequence of disallowance or withdrawal of the benefit claimed by him on that count 9. Having carefully examined the written submission filed by the assessee and the case laws reli....
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.... the Tribunal has given a specific finding that the LDA is a local authority for the purpose of granting approval and issuing completion certificate of residential housing project. During the course of hearing no dispute was raised by the ld. D.R. with regard to the findings of the Tribunal in earlier assessment years on these two aspects. Therefore, there is no controversy in this regard. 14. The main dispute was raised with regard to the date of completion of the housing project, though this issue was also raised in earlier years and the Tribunal has given a specific finding that the housing project was completed before 31.3.2008, but the ld. CIT (DR) has emphatically argued that this finding of the Tribunal in this regard is contrary to the facts available on record. During assessment year 2005-06, the impugned completion certificate as available at page 26 of the compilation of the assessee, was neither placed before the lower authorities nor before the Tribunal during the course of hearing of the appeal though the appeal was heard on 8.4.2010 and the said completion certificate was issued by the LDA to the assessee on 23.10.2009. The Tribunal has given a finding on th....
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....nt section and as per explanation (i) it is clarified that when approvals are more than one, then the first approval given by the local authority shall be deemed to be the date of approval. In the instant case, by considering the explanation (i) inserted in section 80IB(10) it can safely be held that the assessee got the approval of the local authority before 1st day of April 2004 even if the first approval obtained i.e. the approval dated 24/11/2001 is to be considered. Therefore, we are of the opinion that the assessee got the approval of the local authority before the cut off date as mentioned in sub clause (i) to clause (a) to sub section 10 of section 80IB of the Act. The another condition which is required to be fulfilled is provided in clause (b) of sub section 10 to section 80IB which relates to the area of land on which the project is constructed. The provisions contained therein specify the area which shall be minimum one acre. In the instant case, the assessee constructed the complete housing project known as "Fortuna Apartment Housing Project" on the total area of 4550.07 sq. mtr. The assessee was in possession of the said area and the mode of acquisition of land was as....
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....ssee's own case in the absence of completion certificate and has again given a finding that the project was completed before 31.3.2008. The relevant portion of the order of the tribunal is extracted hereunder:- "7.4 The learned CIT(A) has also drawn a parallel and proceeded to hold that this was a project undertaken by the assessee as project of works contract. Such a finding reached by learned CIT(A) is without any cogent reasons and the same is divorced from the approved scheme which was undertaken by the appellant in assessment year 2004-2005 by making his own investment and income declared on partial completion method from assessment year 2004-2005 till the year under consideration. The Assessing Officer himself has allowed the claim u/s 80 IB(10) of the Act in assessment year 2004-2005 in the summary assessment. Thereafter, the Appellate Tribunal in assessment year 2005-2006 found that the appellant had satisfied all the conditions as are laid u/s 80 IB (10) of the Act for claiming deduction under that section and thereafter by a detailed reasoning contained in the said order dated 08/04/2010 and also by recording a finding that the project stands completed prior to t....
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.... issued by the local authority i.e. LDA. The ld. CIT(A) has also given a finding that the completion certificate was sought the assessee in the name of Shri Karuna Shanker Dubey, who was expired long back and the certificate was also issued in his name. Therefore, the certificate has no evidential value and cannot be relied upon for the purpose of determining the date of completion of the housing project. In the light of these facts, the issue with regard to the date of completion of the housing project requires a fresh adjudication by the Tribunal without being influenced by the earlier orders of the Tribunal, as those orders can be called to be an order per incuriam. 17. We have also examined various judgments referred to by the assessee on the point of rule of consistency and we find that in all those judgments it has been repeatedly held that the principle of res judicata are not applicable in the Income-tax proceedings and every assessment year is independent assessment year, but the rule of consistency should be followed, if a particular view is taken by the Tribunal in a particular year with respect to certain facts, the same view should be followed in succeeding ye....
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....authority.] Explanation.-For the purposes of this clause,- (i) in a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority; (ii) the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority;" 19. For claiming deduction under section 80IB(10) of the Act, the assessee is required to fulfill basic requisite conditions that the housing project should have been approved before 1st April 2004 and should have been completed before 31.3.2008. If any of the condition is not fulfilled, the assessee would not be entitled for deduction under section 80IB(10) of the Act. With respect to the approval of the housing project, there is no dispute and admittedly it was granted before 1st April, 2004 by the local authority, but with regard to the date of completion of the project, as per provisions of section 80IB(10) of the Act and its Expla....
