TMI Blog2021 (9) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... given a certificate that housing project has been completed on a certain dates, Revenue authorities cannot deny the deduction u/s. 80IB(10) of the Act alleging that the housing project is not complete. In case they are not satisfied with the contents of the completion certificate issued by Bhopal Municipal Corporation, they have option to file a writ before the Hon'ble Jurisdictional High Court but certainly they cannot deny the claim of deduction u/s. 80IB(10) of the Act which the assessee has claimed after obtaining all necessary certificate as well as the certificate from the Chartered Accountant and having fulfilled all the requirements of the provisions of section 80IB(10). AO has conducted sufficient enquiry, called for all necessary details and made proper application of mind and thus it can be safely concluded that the order u/s. 143(3) dated 31.03.2014 is neither erroneous nor prejudicial to the interest of revenue. - Decided in favour of assessee. - ITA No. 975/Ind/2019 - - - Dated:- 16-8-2021 - Rajpal Yadav, Vice President And Manish Borad, Member (A) For the Appellant : Girish Agrawal and Nisha Lahoti, ARs For the Respondents : Harshit Bari, Sr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tunity by Ld. Pr. CIT decided to set aside the order u/s. 263 of the Act dated 14.03.2016 and directed the Ld. Pr. CIT to decide case afresh after providing sufficient opportunity to the assessee. 5. In compliance to the order of this tribunal dated 20.09.2019 Ld. Pr. CIT again carried out the proceedings u/s. 263 of the Act. Details were called from the assessee to which it was submitted that the details already filed on 11.03.2016 and submissions dated 12.12.2016 may be considered. However, Ld. Pr. CIT was of the view that Ld. AO has allowed the deduction u/s. 80IB(10) of the Act merely by obtaining the completion certificate but without conducting necessary enquiry regarding completion of housing project. Accordingly Ld. Pr. CIT after placing reliance on certain judicial precedents held that the assessment order u/s. 143(3) dated 31.03.2014 passed by the Ld. AO for A.Y. 2007-08 is set aside and directed to Ld. AO to make it de novo, after proper examination enquiry and verification of all aspects and giving reasonable opportunity to the assessee of being heard. 6. Aggrieved assessee is now in appeal before this Tribunal raising following grounds: 1. That on the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 14.03.2016. Against this order, assessee preferred an appeal before the Hon'ble Bench vide ITA No. 475/Ind/2016. Hon'ble Bench set aside the matter to the file of Ld. Pr. CIT directing to decide the matter after providing sufficient opportunity to the assessee vide its order pronounced on 26.10.201B. [PB 35-40, 55-65] 5. Pursuant to the direction of the Hon'ble Bench of I TAT, order u/s. 263 was passed by Ld. Pr. CIT on 20.09.2019. Against this order of Ld. Pr. CIT, the assessee is before your Honours. 6. It is submitted that in the set-aside assessment proceedings, Ld. AD verified the letter dated 29.03.2014 wherein it is specifically mentioned that the entire project was completed by the assessee within the stipulated time period. [PB 71] 7. In the letter dated 29.03.2014, it is also mentioned that a completion certificate has already been issued vide letter no. 275 dated 12.11.2009 by this office. This completion certificate was also placed on record before the Ld. AD. The letter further mentions that in February 200B a letter was also issued on the basis of physical verification of the property, copy of which was also placed on record before Ld. AD. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. Explanation 1.-For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,- (a) an order passed on or before or after the 1st day of June, 1988 by the Assessing Officer shall include- (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income-tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General or Principal Commissioner or Commissioner authorised by the Board in this behalf under section 120; (b) record shall include and shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first place, the learned Commissioner may call for and examine the records of any proceedings under this Act. For calling of the record and examination, the learned Commissioner was not required to show any reason. It is a part of his administrative control to call for the records and examine them. The second feature would come when he will judge an order passed by an Assessing Officer on culmination of any proceedings or during the pendency of those proceedings. On an analysis of the record and of the order passed by the Assessing Officer, he formed an opinion that such an order is erroneous in so far as it is prejudicial to the interests of the Revenue. By this stage the learned Commissioner was not required the assistance of the assessee. Thereafter the third stage would come. The learned Commissioner would issue a show-cause notice pointing out the reasons for the formation of his belief that action under section 263 is required on a particular order of the Assessing Officer. At this stage the opportunity to the assessee would be given. The learned Commissioner has to conduct an inquiry as he may deem fit. After hearing the assessee, he will pass the order. This is the fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2000 - HEAD NOTE - Section 263 of the Income-tax Act, 1961 - Revision - Of orders prejudicial to interests of revenue - Assessment year 1983-84 -Whether in order to invoke section 263 Assessing Officer's order must be erroneous and also prejudicial to revenue and if one of them is absent, i.e., if order of Income-tax Officer is erroneous but is not prejudicial to revenue or if it is not erroneous but is prejudicial to revenue, recourse cannot be had to section 263(1) - Held, yes - Whether if due to an erroneous order of ITO, revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to interests of revenue - Held, yes - Assessee-company entered into agreement for sale of estate of rubber plantation - As purchaser could not pay installments as scheduled in agreement, extension of time for payment of installments was given on condition of vendee paying damages for loss of agricultural income and