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TMI Blog2014 (3) TMI 761X X X X Extracts X X X X X X X X Extracts X X X X ..... ined to jurisdiction without touching upon the case on merits,-- 1. the Tribunal is right in law in considering the case on merits and setting aside the order of Commissioner; 2. is not the order of the Tribunal on merits uncalled for and perverse?" 2. These two I.T.Appeals pertain to assessment years 2005-06 and 2006-07. The brief facts that led to filing of the present appeals are as under:- Respondent-assessee is a company engaged in the business of constructing apartments and villas. Declaring the taxable income of Rs. 6,66,450/-, the company filed its return of income on 31.10.2005 so far as 2005-06. It declared a taxable income of Rs. 52,11,011 in its return of income filed on 24.11.2006 so far as 2006-07. In both the years assessee had claimed certain amount as deductions allowable under Section 80-IB(10) of the Income Tax Act (hereinafter referred to as the Act) being profits and gains from infrastructure development i.e. developing and building of housing projects. Assessing officer made a preliminary enquiry and found that two projects undertaken by the assessee during the above two assessment years did not qualify for deduction under Section 80IB of the Act. Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the file. After perusal of a note in the file by predecessor in office, assessing officer in question felt some violation of the approved plan seems to exist and also possibility of combining adjacent apartments to form a single unit, opined, verification by inspection of the building was necessary. 5. As a matter of fact, Smt.Daisy Abraham and one Mr.K.T.Anil Kumar, two inspectors, were sent to have the spot study and give a report. Though such officers went to the building and saw the apartments, their information as per records reveal that some apartments were opened and most of the apartments were locked as those apartments were already handed over to the purchasers. The assessee was also not in possession of the keys of those apartments. This would indicate that they requested the assessee to furnish the keys of those apartments which were locked. However, they were not able to make a reasonable assessment of the factual situation. This is what contained in the report dated 23.12.2008. In the report those officers also opined, the correctness of the area of the apartments could be verified only with expert's assistance in the field. The assessee also responded to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 80-IB for the entire project' itself shows that there has been some violation of the approved plan of the project. 4. The assessee's contention that the Commissioner has no material to come to the conclusion that the assessment is erroneous and prejudicial to the interests of revenue, cannot be accepted. The provisions of section 263 empowers the Commissioner to call for and examine records of any proceedings under the Act if he considers that any order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue. In this case, having called for and examined the assessment proceedings for the above assessment years, I am of the considered view that the Assessing Officer has failed to make enquiry as regards to the allowability of the claim of the assessee under Section 80-IB and hence the assessment order of the AO in allowing the same, without making proper and detailed enquiry, is erroneous and prejudicial to the interests of revenue and, therefore, amenable to revisional jurisdiction of the Commissioner. xxxx xxxxx xxxx" 8. Ultimately, at paragraph 6, he opined that assessment orders passed by the assessing off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me- Tax (2014) 360 ITR 36(Ker). 11. So far as the orders of the Commissioner, he also contends that it was open remand with reference to Section 80- IB (10) of the Act. In other words, every question that has to be considered under Section 80-IB(10) of the Act was kept open for consideration. Therefore, Tribunal ought not have proceeded on other materials which were available in the assessment proceedings before the Assessing Officer. According to learned Standing Counsel, the occupancy certificate and approved plan cannot be considered without any verification for the purpose of allowing deductions under Section 80(i)B and the subjective satisfaction of the assessing officer with reference to deductions claimed by the assessee requires verification and satisfaction by the officer concerned. Therefore, having opined that required material was not available, the assessing officer was not justified in passing such orders. Therefore, Tribunal ought to have confirmed the orders of Commissioner of Income Tax under Section 263 of the Act and orders of the Tribunal deserves to be set aside. 12. As against this, learned Senior Counsel, Shri.Abraham Markose submits that it was very much w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce warranted to initiate proceedings under Section 263 of the Act. He also relies upon two decisions in Commissioner of Income-Tax vs. L.F.D'Silva (1991) 192 ITR 547 and Commissioner of Income Tax v. Hindusthan Coconut Oil Mill (2002) 255 ITR 428). 14. We have gone though the judgments relied upon by the Standing Counsel as well as Senior counsel. In the above appeals, the entire controversy revolves around whether circumstances warrant initiation of proceedings under section 263 of the Act by the Commissioner or not. On perusal of the assessment order, though assessing officer had made a mention that so far as assessment year 2005-06 the limitation was running by 30.12.2008, we note, even in respect of 2006- 07, the limitation for completion of assessment proceedings would be over by 31.12.2008. There was an attempt on the part of learned Senior Counsel to refer to this observation of the assessing officer to contend that as the limitation was running out, the assessing officer hurried up and proceeded with the assessment. If this argument were to be believed, it was within the competency of the assessing officer to reject the claim of deduction. On the other hand, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It will take its own course of action in accordance with law. Whether there was extraneous consideration pertaining to issues which were required to be considered or not cannot be looked into and discussed in these appeals. We are only required to see whether Commissioner of Income Tax was justified in initiating and proceeding with the matter by the impugned order. 18. In order to accept the approved plan, occupancy certificate and building tax assessment order, none of the provisions with reference to Section 80-1B provide that production of such documents would be sufficient. If that were to be the intention of the legislature, they would have said so in the relevant provisions. On the other hand, reading of Section 80-1B and the relevant sub-section clearly indicates it is the factual situation which would decide the allowance of claim or not. In other words, the subjective satisfaction which we referred to above is with regard to material particulars. How one gets these material particulars, could be from the documents produced by the assessee and if a doubt or suspicion arises in the mind of the assessing officer he has to make an enquiry and secure material which dispels h ..... 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