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....truction of housing project shall be taken to be date on which completion certificate in respect of such housing project is issued by the local authority. Therefore, there is no iota of doubt in the interpretation of Explanation below section 80IB(10) of the Act and according to the said Explanation, the date of completion of the project in the instant case shall be taken to be the date of issuance of completion certificate by the local authority i.e. 23.10.2009. Since the housing project was completed after 31.3.2008, the assessee has not fulfilled the second requisite condition for claiming deduction under section 80IB(10) of the Act and therefore the assessee is not entitled for deduction under section 80IB(10) of the Act." 10. We have also examined the provisions of section 15 and 15-A of the U.P. Urban Planning and Development Act, 1976 and we find that for obtaining a completion certificate, every person or body having been granted permission under sub section (3) of section 15 shall complete the developments according to the approved plan and send a notice in writing of such completion to the authority and obtain completion certificate from the authority in the manner pre....
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....cally held that if the housing project was approved by the local authority before 1.4.2004, he must submit the completion certificate issued by the authority, having issued before 31.3.2008. The relevant observations of the Hon'ble High Court are extracted hereunder for the sake of reference:- "According to the unamended clause (a) of section 80-IB(10) of the Income-tax Act, 1961, as was in force prior to April 1,2005, the assessee was entitled to deduction of profits in the case of housing projects approved before March 31,2005, by the local authority. The only condition in clause (a), at the relevant time, was that the development and construction of the housing project had commenced or commences on or after October 1,1998. This stipulation has been modified by amendment to clause (a). According to the amended clause (a), the housing project approved before March 31, 2007 by a local authority would receive the benefit of deduction provided the development and construction of the housing project has commenced or commences on or after October 1, 1998, and is completed within a specified time. Housing projects approved by the local authority before April 1,2004 must be ....
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....ority before the cut-off date. That is to lend credence to the factum of completion of the entire housing project in all respects according to the approval granted by the local authority. The Legislature was conscious of this position, for which, express provision has been made as to the meaning of the date of completion of the housing project linked to the "date on which" completion certificate "is issued" by the "local authority", as predicated in Explanation (ii) thereunder. The Supreme Court decisions in the case of Veena Developers and Sarkar Builders will have to be understood only in the context of a new condition stipulated regarding the built-up area of the project by way of amendment, which the assessee could not have complied with at all, and even though the construction of the housing project was otherwise in full compliance with all conditions set out in the approval given by the municipal authority as per the relevant rules in that behalf. The Assessing Officer disallowed the claim of the assessee under section 80-IB(10) on the finding that in spite of repeated opportunity given to the assessee during the course of assessment proceedings, the complet....
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....per the applicable Rules and Regulations. The provision for claiming tax deduction from profits, can certainly prescribe reasonable conditions and more so a time frame for completion of the project, in the larger public interest. No comparison can be drawn between the new condition prescribed in terms of clause (d) and that of clause (a). The condition in clause (a), neither operates retrospectively nor can be said to be absurd, unjust or expecting the assessee to comply with something which is impossibly to achieve. (ii) That considering the prodigious benefit offered in terms of section 80-IB to, the assessee (hundred per cent, of the profits derived in any previous year relevant to>any assessment year) and the purpose underlying it-which is, inter aim, a burden on the public exchequer due to waiver of commensurate revenue-the stipulation fop obtaining completion certificate from the local authority before the cut-off date:, must be construed as mandatory. The fact that compliance with that condition is dependent on the manner in which the proposal is processed by the local authority, the provision cannot be construed as a directory requirement. It is a substantive provi....
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....hereof of denial of the benefit of tax deduction offered to him on that count. (iii) That issuance of completion certificate, after the cut-off date by the local authority but, mentioning the date of 'Completion of project before the cut-off date, does not fulfill the condition specified in clause (a) of section 80-IB(10) read with Explanation (ii) thereunder. Similarly, the requirement of securing the completion certificate issued by the local authority before the cutoff date is not directory, in view of 'the express provision in section 80-IB(10)(a) read with Explanation (ii) thereunder. The completion certificate granted by the local authority must bear the date of having been issued before the cut-off date. (iv) That the provision in the form of section 80-IB(10)(a), applies uniformly to all assessees whether following the work-in-progress. accounting method or otherwise. The benefit of deduction under this provision can be availed of by the assessee following the work-in-progress accounting method, provided he has complied with the stipulation of having produced the completion certificate issued by the local authority before the cut-off date, as may b....