assessee passed resolution to that effect - Assessee showed this receipt as agricultural income - Resolution passed by assessee was not placed before Assessing Officer - Assessing Officer accepted entry in statement of account filed by assessee and accepted sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Commissioner of Income-tax taken under section 263. The Income-tax Appellate Tribunal in the case of Mrs. Khaiiza S. Oomerbhoy v. ITO [2006] 101 TIJ 1095 (Mum), analysed in detail various authoritative pronouncements including the decision of the hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83 (SC) and has propounded the following broader principle to judge the action of the Commissioner of Income-tax taken under section 263. (i) The Commissioner of Income-tax must record satisfaction that the order of the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. Both the conditions must be fulfilled. (ii) Section 263 cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer and it was only when an order is erroneous that the section will be attracted. (iii) An incorrect assumption of facts or an incorrect application of law will suffice the requirement of order being erroneous. (iv) If the order is passed without application of mind, such order will fall under the category of erroneous order. (v) Every loss of revenue cannot be treated a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act for ₹ 1,11,55,537/-. In the course of assessment u/s. 143(3) of the Act, the AO declined the claim of deduction u/s. 80IB(10) of the Act which was further confirmed by the learned CIT(A) and the assessee is in further appeal before us. 3. From record we find that during the year, under consideration, the assessee has undertaken a housing project under the name of Vardhman Green Park at Khasra Nos. 36, 38 and 41, Kitoniya Kachiyan, Gram Sherma Kala, Bhopal. The approval for the project was obtained from the Municipal Corporation on 13.12.2004 and 10.5.2005. The assessee applied for issuance of completion certificate to the Municipal Corporation on 29.11.2007. However, the completion certificate was issued on 6.6.2009. 4. The AO stated that the assessee is merely a contractor and has not developed any housing project. He observed that no registry was made for the construction work done by the assessee firm, there was registry of land only and after completing the construction work as per the agreement, the houses were handed over to the customers. Thus, as per the AO, no project, as a whole, was completed by the assessee firm. The AO also observed that the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not eligible for claim of deduction u/s. 80IB(10) of the Act in terms of Explanation so inserted. We have carefully gone through the decision in the case of B.D. Patil Sons (supra), the facts of which are entirely different wherein the claim was made for deduction u/s. 80-IA in respect of development, maintenance and operation of infra-structure facilities. However, in the instant case before us, the claim of the assessee u/s. 80IB(10) is with respect to the housing project and not for any infrastructure facility. Accordingly, the proposition laid down therein cannot be applied to the assessee's case. There is no dispute to the well settled proposition to the effect that the claim of deduction under section 80IB(10) of the Act is only available to the developers and not to the contractors, meaning thereby that in addition to the construction of the houses, the assessee is also required to undertake development of infrastructure facilities like severages, electricity, roads, etc. Thus, mere construction of the houses does not come under the purview of the definition of 'developer'. In the instant case, it is not clear as to what infrastructure facilities have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued. The assessee has also placed this letter along with synopsis which has been obtained under RTI Act from the office of the Municipal Corporation, Bhopal. The issue with regard to the date on which completion certificate is required to be issued has been dealt with by the coordinate Bench of the Tribunal vide its order dated 6.12.2010 in the case of D.K. Construction, ITA No. 243/Ind/2010 30.11.2011, wherein following was the precise observation of the Bench:- 7. We have considered the rival contentions, carefully gone through the orders of the authorities below and relevant material placed on record towards which our attention was invited during the course of hearing by the ld. Authorized Representative and the ld. Senior D.R. Provisions of Section 80IB allows claim for deduction in respect of housing project, which has been approved prior to 1.4.2004 and also completed before 31.3.2008. During the course of assessment with regard to assessee's claim of deduction u/s. 80IB in respect of its D.K. Honey Homes Project, the AO has asked the assessee to furnish the certificate of completion of this project M/s. D.K. Honey Homes. The AO also directly called information f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date of completion of the project. The AO is to decide the issue afresh as per law after considering the letter of completion if any furnished by the assessee. We direct accordingly. 9. In the result, the appeal of the assessee is allowed for statistical purposes. 8. In view of the above, we restore the matter to the file of the AO for deciding the same afresh in terms of our above decision after giving due opportunity of being heard to the assessee 18. We further observe that Ld. AO commenced the assessment proceedings afresh on the direction of this Tribunal and issued a notice u/s. 143(2) of the Act dated 20.01.2014 along with query letter calling for various details and documents in order to verify the deduction u/s. 80IB(10) of the Act. Relevant details were filed and all the evidences were examined. This fact is discernable from para 1.3 of the assessment order dated 31.03.2014 wherein Ld. AO has made following observation: 1.3 The case was transferred to this office by the order of the Hon'ble Commissioner of Income Tax Bhopal u/s. 127(1) of the Income Tax Act, 1961 dated 29.03.2014. A notice u/s. 143(2) was issued on 29.03.2014 itself fixing the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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