TaxTMI 
TaxTMI 
2025 (7) TMI 1743
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....(3) consecutively for the AY 2008- 09 dated 04/11/2010, AY 2009-10 dated 09/12/2011 and AY 2010- 11 dated 19/03/2013, after due verification, consideration and application of mind. 2. That on the facts and in the circumstances and in law the AO Ward 3(1) Raipur has erred in recording the reasons instead of the AO, ACIT Circle 1(2) Raipur and in issuing the notice u/s 147 since the original assessment order u/s 143(3) was passed by the AO, ACIT Circle 1(2) Raipur. 3. That on the facts and in the circumstances and in law the Ld. CIT(A) erred in holding the re-opening as justified, since the reasons recorded was on the basis of disallowance made in sec.143(3) order for AY 2012-13, such disallowance was deleted by the CIT(A) and the very reason of re-opening for AY 2009-10 by the AO became non-existent. 4. That on the facts and in the circumstances and in law the Ld. CIT(A) erred in holding in its order "that the AO had undoubtedly a fresh and tangible material by way of information about nonavailability of completion certificate for re-opening the case u/s 147 for AY 2009-10". 5. That on the facts and in the circumstances and in law the Ld. CIT(A) e....
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....essee company, which is engaged in the business of a builder and developer had e-filed its return of income for A.Y.2009-10 on 27.09.2019, declaring an income of Rs. Nil [after claiming deduction u/s. 80IB(10) of the Act]. The return of income filed by the assessee company was processed as such u/s. 143(1) of the Act. The original assessment was, thereafter, framed by the A.O. vide his order passed u/s. 143(3) of the Act, dated 09.12.2011, wherein income of the assessee company was determined at Rs. 33,57,420/-. 3. Based on information gathered by the A.O. while framing the assessment of the assessee company for A.Y.2012- 13 that the assessee company had despite the absence of a completion certificate issued by the competent authority claimed deduction u/s. 80IB(10) of the Act, which, thus, was disallowed while framing the assessment for the aforementioned year, i.e., A.Y.2012-13, therein, reopened its case for A.Y.2009-10. For the sake of clarity, the "reasons to believe" based on which the case of the assessee company was reopened are culled out as follows: 4. During the reassessment proceedings, the assessee company on being called upon to produce a copy of the....
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.... completed the project on 29.10.2007 which is well within the prescribed time limit. It has further been submitted that it had applied on 25.08.2007 for completion certificate and thereafter several request letters were also submitted to the Nagarpalika Nigam, Raipur but the Nagarpalika Nigam, Raipur issued the completion certificate on 24.08.2016. Since, there was delay in issuing completion certificate by the Nagarnigam Palika, Raipur and it had furnished the request for the said certificate well within the time limit, it cannot be said that the project was not completed within time limit. The appellant also submitted certificate from chartered Engineer and Architect certifying the completion of project on 28.03.2008. The appellant also submitted a copy of CIT(A) order for A.Y. 2012-13 wherein the CIT(A) has accepted the contention of the appellant and allowed the claim of deduction u/s 80IB(10) of the Act. 4.1.1 Briefly, a housing project namely C.G. Heights was approved by Nagapalika Nigam, Raipur on 18.03.2005 and the project was required to be completed by 31.03.2009 to avail the benefit of deduction u/s 80IB(10) of the Act. During the assessment proceedings for AY 2....
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....e the time limit of completion of project for eligibility of deduction u/s 80IB(10) of the Act. The extract of the section 80IB(10) is reproduced herewith. Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings. 80-IB. (10) The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 2008 by a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment year from such housing project if,- (a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998 and completes such construction,- (i) in a case where a housing project has been approved by the local authority before the 1st day of April, 2004, on or before the 31st day of March, 2008; (ii) in a case where a housing project has been, or, is approved by the local authority on or after the 1st day of April, 2004 but not later than the 31st day of March, 2005, within four years from the end of the financial year in w....
