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2016 (4) TMI 121 - ITAT PUNE

2016 (4) TMI 121 - ITAT PUNE - TMI - Penalty under section 271(1)(c) - assessee claimed deduction under section 80IB(10) - Held that:- the assessee is entitled to the claim of deduction under section 80IB(10) of the Act on completed portion of building from year to year, if the assessee fulfills the requirement of completing the building by stipulated date i.e. 31.03.2008. Admittedly, in the facts of the present case, the assessee had completed the building before 31.03.2008 and even applied for .....

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erit in the order levying penalty under section 271(1)(c) of the Act in this regard.

The facts in ACIT Vs. M/s. Rohan Engineering Construction (supra) are identical to the facts before us, where the assessee was not able to obtain the completion certificate by the appointed date and the deduction under section 80IB(10) of the Act was denied and it was held by the Tribunal that the assessee is not liable for levy of penalty under section 271(1)(c) of the Act. Following the same parity .....

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ent years 2005-06 to 2007-08 against penalty levied under section 271(1)(c) of the Income-tax Act, 1961 (in short the Act ). 2. This bunch of present appeals relating to the same assessee were heard together and are being disposed of by this consolidated order as the issue raised in all these appeals was similar. We proceed to decide the present bunch of appeals by making reference to the facts in ITA No. 420/PN/2014. 3. The assessee in ITA No. 420/PN/2014 has raised the following grounds of app .....

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ed, unjustified & contrary to the provisions of Scheme of the Act. The penalty imposed by the AO be deleted. The appellant be granted just and proper relief in this respect. 2. The appellant prays to be allowed to add, amend, modify, rectify, delete, raise any grounds of appeal at the time of hearing. 4. Briefly, in the facts of the present case, the assessee company was a builder and promoter. During the year under consideration, the assessee had shown profits to the tune of ₹ 3,91,17 .....

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furnished return of income. During the course of assessment proceedings, the Assessing Officer called for various details including copy of sanctioned plan of the project, commencement certificate and completion certificate, etc. On perusal of the documents, the Assessing Officer noted that the layout of the project called Sankalp Nagari was originally approved by the local authority on 27.03.2003, which was revised on 20.05.2004. The project consisted of 13 buildings with total of 206 flats, ou .....

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8, so the assessee was show caused as to why the claim made under section 80IB(10) of the Act should not be disallowed. In reply, the assessee submitted that it had applied for completion certificate within stipulated period i.e. on 29.03.2008. While applying for the same, No Objection Certificates from various departments like drainage NOC, Road NOC and Fire NOC were also enclosed, but till date the completion certificate has not been issued. The Assessing Officer was of the view that where the .....

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penalty proceedings, despite several notices issued and consequently, the Assessing Officer decided the penalty proceedings exparte the assessee and held the assessee to have furnished inaccurate particulars of income within the meaning of section 271(1)(c) of the Act. The Assessing Officer levied penalty of ₹ 1,23,986/- under section 271(1)(c) of the Act. 5. Before the CIT(A), the plea of the assessee was that it had obtained NOC from various departments like drainage NOC, Road NOC, fire .....

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ion 80IB(10) of the Act i.e. commencement certificate, approved layout plan, various NOCs, completion certificate issued by the Architect and filed application with PMC for issue of Completion Certificate, Form No.10CCB of the auditor and all the facts were disclosed by the assessee before the Assessing Officer. The assessee further claimed that it was of the bonafide view that it was entitled to the said claim of deduction under section 80IB(10) of the Act as the condition of completion of hous .....

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of the Act was to be granted to the assessee. However, under a mistaken belief, no appeal was filed against the order of Assessing Officer in denying the deduction under section 80IB(10) of the Act. However, with regard to levy of penalty, the assessee claimed that there is no merit in levy of penalty under section 271(1)(c) of the Act. Reliance was placed on the following decisions:- a. CIT Vs. Reliance Petro Products Pvt. Ltd., reported in 322 ITR 158 (SC) b. Hindustan Steel Vs. State of Oriss .....

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ance (No.2) Act, 2004 effective from 01.04.2005 and though the commencement certificate was obtained on 27.03.2003 when there was no requirement to furnish the completion certificate, but because of the amendment, the said completion certificate had to be filed on or before 31.03.2008. In view of the amendment being brought in w.e.f. 01.04.2005, the CIT(A) held that there was no merit in levy of penalty for assessment year 2004-05 as the said year was completed before the amendment was brought i .....