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....pleted by 31.3.2011, but the completion certificate was issued by the LDA on 26.9.2011. Therefore, it was also issued after the prescribed period. 16. In the written submissions, the assessee has placed reliance upon a letter dated 29.3.2011 in which a request was made for issuance of completion certificate, but this letter is not supported by any Architect Certificate. Except this letter, no other evidence was filed to establish that the project was in fact completed before 31.3.2011. In the absence of any other specific evidence to establish that the project was completed before 31.3.2011, it is not possible for us to hold that the project was completed within the prescribed period, more so in the light of the fact that the completion certificate was issued on 26.9.2011 and also in the light of the judgment of the Hon'ble M.P. High court in the case of CIT vs. Global Reality (supra), according to which the date of issuance of completion certificate is the date of completion of the project. In the light of these facts, we are of the view that the assessee is not entitled for deduction under section 80IB(10) of the Act in respect of Fortuna Reviera Blues Housing Project also....
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....action ?" 5.1.1 In this case, it was held that issuance of notice u/s 143(2) is mandatory and omission on the part of the Assessing Authority to issue notice u/s 143(2) cannot be a procedural irregularity and the same is not curable. In the present case, it is not the case of the assessee that the notice u/s 143(2) was not issued and served on the assessee. This judgment is not rendering any help to the assessee. 5.2 The next judgment cited by Learned A.R. of the assessee is the judgment of Hon'ble Allahabad High Court rendered in the case of Sunderlal (Late) (supra). In this case, the dispute before Hon'ble Allahabad High Court was that as to whether CIT should give reasons for passing order of revision. In that case, the facts were that the CIT had authorized for filing of appeal against the order of AAC for assessment year 1960-61 and thereafter, he initiated revision proceedings u/s 33B of Indian Income Tax Act, 1922 relying solely on the order of AAC. It was held in that case that having authorized to file the appeal against the order of AAC for the same assessment year, it cannot be accepted that the CIT was having reasons that the order of the Asses....
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....l or quasi-judicial functions of the Income Tax Officer. In the present case, it is not the case of the assessee that the Assessing Officer has acted in accordance with any such specific direction of the superior officer that the case of the assessee must be elected for scrutiny and therefore, this judgment is also not applicable in the present case. 5.5 The next judgment cited by Learned A.R. of the assessee is the judgment of Hon'ble Bombay High Court rendered in the case of Gordhandas Desai (supra). In this case, it was held that the Assessing Officer should pass order for rectification ignoring the decision of the Commissioner and the further letters of the CBDT and the Govt. of India which must not influence his determination. There is no quarrel on this aspect but in the present case, there is no such dispute that the decision of the Assessing Officer is on the direction of any other authority. This judgment is also not rendering any help to the assessee in the present case. 5.6 The next judgment cited by Learned A.R. of the assessee is the judgment of Hon'ble Gujarat High Court rendered in the case of Gujarat Gas Co. Ltd. (supra). In this case, it w....
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....n, we have seen that none of the judgments is rendering any help to the assessee. We have also seen that the case was selected for scrutiny by Assessing Officer although he had taken help of computer and it cannot be said that the action of the Assessing Officer is not valid. 6.1 Now we examine the issue from a different angle. This has to be admitted that the entire juris prudence in respect of tax administration such as principle of natural justice etc. are with the sole object of ensuring that the tax payer is not unduly harassed by the tax department having almighty power of state. In order to make tax administration and collection friendly to tax payer, some steps have been taken by the tax administration/Government although much work is still to be done in this regard. Some of these steps are that it is made a rule that tax returns can be filed in a paper less manner in order to improve voluntary compliance by the tax payer and also to reduce the burden of filing voluminous documents along with the tax return. This is a big relief to the tax payer but this has to be ensured that there are some deterring measures so that no undue advantage is taken by any tax payer of....