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....8.03.2005 and the same was required to be completed by 31.03.2009 i.e. four years from the end of the financial year in which the housing project is approved by the local authority as per the provision of section 80IB(10)((a)(ii) of the Act for getting the benefit of deduction u/s 80IB(10) of the Act. Hence, the appellant's argument on this count is rejected. 4.1.4 During the appellate proceedings, the appellant furnished a certificate of chartered engineers certifying the completion of project on 28.03.2008 and letter addressed to local authority dated 25.08.2007, 30.07.2010, 22,12,2010, 01.04.2011, 12.02.2015 and 12.08.2016 in support of its contention that the housing project was completed on or before 31.03.2008. Perusal of these evidences reveals that the letter dated 25.08.2007 doesn't relate to completion of housing project but it relates to completion of certain flats, which were mortgaged vide letter dated 28.02.2005. Further, the letter dated 30.07.2010 doesn't bear any receipt stamp of the local authority. In fact, the appellant furnished the proper application letter dated 22.12.2010 with the requisite annexures for the first time for issuing comple....
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.... "change of opinion" on the same set of facts as were available before his predecessor, which was not permissible as per the mandate of law; and (iii). that the ITO-Ward 3(1) has erred in initiating reassessment proceedings as the original assessment u/s 143(3), dated 09.12.2011 was framed by the ACIT-Circle1(2), Raipur; and (iv). that the lower authorities had, based on misconceived facts, declined the assessee's claim for deduction u/s 80IB(10) of the Act. 10. As the assessee company has assailed the validity of the jurisdiction assumed by the A.O for framing the impugned assessment vide his order passed u/s. 148 r.w.s 143(3) dated 27.12.2016; therefore, we shall first deal with the same. 11. At the threshold of hearing of the appeal, Shri Mahendra Agrawal, the Ld. Authorized Representative (for short 'AR') for the assessee company submitted that as the A.O. had originally framed the assessment in the case of the assessee company vide his order passed u/s. 143(3) dated 09.12.2011; therefore, in the absence of any failure on the part of the assessee company to fully and truly disclose all material facts necessary for framing of the assessment in its case for the ....
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....d at Rs. 82,94,384/- but thereafter, was revised to a correct figure of Rs. 68,50,234/-. It was, thus, the claim of the Ld. AR that as the assessee's entitlement for claiming deduction u/s. 80IB(10) was duly looked into by the A.O while framing the original assessment vide his order u/s. 143(3) dated 09.12.2011; therefore, the said concluded assessment could not have been dislodged based on a mere "change of opinion" by the successor A.O. 13. As is discernible from the records, the view taken by the A.O. as regards the ineligibility of the assessee company for claiming deduction u/s. 80IB(10) for the reason that It had not obtained the "completion certificate" from the competent authority, i.e., Municipal Corporation, Raipur, was, in turn, based on his observations recorded while framing the assessment in the case of the assessee company for A.Y.2012- 13, Page 71- 76 of APB. For the sake of clarity, the observations of the A.O. based on which the assessee company was held ineligible for claiming deduction u/s. 80IB(10) of the Act while framing assessment in its case for A.Y.2012-13 are culled out as under: "6. The assessee company was engaged in Construction of re....
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....d repeatedly to furnish completion certificate from the competent Local Authority but it has not yet been submitted. In the written reply dt. 16-02- |2015 it has been stated by the assessee that : (a) He has applied to the Local Authority - Nagar Palik Nigam, Raipur on 20-10-2010, 11-04-2011 & 12-02-2015 for issue of completion certificate for the residential project, but the authorities have not yet issued the completion certificate. (b) The project was started on 21-08-2005 and completed on 29-10-2007. The facts of completion are well established through the Chartered Engineer and Architect Certificate and also from the fact that residential complex so constructed is already in use by the buyers of the flats since 2008. The assessee was again asked to produce the completion certificate but he failed to produce completion certificate. The Inspector was deputed for spot enquiry. The Inspector's report is received and placed on record. In the report the inspector has informed that he had requested to the assessee to provide the copy of completion certificate issued by the Local Authority, which is mandatory compliance under the Act for claiming th....
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....see company had not obtained a "completion certificate" within the prescribed time period as per the mandate of Sec. 80IB(10) of the Act; therefore, we are unable to concur with the contention of the Ld. AR that reopening of its concluded assessment in the absence of any fresh/tangible material coming to the notice of the A.O. after the culmination of the original assessment was based on a mere "change of opinion" by the successor A.O. 15. We shall now deal with the contention of the Ld. AR that as the A.O. had framed the original assessment in the case of the assessee company vide his order passed u/s. 143(3) dated 09.12.2011; therefore, in the absence of any failure on the part of the assessee company to disclose fully and truly all material facts necessary for its assessment for the said year, i.e., A.Y.2009-10, the same could not have been reopened after four years from the end of the relevant assessment year. 16. Observing that the assessee company had not specifically assailed the impugned order by raising a specific ground of appeal as regards the validity of jurisdiction assumed by the A.O in the backdrop of the mandate of the "1st proviso" to Section 147 ....
