TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1743
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....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) erred in concluding that. AO's action cannot be treated as a change of opin....
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.....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 "completion certificate" issued by the Municipal Corporation, Raipur, dated 24.08.2016, submitted that though it had made a request for issuan....
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....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 2012-13, the AO found that there was no completion certificate with the appellant and it had wrongly claimed the deduction u/s 80IB(10) of the Act and accordingly, the AO d....
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....fits 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 which the housing project is approved by the local authority; (iii) in a case where a housing project has been approved by the local authority on or after the 1st day of April, 2005, within five years from the end of th....
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....it 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 completion certificate of the housing project before the local authority having duly receipt with stamp. Also, there is no independent evidence, which prove that the completion certificate was issued by the chartered engineers before 31.03.2009 and furnished before the local....
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....ircle1(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 year under consideration, i.e., A.Y.2009-10, the concluded assessment framed in its case could not have been dislodged after a lapse of a period of four years from the end of the relevant assessment year. The Ld. A.R in support of his aforesaid contention had relied on the judgment of the Hon'ble High Court of Bombay....
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....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 real estate properties and derives income from sale of residential and commercial properties. For the year under consideration it claimed deduction u/s. 80IB(10) in respect of C.G. Height project. Section 80IB(10) as amended by Finance Act (No.2) 2004, w.e.f 01-04-2005, makes it clear that an assessee will be entitled to claim deduction un....
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....tion 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 the deduction under section 80IB. He has been replied that the application for completion certificate has been filed at the concerned authority. But the assessee did not provide the completion certificate to the inspector. Thus it is very clear that the assessee has no completion certificate as issued by the Local Authority in support of his claim made u/s. 80IB. The production of the completion certificate is a legal requirement prescribed by the S....
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....ith 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 of the Act, we had called upon the Ld. AR to explain on what basis the said claim was being raised before us. In reply, the Ld. AR had stated that the assessee company duly raised the said contention by way of an objection dated 06.06.2016 that was filed with the A.O, on the basis of which the very assumption of jurisdiction for the reopening of its concluded assessment was assailed before him. The Ld. AR had drawn our attention to the letter/objection dated 06.06.2016 that ....
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.... 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 "reasons to believe", which had formed the very basis for reopening the concluded assessment of the assessee company for the year under consideration, the fact that the assessee company in its return of income for A.Y.2009-10 had failed to come forth with full and true disclosure as regards the material fact that the "completion certificate" of its housing project was not obtained within the prescribed period contemplated u/s. 80IB(10) of the Act; thus, the same duly brings its case within the sweep o....
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....d. 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, proceeded with and framed the assessment. The Ld. AR submitted that the aforesaid conduct of the A.O. in not dealing with the specific objection of the assessee company as regards the validity of the jurisdiction assumed by him in the absence of a valid approval u/s. 151 of the Act from the competent authority was clearly in conflict with the judgment of the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. Vs. ITO & Ors, (2003) 259 ITR 19 (SC). 21. We have given thoughtful consideration to the claim of the Ld. A....
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.... 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 reading of the aforesaid Notification No.1/2014-15 dated 15.11.2014 and the CBDT Instruction No.1/2011 dated 31.01.2011, we find no infirmity in the assumption of jurisdiction by the ITO, Ward-3(1), Raipur for framing of the assessment in the case of the assessee company, which had filed its return of income for the year under consideration, i.e., A.Y. 2009-10 on 27.09.2009 declaring an income of Rs. Nil. We, thus, finding no merit in the claim of the Ld. AR qua the validity of the jurisdiction assumed by the A.O for initiating reassessment proceeding....
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....6 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 letter No.21/83/2005 dated 18.03.2005. Apart from that, we concur with the CIT(Appeals) that the Municipal Corporation, Raipur, vide its letter No.116, dated 16.08.2005, Page 39 of APB, 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." On the basis of the aforesaid facts, we are of the view that the CIT(Appeals) had rightly concluded that as the housing project of the assessee company, viz., "C.G Heights" was approved by the Municipal Corporation, Ra....
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....ion 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 the completion of certain flats which were mortgaged vide letter dated 28.02.2005. Also, a perusal of the letter dated 30.07.2010, Page 48 of APB, supports the observation of the CIT(Appeals) that as the same does not bear any acknowledgment stamp of the local authority, the same, thus, could not be acted upon. As observed hereinabove, the CIT(Appeals) had rightly concluded that the assessee company had furnished a letter dated 22.12.2010 a/w. requisite annexures with the local authority, for the first time, for obtaining the "completion certificate" of the housing project, which was duly acknow....
