9911796707
TMI Blog2016 (2) TMI 600X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of such selection; and (c) completion of assessment vide assessment order dated 30.12.2011 should have been allowed and consequently, the assessment order dated 28.12.2011 was liable to be declared as null and void. WITHOUT PREJUDICE TO THE AFORESAID 3. BECAUSE the "CIT(A)" has erred in law and on facts in upholding the disallowance of appellant's claim for exemption under section 80 1B(10) of the Act in relation to the "Residential Housing Project" known as "Fortuna Apartments", on the ground that the same was hit by clause (ii) of explanation thereunder, in as much as completion certificate has been issued by the Lucknow Development Authority on 21.10.2009 whereas the cutoff date for such completion was 31.3.2008. 4. BECAUSE 'essence' of the requirement in this respect is that the project [in relation to which exemption under section 80IB(10) is claimed] should be completed by the stipulated date (which in the instant case was 31.3.2008) and on a due consideration of the facts and circumstance of the case, particularly that; a) the residential housing project by the name of "Fortuna Apartment" had undisputedly been completed well before 31.3.2008; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view favorable to the assessee should have been followed and accordingly the "CIT(A)" should have followed the decision of the Hon'ble ITAT in the appellant's own case for the assessment year 2007-08 (as has been extensively referred to in Annexure-I hereto, supra), so as to allow the appellant's claim for exemption under section 80IB(10) of the Act. 10. BECAUSE the CIT(A) has erred in law and on facts in upholding the disallowance of appellant's claim for exemption under section 80IB(10) in relation to another project namely "Forttma Reviera Blues Housing Project" on the grounds that; a) built-up area of some of the flats (24 in number) constructed under the said project had exceeded the limit of 1500 sq. ft. as prescribed in section 80IB(10)(c) of the Act; b) the completion certificate was issued by the local authority i.e. Lucknow Development Authority on 26.09.2011, where as the stipulated period had expired on 31.3.2011; and c) the built-up area of the shops and other commercial establishments included in the said residential housing project, was in excess of the area permissible as per clause (d) of section 80IB(10). 11. BECAUSE working of built-up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Again on 14.7.2015, the assessee sought adjournment and the hearing was further adjourned with "last opportunity" for 17.7.2015. Again on 17.7.2015, the hearing was further adjourned at the request of the assessee with "final last opportunity" for 12.8.2015. Again on 12.8.2015, the hearing was further adjourned at the request of the assessee with "final last opportunity" for 18.8.2015. Similar is the position on 18.8.2015 and the hearing was adjourned with "final last opportunity" at the request of the assessee for 7.9.2015. Again on 7.9.2015, 14.9.2015 and 28.10.2015, the hearing was adjourned at the request of the assessee with "last opportunity". On 5.11.2015, the hearing was again adjourned with "final last opportunity" for 23.11.2015. It was also made clear on different dates that no further adjournment would be granted, but despite all these clear warning, the assessee did not make any effort to argue its case and all the time assessee sought adjournment. When the matter was again listed for hearing on 10.12.2015, assessee moved the present application for adjournment. Keeping in view the non-cooperative attitude of the assessee, we had no option but to hear the appeal ex-p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;ble M.P. High court in the case of CIT vs. Global Reality, 379 ITR 107, in which it has been held that in the case of housing project approved by the Local Authority before April, 1, 2004, he must submit the completion certificate issued by the authority having issued before 31.3.2008. It was also held that in a case the housing project approved on or after April, 1, 2004, the assessee can avail the benefit provided completion certificate issued by the Local Authority is within four years from the end of the financial year, in which the concerned project was approved by the Local Authority. If the condition is not fulfilled, the assessee who maintains the work-in-progress accounting method and had claimed deduction under section 80-IB(10)(a) must suffer the consequence of disallowance or withdrawal of the benefit claimed by him on that count 9. Having carefully examined the written submission filed by the assessee and the case laws relied on by it and the orders of the authorities below in the light of Revenue's contentions, we find that in the present case the solitary issue involved is with regard to the claim of deduction under section 80IB(10) of the Act and deduction unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he findings of the Tribunal in earlier assessment years on these two aspects. Therefore, there is no controversy in this regard. 