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....ct. Thereafter, the A.O., in the backdrop of the aforesaid fact, observed that as per the facts and documents on record the assessee company was not entitled to claim deduction u/s. 80IB(10) for the year under consideration, i.e., A.Y.2009-10; therefore, its income to the said extent had escaped assessment within the meaning of Section 147 of the Act. As the for reopening the concluded assessment of the assessee company for the year under consideration, i.e., A.Y.2009-10, was based on the fact that the competent authority had not issued the certificate for completion of the housing project of the assessee company within the prescribed period, a fact that was not disclosed by the assessee company in its return of income/audit report for A.Y.2009-10; therefore, we are of a strong conviction that the same would suffice for satisfying of the requisite condition contemplated in the "1st proviso" to Section 147 of the Act, i.e., there was failure on the part of the assessee company to disclose fully and truly all material facts necessary for framing of its assessment for the year under consideration, i.e., A.Y.2009-10. 19. In sum and substance, as can be gathered from the "reaso....
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....are unable to concur with the Ld. AR that reopening of the concluded assessment of the assessee's case is hit by the non-satisfaction of the pre-conditions contemplated in the "1st proviso" to Section 147 of the Act. 20. We shall now deal with the claim of the Ld. AR that the A.O. had wrongly assumed jurisdiction and reopened the concluded assessment of the assessee company without obtaining approval from the appropriate authority, i.e., the Pr. CIT, Raipur, as required per the mandate of Section 151 of the Act. The Ld. AR had drawn our attention to his written submissions dated 21.11.2023 wherein it has assailed the validity of the jurisdiction assumed by the A.O dehors obtaining the satisfaction/approval of the competent authority u/s. 151 of the Act. Elaborating on his aforesaid contention, the Ld. AR submitted that though the assessee company had in its objections filed before the A.O. qua the validity of the jurisdiction assumed by him for reopening the concluded assessment u/s. 147 of the Act, had assailed the same on the ground of want of approval of the competent authority u/s. 151 of the Act, but the latter had, without addressing the said specific objection, proc....
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....r vide order u/s. 148 r.w.s. 143(3), dated 27.12.2017 was liable to be quashed for want of valid assumption of jurisdiction. Based on his aforesaid contention, it is the claim of the assessee company that as the ITO, Ward-3(1), Raipur had wrongly assumed jurisdiction and framed the reassessment; therefore, the same could not be sustained and is liable to be vacated. 23. We have thoughtfully considered the aforesaid claim of the assessee company and are unable to persuade ourselves to concur with the same. As the jurisdiction over the case of the assessee company in pursuance to the Notification No.1/2014- 15 dated 15.11.2014 issued by the Jt. CIT, Range-3, Raipur was vested with the ITO, Ward-3(1), Raipur, therefore, there is no substance in the claim of the Ld. AR that the said A.O had wrongly assumed jurisdiction and framed the reassessment vide order u/s. 148 r.w.s. 143(3), dated 27.12.2017. At this stage, we may herein observe that pursuant to the CBDT Instruction No.1/2011 dated 31.01.2011, inter alia, in the case of corporate assessee's with returned income upto Rs. 20 lacs, the jurisdiction to frame assessment would remain with the ITO. Accordingly, on conjoint read....
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....f the residential project, viz. "C.G Heights". Also, the CIT(Appeals) refuting the claim of the assessee company that its case was covered by Section 80IB(10)(a)(iii) of the Act, had observed that as the same was inserted only vide the Finance Act, 2010 w.e.f. 01.04.2010, i.e., much later than the date of approval of the project; thus, the same was not covered by the said sub-clause. Also, the CIT(Appeals), to fortify his aforesaid observation, had taken note of the fact that the Municipal Corporation, Raipur, had in its "completion certificate" dated 24.08.2016 categorically stated that the housing project of the assessee company was approved vide letter No.21/83/2005, dated 18.03.2005. 26. We have given a thoughtful consideration and find no infirmity in the view taken by the CIT(Appeals) that the Municipal Corporation, Raipur had approved the housing project of the assessee company vide its letter No.21/83/2005 dated 18.03.2005. As observed by the CIT(Appeals), and rightly so, the "completion certificate" dated 24.08.2016 issued by the Municipal Corporation, Raipur, therein specifically makes a mention that the housing project of the assessee company was approved vide l....