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tion certificate from the local authority on 29.03.2008, but where the local authority had not issued the certificate till date of the assessment order, it was a fit case for levy of penalty under section 271(1)(c) of the Act, where the assessee had furnished inaccurate particulars of income. The CIT(A) also observed that this was not a case where the delay in obtaining the completion certificate was due to reasons beyond the control of the assessee and in view thereof, the CIT(A) held that the .....

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(c) of the Act was attracted and the assessee was liable for levy of penalty under section 271(1)(c) of the Act. Accordingly, penalty of ₹ 1,23,986/- was confirmed for assessment year 2005-06, ₹ 1,17,351/- for assessment year 2006-07 and ₹ 5,94,832/- for assessment year 2007-08. 7. The assessee is in appeal against the aforesaid consolidated order of CIT(A) in confirming levy of penalty under section 271(1)(c) of the Act. 8. The learned Authorized Representative for the assesse .....

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that in the said audit report, the date of completion of housing project was shown as under construction. He further pointed out that the size of the plot was 6991.51 sq. mtrs. and the built up area of each of the residential unit of the project was about 510 sq. ft. Similar declaration was made in Form No.10CCB in all the respective assessment years under appeal. Thereafter, the assessee on 29.03.2008 filed an application for issue of completion certificate, which fact has been noted by the Ass .....

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eduction under section 80IB(10) of the Act on proportionate basis in respect of completed units, though the addition has been confirmed in the hands of assessee, there was no merit in levy of penalty for concealment of income under section 271(1)(c) of the Act. The learned Authorized Representative for the assessee pointed out that the CIT(A) himself had dropped the penalty proceedings for assessment year 2004-05, however, had confirmed levy of penalty for other three respective years. Reference .....

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the Act has been denied to the assessee, there is no merit in levy of penalty as held by Pune Bench of Tribunal in ACIT Vs. M/s. Rohan Engineering Construction in ITA No.867/PN/2011, relating to assessment year 2006 -07 order dated 19.10.2012. 9. The learned Departmental Representative for the Revenue pointed out that under the Income-tax Act, deduction is allowable if the assessee fulfils the conditions laid down in the Act. However, pursuant to Survey under section 133A of the Act conducted a .....

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r section 80IB(10) of the Act. He further relied on the order of CIT(A) with special reference to para 4.3.1 at page 7 of the appellate order. 10. We have heard the rival contentions and perused the record. The issue arising in the present bunch of appeals is in relation to levy of penalty for concealment of income under section 271(1)(c) of the Act. The aforesaid penalty for concealment is leviable where the assessee has either concealed the particulars of income or furnished inaccurate particu .....

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) of the Act, there was no requirement to complete the project within a time frame. The assessee thereafter, for the years ending 31.03.2004 to 31.03.2007 had claimed the said deduction under section 80IB(10) of the Act on such portion of buildings which were completed by it from year to year. Admittedly, the buildings were under construction for all these years. In the original return of income filed for assessment years 2004- 05 to 2007-08, the assessee had claimed the deduction under section .....

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on certificate by the PMC on 29.03.2008. Before obtaining the completion certificate from the PMC, the requirement was to obtain No Objection Certificates from various departments, which were duly complied with by the assessee and also completion certificate was issued by the Architect certifying that the construction of building was completed. There are two aspects to the issue i.e. while filing the return of income for assessment years 2005-06 to 2007-08, the assessee could not presume or come .....

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essee was held to have fulfilled all the conditions and the return of income filed by the assessee was processed under section 143(1) of the Act and the claim of the assessee was allowed. However, pursuant to Survey conducted at the premises of the assessee under section 133A of the Act on 22.07.2008 , the Assessing Officer noted that the assessee had not received any completion certificate for the said project and hence, the re-assessment proceedings were initiated against the assessee. In the .....

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n under section 80IB(10) of the Act on completed portion of building from year to year, if the assessee fulfills the requirement of completing the building by stipulated date i.e. 31.03.2008. Admittedly, in the facts of the present case, the assessee had completed the building before 31.03.2008 and even applied for completion certificate on 29.03.2008 after receiving the requisite No Objection Certificates from various departments and also the completion certificate issued by the Architect. In t .....

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