14. The main dispute was raised with regard to the date of completion of the housing project, though this issue was also raised in earlier years and the Tribunal has given a specific finding that the housing project was completed before 31.3.2008, but the ld. CIT (DR) has emphatically argued that this finding of the Tribunal in this regard is contrary to the facts available on record. During assessment year 2005-06, the impugned completion certificate as available at page 26 of the compilation of the assessee, was neither placed before the lower authorities nor before the Tribunal during the course of hearing of the appeal though the appeal was heard on 8.4.2010 and the said completion certificate was issued by the LDA to the assessee on 23.10.2009. The Tribunal has given a finding on the basis of its own assumption of facts that the project was completed before 31.3.2008 during assessment year 2005-06. In the assessment year 2007-08, the Tribunal has simply followed its earlier order for assessment year 2005-06 in the assessee's own case. The order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t can safely be held that the assessee got the approval of the local authority before 1st day of April 2004 even if the first approval obtained i.e. the approval dated 24/11/2001 is to be considered. Therefore, we are of the opinion that the assessee got the approval of the local authority before the cut off date as mentioned in sub clause (i) to clause (a) to sub section 10 of section 80IB of the Act. The another condition which is required to be fulfilled is provided in clause (b) of sub section 10 to section 80IB which relates to the area of land on which the project is constructed. The provisions contained therein specify the area which shall be minimum one acre. In the instant case, the assessee constructed the complete housing project known as "Fortuna Apartment Housing Project" on the total area of 4550.07 sq. mtr. The assessee was in possession of the said area and the mode of acquisition of land was as under: Date Instrument Area Purchased 15/04/2002 Through purchase deed 52.44 sq. metres 24/04/2002 Under Builder's Agreement 2657 sq. metres 24/04/2002 Under Builder's Agreement 1840.63 sq. metres executed on 14/10/2003 4550.07 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee as project of works contract. Such a finding reached by learned CIT(A) is without any cogent reasons and the same is divorced from the approved scheme which was undertaken by the appellant in assessment year 2004-2005 by making his own investment and income declared on partial completion method from assessment year 2004-2005 till the year under consideration. The Assessing Officer himself has allowed the claim u/s 80 IB(10) of the Act in assessment year 2004-2005 in the summary assessment. Thereafter, the Appellate Tribunal in assessment year 2005-2006 found that the appellant had satisfied all the conditions as are laid u/s 80 IB (10) of the Act for claiming deduction under that section and thereafter by a detailed reasoning contained in the said order dated 08/04/2010 and also by recording a finding that the project stands completed prior to the year ended on 31/03/2008, allowed the deduction for the assessment year 2005-2006 as well. No change in facts or law has been reported or brought to our notice by either of the parties. The CBDT by its order No. 4 of 2009 dated 30/06/2009 reported as [2009] 224 CTR (St.) 196 has clarified that in a case where the assessee follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he date of completion of the housing project. In the light of these facts, the issue with regard to the date of completion of the housing project requires a fresh adjudication by the Tribunal without being influenced by the earlier orders of the Tribunal, as those orders can be called to be an order per incuriam. 17. We have also examined various judgments referred to by the assessee on the point of rule of consistency and we find that in all those judgments it has been repeatedly held that the principle of res judicata are not applicable in the Income-tax proceedings and every assessment year is independent assessment year, but the rule of consistency should be followed, if a particular view is taken by the Tribunal in a particular year with respect to certain facts, the same view should be followed in succeeding years unless and until the facts are changed. In the instant case, the earlier view of the Tribunal is based on assumption of facts whereas in the instant assessment year, the relevant facts are placed before the Tribunal. Therefore, the Tribunal is not supposed to follow its orders of earlier years. If certain relevant facts are placed on record, the issue requires a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken to be the date on which the completion certificate in respect of such housing project is issued by the local authority;" 19. For claiming deduction under section 80IB(10) of the Act, the assessee is required to fulfill basic requisite conditions that the housing project should have been approved before 1st April 2004 and should have been completed before 31.3.2008. If any of the condition is not fulfilled, the assessee would not be entitled for deduction under section 80IB(10) of the Act. With respect to the approval of the housing project, there is no dispute and admittedly it was granted before 1st April, 2004 by the local authority, but with regard to the date of completion of the project, as per provisions of section 80IB(10) of the Act and its Explanation, it was to be completed before 31.3.2008, but the same was in fact completed only on 23.10.2009. 