2017 (8) TMI 1249

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....e and brevity. 2. One common issue in both the appeals is with regard to the validity of the proceedings initiated by the Assessing Officer by issuing notice under section 148 of the Income Tax Act, 1961 ( in short "the Act"). In order to appreciate the controversy we may refer to the appeal of the assessee for assessment year 2005-06, which is directed against an order passed by CIT(A)-34, Mumbai dated 30/04/2012, which in turn, arises out of an order passed by the Assessing Officer under section 143(3) r.w.s.147 of the Act dated 07/12/2010. 3. In brief, the relevant facts are that the assessee is a partnership firm engaged in the business of Builders & Developers and for the assessment year 2005-06 it filed a return of income origin....

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.... aspect, assessee is in appeal before us. 4. Before us, assessee has assailed the initiation of proceedings under section 147/148 of the Act by pointing out the infirmities in the reasons recorded by the Assessing Officer. In this context, our attention has been invited to the reasons recorded by the Assessing Officer on 19/05/2009, prior to issuance of notice under section 148 of the Act, which reads as under:- "Reasons for issue of Notice u/s. 148 of the I.T.Act. 19.5.2009 Perusal of the record show that assessee has claimed deduction u/s.80IB(10) to the tune of Rs. 47,26,054/- for A.Y.2005-06. The said deduction has been claimed in respect of project located at Village Achole,Tal Vasai, Dist.Thane (Shivam Na....

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.... for commencement of project as on 05/05/1999 in form 10CCB". The reasons recorded also reveal that as per the Assessing Officer the error was known to the assessee since the development permission was given by CIDCO on 04/06/1998, which is "well before 01/10/1998". For the said reason, the Assessing Officer formed a belief that the claim of deduction under section 80 IB(10) of the Act has been wrongly allowed in the original assessment. Ostensibly the belief of the Assessing Officer is founded on the fact that the date of commencement of project canvassed by the assessee as 05/05/1999 is wrong because the development permission was given by CIDCO on 04/06/1998, which is pre- 01/10/1998. 6. Before we proceed to test the efficacy of the r....

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....he project, which has been taken at the time of original assessment as 05/05/1999. Even if the date of approval is before 01/10/1998, it does not disentitle the assessee because the requirement of the section is that the eligible housing project has to be approved before 31/03/2007. The significance of 01/10/1998 is to examine the date of commencement of development and construction of the housing project, and in the present case it has been canvassed at 05/05/1999. The reasons recorded reflect that the Assessing Officer has confused the date of approval by the local authority with the date of commencement of development and construction of the housing project which are two different aspects. In any case, merely because the permission was g....