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TMI Blog2024 (3) TMI 1154X X X X Extracts X X X X X X X X Extracts X X X X ..... d Municipal Corporation on plot bearing survey No 185 Hissa No 185/4B, 185/5, 185/68. During the year project was under construction. The assessee follows WIP method of account and has declared estimated profit every year. The assessee has shown net profit Rs, 7,74,122+ and the same has been claimed as deduction u/s. 80IB(10) of the Act. On going through the records it is observed that the first commencement certificate for this project was granted by Pimpri Chinchwad Municipal Corporation on 21/05/2004, The explanation to the provisions of section 80IB(10) of the I. T. Act, read as under: (ii) in a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building pins of such housing project is first approved by the Local authority; (iii) the date of completion of construction of the housing project shall be takes to be the date on which the completion certificate in respect of such is issued by the local authority. Considering the facts of the case it is seen that the project under consideration was commenced on the basis of first commencement certificate, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up for consideration before this Tribunal and the Tribunal for AY. 2006-07 and AY 2007-08 (ITA No 7751/Mum/2014 & ITA. No 7752/Mum/2014) and for AY 2008-09 (ITA No 7763/Mum/2014). And he drew our attention to the order of Tribunal dated 02.02.2018 for AY 2008-09 and AY 2007-08; for AY 2007-08, wherein the Tribunal held on the legal issue as under: - "6. We have considered the rival submissions and perused the material on record in the light of the decisions relied upon. As far as the factual aspect of the issue is concerned, undisputedly assessment in case of the assessee for the impugned assessment year was originally completed u/s. 143(3) of the Act on 23.12.2009. It is also a fact on record that the notice u/s. 148 of the Act was issued by the Assessing Officer on 17.09.2012. Therefore, there is no doubt that the notice u/s. 148 of the Act was issued after the expiry of four years from the end of the relevant assessment year. Section 151(1) of the Act postulates sanction by prescribed authority for issuance of notice u/s. 148 of the Act by the Assessing Officer. As per the proviso to section 151(1) of the Act as existed during the relevant assessment year, in case of an assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to the decision of the Tribunal on the legal issue for AY. 2008-09 wherein the Tribunal has decided the legal issue as under: - "13. We have considered rival submissions and perused materials on record. We have also examined the case laws cited before us. Undisputedly, in the present case, assessment in case of the assessee was originally completed after scrutiny under section 143(3) of the Act vide order dated 30th December 2010. Though, the re-opening of assessment under section 147 of the Act for the impugned assessment year is before the expiry of four years from the relevant assessment year, however, the validity of the reopening of assessment has to be one tested keeping in view the following factors. Firstly, whether the issue on which the assessment was re-opened as per the reasons recorded was examined at the time of original assessment; secondly, whether the formation of belief that income has escaped assessment has a live link with the materials on record and thirdly, whether the re-opening of assessment under section 147 of the Act is on the basis of some tangible material. Before proceeding further On the issue, it is necessary to look into the reasons for re-ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... original assessment under section 143(3) of the Act has examined the Issue relating to assessee's claim of deduction under section 80IB(10) of the Act relating to housing project. Notably, the assessee in the return of income filed for the impugned assessment year has Claimed deduction under section 80IB(10) of the Act and as required under the statute has also furnished an audit report in form no. 10CCB in support of the deduction claimed. In course of the original/assessment proceedings, the Assessing Officer when wanted to examine the eligibility of the assessee's claim under section 80IB(10) of the Act, the assessee vide letter dated 25th November 2010, has submitted its reply not only answering the queries raised by the Assessing Officer but has also furnished all supporting documentary evidences in support of the claim of deduction. The Assessing Officer while completing the assessment under section 143(3) of the Act on 30th December 2010, allowed assessee's claim of deduction under section 80IB(10) in respect of the housing project after examining the documentary evidences as well as being satisfied with the fact that the assessee has fulfilled the conditions for claiming de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e time of original assessment the Assessing Officer formed the belief that income chargeable to tax has escaped assessment as the assessee was not eligible to avail deduction under section 80IB(10) due to non-completion of the housing project before 31st March 2009. Even, letter dated 17th October 2013 issued by the Assessing Officer during the re-assessment proceedings (paragraph-3), a copy of which is at Page-32 of the paper book, clearly demonstrates that only on re-examining the documents submitted by the assessee in course of original assessment proceedings in support of deduction claimed under section 80IB(10), he has formed a belief that the assessee was not eligible to claim such deduction as the housing project was not completed before 31s March 2009. Thus, the aforesaid facts available on record clearly establish that there was no tangible material available before the Assessing Officer at the time of recording reasons for reopening the assessment that income chargeable to tax has either escaped assessment or has been under assessed. It is evident, on re-examination of the very same material considered by the Assessing Officer while allowing assessee's claim of deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raisal of the material available at the time of original assessment the Assessing Officer has re- opened the assessment under section 147 of the Act by forming a belief that the assessee is not eligible to claim deduction under section 80IB(10) of the Act due to non-completion of the project within the stipulated time. Thus, consideration of facts and material on record in the light of well settled legal principle leads to the irresistible conclusion that the Assessing Officer has re-opened the assessment on a mere change of opinion without having in his possession any tangible material. Therefore, it amounts to review of the original assessment order passed in case of the assessee, hence, is legally impermissible. Therefore, we are of the considered opinion that re-opening assessment under section 147 of the Act in the instant case is not valid; consequently, the impugned assessment order passed in pursuance thereto is also invalid and has to be quashed. Accordingly, we do so." 6. We note that the "Reasons Recorded" by AO for the earlier AY. 2008-09 has been recorded by the Tribunal at para no. 13 (supra), which we find to be pari-materia with that of the year under consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on fulfilment of certain pre-conditions one of which is, such re-assessment cannot be on the basis of a mere change of opinion. The Hon'ble Court held, even after 1st April 1989, the AO has power to re-open provided there is tangible material to come to the conclusion that there is escapement of income from assessment. And the reasons must have a live link with the formation of belief. And when we apply the aforesaid ratio laid down by the Hon'ble Supreme Court to the facts of the present case, it is seen that the AO while completing the original assessment has examined all facts and materials relating to assessee's claim of deduction under section 80IB(10) of the Act in respect of the housing project and has allowed assessee's claim of deduction and it cannot be said that there was no application of mind of AO. While re-opening the assessment, the AO had no tangible material to come to the conclusion that there is escapement of income. In the present case, AO only on re-appraisal of the material available at the time of original assessment has re- opened the assessment under section 147 of the Act by forming a belief that the assessee is not eligible to claim deduction un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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