20. During the course of hearing, our attention as invited to the applications dated 14.3.2008 and 27.3.2008 appearing at pages 23 and 25 of the compilation of the assessee, with the submission that on 14.3.2008 an application was filed for seeking permission for compounding with regard to the additional construction and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority i.e. 23.10.2009. Since the housing project was completed after 31.3.2008, the assessee has not fulfilled the second requisite condition for claiming deduction under section 80IB(10) of the Act and therefore the assessee is not entitled for deduction under section 80IB(10) of the Act." 10. We have also examined the provisions of section 15 and 15-A of the U.P. Urban Planning and Development Act, 1976 and we find that for obtaining a completion certificate, every person or body having been granted permission under sub section (3) of section 15 shall complete the developments according to the approved plan and send a notice in writing of such completion to the authority and obtain completion certificate from the authority in the manner prescribed or provided in the bylaws of the authority, meaning thereby once the project is completed, the developer is required to send a notice to the Local Authority for obtaining completion certificate. The notice in writing of such completion to the Authority is required to be moved in a particular format along with certain requisite documents. But in the instant case, the Tribunal has also examined the applications moved by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titled to deduction of profits in the case of housing projects approved before March 31,2005, by the local authority. The only condition in clause (a), at the relevant time, was that the development and construction of the housing project had commenced or commences on or after October 1,1998. This stipulation has been modified by amendment to clause (a). According to the amended clause (a), the housing project approved before March 31, 2007 by a local authority would receive the benefit of deduction provided the development and construction of the housing project has commenced or commences on or after October 1, 1998, and is completed within a specified time. Housing projects approved by the local authority before April 1,2004 must be completed before March 31,2008 and the housing project approved on or after April 1, 2004 but before March 31,2007, should be completed within four years from the end of the financial year in which the housing project was approved by the local authority. The amendment further postulates that the "date of completion of construction" of the housing project shall be reckoned on the basis of "the date on which" the completion certificate in respect of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) thereunder. The Supreme Court decisions in the case of Veena Developers and Sarkar Builders will have to be understood only in the context of a new condition stipulated regarding the built-up area of the project by way of amendment, which the assessee could not have complied with at all, and even though the construction of the housing project was otherwise in full compliance with all conditions set out in the approval given by the municipal authority as per the relevant rules in that behalf. The Assessing Officer disallowed the claim of the assessee under section 80-IB(10) on the finding that in spite of repeated opportunity given to the assessee during the course of assessment proceedings, the completion certificate was not produced before March 31,2008. Further, a letter was issued by the municipal corporation dated December 18, 2008, pursuant to the enquiry made in that behalf stating that completion certificate had not been issued to the assessee till that date and that the application of the assessee was still being processed. On these facts the Assessing Officer proceeded to complete the assessment proceedings and disallowed the deduction claimed by the assessee for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thing which is impossibly to achieve. (ii) That considering the prodigious benefit offered in terms of section 80-IB to, the assessee (hundred per cent, of the profits derived in any previous year relevant to>any assessment year) and the purpose underlying it-which is, inter aim, a burden on the public exchequer due to waiver of commensurate revenue-the stipulation fop obtaining completion certificate from the local authority before the cut-off date:, must be construed as mandatory. The fact that compliance with that condition is dependent on the manner in which the proposal is processed by the local authority, the provision cannot be construed as a directory requirement. It is a substantive provision mandating issuance or grant of completion certificate by the local authority before the cut-off date or specified time, as a pre-condition to get the benefit of tax deduction. Else, it will then be open to the assessee to rely on other circumstances or evidence to plead that the, housing, project is complete-requiring enquiry into those matters by the tax authorities- sans a completion certificate issued by the local authority in that behalf. A priori, the argument of substantial c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not directory, in view of 'the express provision in section 80-IB(10)(a) read with Explanation (ii) thereunder. The completion certificate granted by the local authority must bear the date of having been issued before the cut-off date. (iv) That the provision in the form of section 80-IB(10)(a), applies uniformly to all assessees whether following the work-in-progress. accounting method or otherwise. The benefit of deduction under this provision can be availed of by the assessee following the work-in-progress accounting method, provided he has complied with the stipulation of having produced the completion certificate issued by the local