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....evidence, which prove that the completion certificate was issued by the chartered engineers before 31.03.2009 and furnished before the local authority. In fact, this certificate of chartered engineers was furnished before the Nagarpalika on 22.12.2010 for the first time. So it can be safely concluded that the appellant had made application for CC of the C.G. Heights project before the local authority for the first time on 22.12.2010, which is beyond the prescribed time limit u/s 80IB(10)(a)(ii) of the Act. Thus, the appellant's claim that it had made app 'cation for completion certificate for the project vide letter dated 25.08.2007 is not found to be correct. These facts support the findings of the AO that the project was not completed within the stipulated time period of section 80IB(10) of the Act. In view of the above factual and legal position, the denial of deduction u/s. 80IB(10) of the Act in the present case made by the A.O in the re-assessment order is hereby confirmed." As observed by the CIT(Appeals), and rightly so, the letter dated 25.08.2007 (supra), Page 35 of APB, does not relate to the completion of the housing project, but it relates to ....
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....resaid issue had duly been considered by him while disposing of the appeal of the assessee company for the year under consideration, observing as under: "4.1.2 The appellant contended that the CIT(A), Raipur has allowed its appeal for AY 2012-13 on similar & identical issue vide appeal order no. 268/15-16 dated 01.11.2018. Perusal of this appellate order reveals that the CIT(A) had allowed the issue on the sole basis of completion certificate dated 24.08.2016 subject to satisfaction of the AO on furnishing of the completion certificate dated 24.08.2016 before AO. So there was pre-condition for getting the benefit of deduction u/s 80IB(10) on the basis of CIT(A) order. Thus, the appellant has misplaced in its submission that the Ld. CIT(A)-1, Raipur vide order dated 01.11.2018 for AY 2012-13 has granted full relief on this issue. Since, the date of completion certificate is prima facie beyond the time limit for completion of project for getting benefit of deduction u/s 80IB(10) of the Act, the present appeal warrants examination of facts as well as legal provision. Therefore, I proceed to examine the issue in the light of the CC dated 24.08.2016 afresh." As observe....
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....laneous application is extracted as follows: "4. Resultantly, the miscellaneous application i.e MA 17/RPR/2024 filed by the assessee company/applicant under sub-section (2) of Sec. 254 is partly allowed in terms of our aforesaid observations. Accordingly, as the omission to dispose off the "Ground of appeal no. 6" (supra) had rendered the order passed by the Tribunal while disposing off the assessee's appeal in ITA No. 300/RPR/2023, as suffering from a mistake which is glaring, patent, obvious and apparent from record, making it amenable for rectification under sub-section (2) of Sec. 254 of the Act; therefore, the order to the said limited extent, i.e, for adjudicating the aforesaid "Ground of appeal no. 6" is recalled. The registry is directed to fix the appeal for the aforesaid limited purpose on 24/01/2025 after putting both the parties to notice." 4. That therefore, in this recalled matter, the limited purpose of adjudication for which, it has been placed before us is with regard to "Ground of appeal No.6" which remained un-adjudicated in the first round of appeal which reads as follows: "6. That on the facts and in the circumstances and in law the Ld. CIT....
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....approval of the residential project, viz. "C.G Heights". Also, the CIT(Appeals) refuting the claim of the assessee company that its case was covered by Section 80IB(10)(a)(iii) of the Act, had observed that as the same was inserted only vide the Finance Act, 2010 w.e.f. 01.04.2010, i.e., much later than the date of approval of the project; thus, the same was not covered by the said sub-clause. Also, the CIT(Appeals), to fortify his aforesaid observation, had taken note of the fact that the Municipal Corporation, Raipur, had in its "completion certificate" dated 24.08.2016 categorically stated that the housing project of the assessee company was approved vide letter No.21/83/2005, dated 18.03.2005. 26. We have given a thoughtful consideration and find no infirmity in the view taken by the CIT(Appeals) that the Municipal Corporation, Raipur had approved the housing project of the assessee company vide its letter No.21/83/2005 dated 18.03.2005. As observed by the CIT(Appeals), and rightly so, the "completion certificate" dated 24.08.2016 issued by the Municipal Corporation, Raipur, therein specifically makes a mention that the housing project of the assessee company was appro....
