TaxTMI 
TaxTMI 
2021 (5) TMI 445
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....erred in setting aside the assessment with the direction to frame the assessment after inquiring into claim of deduction u/s 80IB(10). 3. Even otherwise, order passed by PCIT directing the assessing officer to inquire into the claim of deduction u/s 80IB(10) to the tune of Rs. 2,80,64,646/- is not justified in law, because the order sought to be revised was subject matter of appeal before CIT(A) in the appeals filed against the orders passed u/s. 143(3) and 143(3) r.w.s. 147. 4. Even otherwise, ld. CIT(A) has passed the order u/s 263 after the limitation period as he revised the original assessment made on 26.03.2013 and not the reassessment made u/s 147 on 22.09.2017. This is because the subject matter of revision u/s 263 of the I.T. Act, 1961 was un-connected with the issues which were subject matter of the issuance of notice u/s 148. 5. It is therefore prayed that above order passed by Pr. CIT u/s. 263 may please be quashed or modified as your honors deem it proper. 6. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal." 2. Succinct facts are that the assessee has filed its return of income for Assessment....
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.... building housing project. It is seen that the housing project in respect of which you have claimed deduction u/s 80IB(10) was approved on 03.02.2009 whereas section 80IB(10) allows deduction of profits from such housing project which has to be approved before the 31st day of March 2008 by a local authority; Therefore, the claim of deduction u/s 80IB(10) allowed is irregular and not disallowing the same has rendered the assessment so completed as erroneous in so far it is prejudicial to the interest of Revenue. 4. The undersigned, therefore, proposes to pass an order u/s 263 of the Act against the assessment order passed u/s 143(3) r.w.s. 147 dated 22.09.2017 by the Assessing Officer for the AY.2010-11 in so far as it is erroneous as well as prejudicial to the interest of revenue more particularly as per explanation 2(a) & 2(b) of section 263(1) of the I.T. Act. You are therefore requested to show cause as to why the order u/s.143(3) r.w.s 147 of the Act passed by AO vide order dated 22-09-2017 may not be revised u/s 263 of the Act. In this regard, you are hereby given an opportunity of being heard on 11-03-2020 at 11.30 a.m. at the above mentioned office of the undersigned. You ....
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....lkanth Heights and he will not claim the deduction of the same u/s. 80IB(10). So the survey action was in the nature of inquiry made by the assessing officer and in the course of survey proceedings, assessee produced the books of accounts and also the materials in support of the deduction u/s. 80IB(10). Looking to the materials on record including survey materials it is clear that there is unanimity for claim of deduction u/s. 80IB(10)except in regard to the amount of Rs. 1.25 crores disclosed at the time of survey. 5. After the survey, the assessment of the assessee was taken up under scrutiny and the assessment u/s 143(3) was completed on 26.03.2013 determining total income at Rs. 1,25,78,872/- by disallowing the deduction of Rs. 1,25,00,000/- u/s 80IB(10) on income disclosed during the course of survey u/s 133A by treating it as income from other sources. In the course of assessment proceedings, assesses filed the detailed explanation in response to notice issued on 20.03.2013 by filing the audit report in Form No. 10CCB and stating that all the conditions for deduction u/s. 801B(10) were compiled by the assessee. The assessing officer allowed the deduction of Rs. 1,55,64.646/....
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.... verified and placed on record. From the details furnished, it is seen that the residential project is constructed on the land of 5333 sq. Meter equivalent to 1.333 acre. The residential project is situated at Surat where as per the conditions laid down in the section 80-IB, the area of the flats should not exceed 1,500 sq.ft. This has been verified from the copy of the plan furnished during the course of assessment proceedings. As per the plan furnished, it was seen that area of the flats are admeasuring 779 sq. ft., 897sq. ft., 945 sq. ft., and 936 sq. ft. A copy of the sale deed seen that the project approved by local authority on 30.03.2008 and the project was completed during F. Y 2010-11 for which building User certificate [BUG] is furnished. Assessee has also furnished copy of purchase deed of land, approved planned development permission dated 30.03.2007, and certificate from architect for verification. Considering the totality of the facts and circumstances of the case and the assessee is fulfilling the condition stipulated in section 801B of the Act, the claim of deduction u/s 80IB of the Act is accepted." 7. It is to be noted that the issue mentioned in your notice u/s....
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....ses claimed investment allowance under S. 32A of Rs. 5,35,424/-on certain fixed assets. However, the assessing officer allowed the claim only in respect of certain fixed assets. On appeal before the CIT(A), the issue was decided in favour of the assessee. Thereafter, the Commissioner invoked the provision of S. 263 on the ground that the action of the assessing officer in granting deduction u/s. 32A on certain fixed assets was erroneous. The Honourable Gujarat HC held that "once the Commissioner (Appeals) allowed the assessee's claim on certain fixed assets, the order of the Assessing Officer stood merged with that of the Commissioner (Appeals) and hence, no part of the order of the Assessing Officer could have been revised by the Commissioner under S. 263." Here also the assessing officer partly allowed the deduction u/s.80IB(10) of Rs. 1,42,24,597/- as against the claim of deduction by the assesses of Rs. 1.38,40,049/-. 4. This issue is not the part of the reasons recorded u/s.148(2). The subject matter of revision u/s.263 of the I.T. Act, 1961 unconnected with the issues which were subject matter of issuance of notice u/s. 148 and completion of reassessment u/s.143(3) r.....