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....enefit 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 observed by the CIT(Appeals), his predecessor, while disposing of the appeal for A.Y.2012-13, had allowed the issue on the sole basis of the completion certificate dated 24.08.2016 subject to the satisfaction of the A.O on furnishing of the "completion certificate" dated 24.08.2016 before him. Accordingly, the CIT(Appeals) had rightly observed that there was a pre-condition for getting the benefit of deduction u/s. 80IB(10) on the basis of the order of his predecessor for A.Y.2012-13. As the "completion certificate" issued for the housing project of the assessee company, viz., "C.G. Heights" was beyond the prescribed period for c....
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....d 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(A) erred in confirming the disallowance u/s 80IB(10) of the Act by the AO as the conditions to allowability of such deduction was examined by the AO in the first year of claim during AY 2008-09 in the proceedings u/s. 143(3)." That as is discernible from the aforesaid ground, it spells out that the Ld. CIT(A) erred in confirming the disallowance u/s 80IB(10) of the Act by the AO as the conditions to allowability of such deduction was examined by the AO in the first year of claim during AY 2008-09 in the proceedings u/s 143(3) of the Act. In other words, the assessee submitted that such disallowance u/s. 80IB(10) of the Act is allowable since the A....
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....etter 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 letter No.21/83/2005 dated 18.03.2005. Apart from that, we concur with the CIT(Appeals) that the Municipal Corporation, Raipur, vide its letter No.116, dated 16.08.2005, Page 39 of APB, 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." On the basis of the aforesaid facts, we are of the view that the CIT(Appeals) had rightly concluded 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 p....
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....ese 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 the completion of certain flats which were mortgaged vide letter dated 28.02.2005. Also, a perusal of the letter dated 30.07.2010, Page 48 of APB, supports the observation of the CIT(Appeals) that as the same does not bear any acknowledgment stamp of the local authority, the same, thus, could not be acted upon. As observed hereinabove, the CIT(Appeals) had rightly concluded that the assessee company had furnished a letter dated 22.12.2010 a/w. requisite annexures with the local authority, for the first time, for obtaining the "completion certificate" of the housing project, which was duly acknowledged by the latter. Also, we concur with the CIT(Appeals) that there was no evidence that....
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....laced 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 observed by the CIT(Appeals), his predecessor, while disposing of the appeal for A.Y.2012-13, had allowed the issue on the sole basis of the completion certificate dated 24.08.2016 subject to the satisfaction of the A.O on furnishing of the "completion certificate" dated 24.08.2016 before him. Accordingly, the CIT(Appeals) had rightly observed that there was a pre-condition for getting the benefit of deduction u/s. 80IB(10) on the basis of the order of his predecessor for A.Y.2012-13. As the "completion certificate" issued for the housing project of the assessee company, viz., "C.G. Heights" was beyond the prescribed period for completion of the project for getting benefit u/s. 80IB(10) of the Act; thus, the CIT(Appeal....
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....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 may not apply in the following year. Further, in the case of Instalment Supply (Pvt.) Ltd. Vs. Union of India, AIR 1962 SC 53, the Hon'ble Supreme Court held that "in tax matters there is no question of res judicata because each year's assessment is final only for that year and does not govern later years." The principle of res judicata is not the creature of any statute or the handiwork of any code of law. It is the gift of public policy. The Hon'ble High Court of Bombay in the case of H.A. Shah and Co. Vs. CIT (1956) 30 ITR 618 (Bom.) has held that "the principle of estoppel or res judicata does not strictly apply to the Income Tax authorities" and yet declaring that "an earlier decision on the same question cannot be reopened if ....
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....n 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 was approved by the local authority, i.e., latest by 31.03.2009. 11. The Tribunal further observed that there was no evidence place on record to prove that the "completion certificate" was issued by the chartered engineer before 31.03.2009 and was furnished with the local authority within the prescribed period. It was observed that the Chartered Engineers had, on 22.12.2010, for the first time, furnished a "completion certificate" of the housing project with the Nagar Palika, Raipur, the CIT(Appeals) had rightly observed that the assessee company had made an application for obtaining the "completion certificate" of its housing project from the local authority for the first time on 22.12.2010, which, however, was beyond the prescribed peri....