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....dependent evidence, which prove that the completion certificate was issued by the chartered engineers before 31.03.2009 and furnished before the local authority. In fact, this certificate of chartered engineers was furnished before the Nagarpalika on 22.12.2010 for the first time. So it can be safely concluded that the appellant had made application for CC of the C.G. Heights project before the local authority for the first time on 22.12.2010, which is beyond the prescribed time limit u/s 80IB(10)(a)(ii) of the Act. Thus, the appellant's claim that it had made app 'cation for completion certificate for the project vide letter dated 25.08.2007 is not found to be correct. These facts support the findings of the AO that the project was not completed within the stipulated time period of section 80IB(10) of the Act. In view of the above factual and legal position, the denial of deduction u/s. 80IB(10) of the Act in the present case made by the A.O in the re-assessment order is hereby confirmed." As observed by the CIT(Appeals), and rightly so, the letter dated 25.08.2007 (supra), Page 35 of APB, does not relate to the completion of the housing project, but it r....
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....at the aforesaid issue had duly been considered by him while disposing of the appeal of the assessee company for the year under consideration, observing as under: "4.1.2 The appellant contended that the CIT(A), Raipur has allowed its appeal for AY 2012-13 on similar & identical issue vide appeal order no. 268/15-16 dated 01.11.2018. Perusal of this appellate order reveals that the CIT(A) had allowed the issue on the sole basis of completion certificate dated 24.08.2016 subject to satisfaction of the AO on furnishing of the completion certificate dated 24.08.2016 before AO. So there was pre-condition for getting the benefit of deduction u/s 80IB(10) on the basis of CIT(A) order. Thus, the appellant has misplaced in its submission that the Ld. CIT(A)-1, Raipur vide order dated 01.11.2018 for AY 2012-13 has granted full relief on this issue. Since, the date of completion certificate is prima facie beyond the time limit for completion of project for getting benefit of deduction u/s 80IB(10) of the Act, the present appeal warrants examination of facts as well as legal provision. Therefore, I proceed to examine the issue in the light of the CC dated 24.08.2016 afresh." ....
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....as to be examined and dealt with separately. In a very initial case of Delhi Golf Club Limited Vs. New Delhi Municipal Corporation, AIR 1997 Delhi 347, it was held that public interest would be better served by by-passing the rule of res-judicata and taxing the property in a year of assessment if the incidence of tax be rightly attracted under the law and ignoring the factum of its having escaped in an earlier year though by a conscious and deliberate decision. It was the decision wherein the Hon'ble Court had observed that so far as the tax laws are concerned, public interest is involved and, in such scenario, even if in any year certain chargeability was not brought to tax, however, in the subsequent year it can be brought to tax thereby by-passing the principles of res-judicata since it would be the decision taken in the greater interest of the country as a whole. 8. In a famous decision of the Hon'ble Supreme Court in the case of Radhasoami Satsang Vs. CIT (1992) 193 ITR 321 (SC), it has been held that the principles of res-judicata does not apply in the Income Tax proceedings since each assessment year is independent unit in itself and therefore, what decided in one year ma....
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.... was approved vide letter No.21/83/2005 dated 18.03.2005. All these observations by the Ld. CIT(Appeals) has been concurred with and upheld by the Tribunal vide its order dated 11.12.2023 and thereafter, examined each facts in detailed manner regarding claim of deduction u/s. 80IB(10) of the Act of the assessee. Further, the Tribunal holds that it was in concurrence with the CIT(Appeals) that the Municipal Corporation, Raipur, vide its letter No.116, dated 16.08.2005, had given permission to the assessee company to start construction work of the building and the same was not an approval of the residential project, viz., "C.G. Heights." That on examination of the entire facts, the Tribunal had upheld the order of the Ld.CIT(Appeals) wherein it was held that as the housing project of the assessee company, viz., "C.G Heights" was approved by the Municipal Corporation, Raipur vide letter No.21/83/2005 dated 18.03.2005, i.e., prior to 31.03.2005; therefore, as per the provisions of Section 80IB(10)(a)(ii) of the Act, the assessee company was obligated to have completed the construction of the said housing project within four years from the end of the financial year, in which, the same w....