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....the Learned Departmental Representative (in short "the ld. DR") for the Revenue relied on the para no.5 of the ld. PCIT order. 11. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. PCIT and other material brought on record. We note that in assessee's case, original assessment was framed under section 143(3) of the Income Tax Act, 1961 on 26.03.2013 wherein the matter relating to the deduction under section 80IB(10) of the Income Tax Act has been discussed and adjudicated by the assessing officer. The order framed under section 143(3) of the Act, is reproduced below: "3. The assessee is a partnership firm, engaged in the activity of developing and building housing projects approved by the local authority. The assessee firm commenced its residential project in FY 2009-10 called Nilkanth Heights, Block A, B & C at Dumbhai, Surat. During the year under consideration the assessee has not completed the said project but booked receipt from sale of flats during the year for which sale documents h....
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....on which is not true. The assessee has not provided details called for vide show cause notice viz. Name and Address from whom the amount were received and also its purpose, neither during the course of survey proceedings or assessment proceedings. Hence it is clear that the assessee firm is not a position to give the details of receipts of Rs. 1,25,00,000 being amount disclosed during the course of survey. 6.2. The AR of the assessee has also stated to have relied upon provision of the Income tax Act and various judgement for claiming deduction u/s 80IB of the Act on the amount of Rs. 1,25,00,000/-. However, the assessee has failed to explain and also to provide the judgments on which he is relying and the facts which are similar to it. Here in the instant case assessee could not prove that such receipts of Rs. 1,25,00,000 as its business receipts of this project. 6.3. Further, the reply of the assessee is also not acceptable particularly in view of the fact that when the assessee claim that the receipt disclosed in survey is a business receipt from the developing and building residential project, it is for the assessee to prove that the same is a business receipt of its projec....
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....ls furnished, it is seen that the residential project is constructed on the land of 5333 sq. meter equivalent to 1.333 acre. The residential project is situated at Surat where as per the-conditions laid down in section 80IB, the area of the flats should not exceed 1,500 sq. ft. This has been verified from the copy of the plan furnished during the course of assessment proceedings. As per the plan furnished, it was seen that area of the flats are admeasuring 779 sq. ft., 897 sq. ft., 945 sq. ft. and 936 sq. ft. A copy of the sale deed was called for which was furnished for verification. From the documents furnished, it is seen that the project approved by local authority on 30.3.2008 and the project was completed during F.Y. 2010-11 for which Building User Certificate [BUG] is furnished Assessee has also furnished copy of purchase deed of land, approved plan and development permission dated 30.03.2007 and certificate from architect for verification. Considering the totality of the facts and circumstances of the case and the assessee is fulfilling the conditions stipulated in section 80IB of the Act, the claim of deduction u/s. 80IB of the Act is accepted." 14. From the above assessm....
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....ows the Assessing Officer has applied his mind during the original assessment proceedings and denied deduction under section 80IB(10) in respect of "on money" of Rs. 1,25,00,000/-. In addition to this, it should also be noted that no order under section 263 shall be made after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. In assessee's case the original assessment order was framed under section 143(3) of the Act on 26.03.2013, and the said order passed by the Assessing Officer under section 143(3) can be revised under section 263 of the Act, up to 31.03.2015 by the ld PCIT, however, the ld. PCIT has revised the original assessment on 03.03.2020. Therefore, order passed by the ld. PCIT is in violation of the provisions of sub-section 2 of section 263 of the Act; which reads as follows: "Sec. 263(2) "No order shall be made under sub-section (1) after the expiry of 2 years from the end of the financial year in which the order sought to be revised was passed." Thus, the concluded matter in respect of deduction under section 80IB(10) of the Act in original assessment proceedings u/s 143(3) of the Act, cannot be revis....
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....ment, to assessment. An assessee who has failed to file an appeal against the original order of assessment cannot utilize the reassessment proceedings as an occasion for seeking revision or review of what had been assessed earlier. He may only question the extent of the reassessment insofar as the escaped assessment is concerned. The revenue is similarly bound. . . ." (p.263) The same principle was reiterated by a Division Bench of the Calcutta High Court in CIT v. Kanubhai Engineers (P.) Ltd. [2000] 241 ITR 665. 15. We, therefore, are clearly of the opinion that keeping in view the facts and circumstances of this case and, in particular, having regard to the fact that the Commissioner of Income-tax exercising its revisional jurisdiction reopened the order of assessment only in relation to lease equalization fund which being not the subject of the reassessment proceedings, the period of limitation provided for under sub-section (2) of section 263 of the Act would begin to run from the date of the order of assessment and not from the order of reassessment. The revisional jurisdiction having, thus, been invoked by the Commissioner of Income-tax beyond the period of limitation, ....