authority before the cut-off date, as may be applicable in his case. In other words, if the housing project was approved by the local authority before April 1, 2004, he must submit the completion certificate issued by the authority having been issued before March 31, 2008. Whereas, in the case of a housing project approved on or after April 1, 2004, the assesses can avail of the benefit provided the completion certificate issued by the local authority is within four years from the end of the financial year in which the concerned housing pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any other specific evidence to establish that the project was completed before 31.3.2011, it is not possible for us to hold that the project was completed within the prescribed period, more so in the light of the fact that the completion certificate was issued on 26.9.2011 and also in the light of the judgment of the Hon'ble M.P. High court in the case of CIT vs. Global Reality (supra), according to which the date of issuance of completion certificate is the date of completion of the project. In the light of these facts, we are of the view that the assessee is not entitled for deduction under section 80IB(10) of the Act in respect of Fortuna Reviera Blues Housing Project also. 17. We, therefore, find ourselves in agreement with the order of the ld. CIT(A) and we confirm the same. 18. The other ground raised in this appeal is with regard to the selection of this case under CASS. This issue was examined by us in the case of U.P. State Industrial Development Corporation Ltd. (UPSIDC), Kanpur vs. Dy. CIT-6, Kanpur in ITA No.448/LKW/2012, in which it was held as under:- "5. We have considered the rival submissions. We do not find any force in this contention of Learned A.R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Sunderlal (Late) (supra). In this case, the dispute before Hon'ble Allahabad High Court was that as to whether CIT should give reasons for passing order of revision. In that case, the facts were that the CIT had authorized for filing of appeal against the order of AAC for assessment year 1960-61 and thereafter, he initiated revision proceedings u/s 33B of Indian Income Tax Act, 1922 relying solely on the order of AAC. It was held in that case that having authorized to file the appeal against the order of AAC for the same assessment year, it cannot be accepted that the CIT was having reasons that the order of the Assessing Officer is erroneous and prejudicial to the interest of the Revenue because if that would have been the case, the CIT could not have authorized the Assessing Officer to file an appeal against the order of the AAC. Hence, it is noted in that case that the materials were on record to establish that the order of revision passed by CIT was without reasons whereas in the present case, the only objection is that since the selection for scrutiny was made by the Assessing Officer with the help of the computer and therefore, there is no application of mind. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d pass order for rectification ignoring the decision of the Commissioner and the further letters of the CBDT and the Govt. of India which must not influence his determination. There is no quarrel on this aspect but in the present case, there is no such dispute that the decision of the Assessing Officer is on the direction of any other authority. This judgment is also not rendering any help to the assessee in the present case. 5.6 The next judgment cited by Learned A.R. of the assessee is the judgment of Hon'ble Gujarat High Court rendered in the case of Gujarat Gas Co. Ltd. (supra). In this case, it was held that the proceedings before the Assessing Officer are judicial proceedings and therefore, all the incidents of such judicial proceedings have to be observed before the result is arrived at. In that case, the assessee asked to inspect the relevant records and documents before leading evidence in rebuttal which was denied and it was held that no such direction can be issued by Board u/s 139(1) which should interfere in the judicial function of the Assessing Officer. In the present case, this is not in dispute that any such direction was issued to Assessing Officer for sele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to make tax administration and collection friendly to tax payer, some steps have been taken by the tax administration/Government although much work is still to be done in this regard. Some of these steps are that it is made a rule that tax returns can be filed in a paper less manner in order to improve voluntary compliance by the tax payer and also to reduce the burden of filing voluminous documents along with the tax return. This is a big relief to the tax payer but this has to be ensured that there are some deterring measures so that no undue advantage is taken by any tax payer of this liberal policy of the Government. Even these deterring measures are to be such that they cause minimum harassment to the tax payer. Therefore, scheme had been devised that only very small percentage of total tax returns will be scrutinized by the department and generally it is about 2% to 3% of the total tax returns filed in a year. When it is seen that the return is to be filed by the assessee in paperless manner and still there has to be some deterring measure to prohibit the taxpayer from adopting the habit of tax evasion/avoidance, it was decided that there should be scrutiny in a small numbe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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