TaxTMI 
TaxTMI 
2016 (4) TMI 121
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....y levied of Rs. 1,23,986/- u/s 271(1)(c) by the Assessing Officer and confirmed by the 1st appellate authority the case of the appellant is not covered by provisions of sec. 271(1)(c) r.w. explanation-1 of the Act. It further be held that penalty imposed by the AO and confirmed by the 1st appellate authority for alleged furnishing of inaccurate particulars of income is unwarranted, unjustified & contrary to the provisions of Scheme of the Act. The penalty imposed by the AO be deleted. The appellant be granted just and proper relief in this respect. 2. The appellant prays to be allowed to add, amend, modify, rectify, delete, raise any grounds of appeal at the time of hearing. 4. Briefly, in the facts of the present case, the assessee company was a builder and promoter. During the year under consideration, the assessee had shown profits to the tune of Rs. 3,91,172/- after claiming deduction under section 80IB(10) of the Act. The assessee had undertaken the project named Sankalp Nagari at S.No.82/272, Dhanori. The original return of income filed by the assessee was processed under section 143(1) of the Act. Survey under section 133A of the Act was conducted on 27.07.2008 a....
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....within the meaning of section 271(1)(c) of the Act. The Assessing Officer levied penalty of Rs. 1,23,986/- under section 271(1)(c) of the Act. 5. Before the CIT(A), the plea of the assessee was that it had obtained NOC from various departments like drainage NOC, Road NOC, fire NOC, etc. and the Architect had also issued the completion certificate and application was moved before the Pune Municipal Corporation (PMC) for issue of Completion Certificate on 29.03.2008. However, the PMC had not issued Completion Certificate to the assessee and that was only the reason for disallowance of deduction claimed under section 80IB(10) of the Act. It was the case of assessee before the CIT(A) that the assessee had filed all the required documents to claim the deduction under section 80IB(10) of the Act i.e. commencement certificate, approved layout plan, various NOCs, completion certificate issued by the Architect and filed application with PMC for issue of Completion Certificate, Form No.10CCB of the auditor and all the facts were disclosed by the assessee before the Assessing Officer. The assessee further claimed that it was of the bonafide view that it was entitled to the said claim of de....
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....vailing the deduction. However, when the assessee failed to furnish completion certificate for the project before the Assessing Officer, merely because the assessee had filed an application for obtaining completion certificate from the local authority on 29.03.2008, but where the local authority had not issued the certificate till date of the assessment order, it was a fit case for levy of penalty under section 271(1)(c) of the Act, where the assessee had furnished inaccurate particulars of income. The CIT(A) also observed that this was not a case where the delay in obtaining the completion certificate was due to reasons beyond the control of the assessee and in view thereof, the CIT(A) held that the case of the assessee was clearly covered under the main provisions of section 271(1)(c) of the Act. The CIT(A) further observed that where the assessee makes claim, which was not only incorrect in law but was also without any basis and where the explanation furnished by him for making such claim was not found to be bonafide, in view of the ratio laid down by the Hon'ble Delhi High Court in CIT Vs. Zoom Communication (Pvt.) Ltd. reported in 327 ITR 510 (Del), the Explanation (1) to sect....
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....essment year 2004-05, however, had confirmed levy of penalty for other three respective years. Reference was made to various decisions of the Hon'ble High Courts and Pune Bench of Tribunal for the proposition that for such in-completed projects, the assessee was entitled to the claim of deduction under section 80IB(10) of the Act and if such deduction had been allowed to the assessee, no penalty for same could be levied upon the assessee. Further, the learned Authorized Representative for the assessee pointed out that even in the circumstances where the claim of deduction under section 80IB(10) of the Act has been denied to the assessee, there is no merit in levy of penalty as held by Pune Bench of Tribunal in ACIT Vs. M/s. Rohan Engineering Construction in ITA No.867/PN/2011, relating to assessment year 2006 -07 order dated 19.10.2012. 9. The learned Departmental Representative for the Revenue pointed out that under the Income-tax Act, deduction is allowable if the assessee fulfils the conditions laid down in the Act. However, pursuant to Survey under section 133A of the Act conducted at the premises of the assessee, it came to light that till 22.07.2008, there was no completio....
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....e of completion certificate by the PMC on 29.03.2008. Before obtaining the completion certificate from the PMC, the requirement was to obtain No Objection Certificates from various departments, which were duly complied with by the assessee and also completion certificate was issued by the Architect certifying that the construction of building was completed. There are two aspects to the issue i.e. while filing the return of income for assessment years 2005-06 to 2007-08, the assessee could not presume or come to a finding as to whether it would complete the project by 31.03.2008 or not. The assessee has sure that it would comply with all the conditions and as per the requirement of Act, it had claimed deduction under section 80IB(10) of the Act. For following the percentage completion method i.e. on the fully constructed area flats, the assessee was claiming the aforesaid deduction from year to year. When the assessee originally made the claim for deduction under section 80IB(10) of the Act, the assessee was held to have fulfilled all the conditions and the return of income filed by the assessee was processed under section 143(1) of the Act and the claim of the assessee was allowed.....