Abhilash Synergetic Constructions & Exports Private Limited, Visakhapatnam V. The Income Tax Officer, Ward-1(5), Visakhapatnam

ITA 108/VIZ/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8155 (ITAT-VISAKHAPATNAM)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 11-03-2019
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109 / VIZ /201 9 (ASST. YEAR: 20 07 - 0 8, 2009 - 10 & 20 12 - 1 3 ) ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD., D.NO. 9 - 29 - 14, BALAJI NAGAR, SIRIPURAM, VISAKHAPATNAM. V S . A CIT, CIRCLE - 5 (1), VISAKHAPATNAM. PAN NO. AAFCA 9530 M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI C. SUBRAHMANYAM, FCA . DEPARTMENT BY : SMT. SUMAN MALIK , SR. DR DATE OF HEARING : 04 / 0 7 /201 9 . DATE OF PRONOUNCEMENT : 19 / 0 7 /201 9 . O R D E R PER D.S. SUNDER SINGH , ACCOUNTANT MEMBER ITA NO. 104/VIZ/2018 FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 , GUNTUR , DATED 01 /0 2 /201 8 FOR A.Y. 2007 - 08 . ITA NOS. 108 & 109/VIZ/2019 FILED BY THE ASSESSEE IS DIRECTED AGAINST THE SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS) - 6, HYDERABAD , DATED 12/12/2018 & 28/12/2018 FOR THE A . Y . 2009 - 10 & 2012 - 13 . SINCE FACTS AND ISSUES ARE COMMON, 2 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) CLUBBED AND HEARD TOGETHER AND DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER . ITA NO. 104/VIZ/2018 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORDERS PASSED U/S.143(3) R.W.S 147 OF THE I.T.ACT IS AGAINST THE PROVISIONS OF LAW AND FACTS OF THE CASE. 2. THE LEARNED CIT(A) ERRED IN DECIDING THE REASSESSMENT PROCEEDINGS ARE IN ACCORDANCE WITH THE LAW. 3. THE LEARNED CIT(A) ERRED IN NOT ACCEPTING THE LEGAL POSITION THAT NOTICE U/S. 148 OF THE I.T.ACT WHEN IT WAS ISSUED BY DCIT, RANGE 3(1) AND SUBSEQUENTLY WHEN THE JURISDICTION WAS GIV EN TO ACIT, RANGE - 5(1), THE INCUMBENT OFFICER WHO COMPLETED THE ASSESSMENT HAS TO ISSUE NOTICE U/S.148 OF THE I.T.ACT FOR ASSUMING PROPER JURISDICTION TO ASSESS THE ASSESSEE COMPANY. 4. THE LD.CIT(A) OUGHT TO KNOW THAT THE ASSESSMENT WAS ORIGINALLY COMPLET ED U/S.143(3) ACCEPTING CLAIM U/S8OIB OF THE I.T.ACT AND IN THE REASSESSMENT PROCEEDINGS THE CLAIM CANNOT BE REJECTED ON MERE REVIEW OF THE EARLIER DECISION WITHOUT THERE BEING VALID REASON EITHER ON FACTS OR IN LAW TO DISALLOW THE SAME. 5. THE LD.CIT(A) O UGHT TO KNOW THAT WHEN ALL THE CONDITIONS STIPULATED U/S.801B(10) OF THE I.T.ACT HAVE BEEN FULFILLED, THE CLAIM HAS TO BE ALLOWED AND IT CANNOT BE REJECTED FOR MERE TECHNICAL ISSUES, IF ANY. 6. THE LEARNED CIT(A) OUGHT NOT TO HAVE DISALLOWED THE DEDUCTION U/S.801B(10) OF THE IT ACT MERELY CONSIDERING THAT ASSESSEE COULD NOT PRODUCE COMPLETION CERTIFICATE OF THE PROJECT WHEN THE CIT(A) WAS OTHERWISE SATISFIED ABOUT THE COMPLETION OF THE PROJECT. 7. THE LD.CIT(A) COULD NOT TO HAVE FORMED AN ADVERSE BELIEF AND REJECT THE CLAIM OF DEDUCTION U/S.801B OF THE I.T.ACT RELYING ON THE LETTER FILED BEFORE A.O, WHEREIN THERE APPEARS TO BE A MISTAKE OF THE YEAR MENTIONED, WHEN THE EVIDENCES SUBSTANTIATE THAT THE PROJECT WAS COMPLETED IN THE IMPUGNED ASST.YEAR, THIS WAY T HE ASSESSEE WAS ENTITLED FOR THE CLAIM 8. FOR THESE AND OTHER REASONS THAT ARE TO BE URGED AT THE TIME OF HEARING OF THE CASE THE APPELLANT PRAYS THAT THE ORDERS PASSED BY THE LEARNED CIT(A) ARE AGAINST THE 3 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) FACTS OF THE CASE AND PROVISIONS OF LAW AND THEREFORE THE SAME NEEDS TO BE QUASHED IN THE INTEREST OF JUSTICE AND FAIR PLAY. 3 . THE ASSESSEE HAS RAISED TOTAL EIGHT GROUNDS IN THIS APPEAL . DURING THE APPEAL HEARING, THE LD.A.R DID NOT PRESS GROUND NOS. 1 TO 4 & 7 , THEREFORE, SAME ARE DISMISSED AS NOT PRESSED. IN EFFECT , THE ASSESSEE HAS PRESSED ONLY GROUND NOS. 5 & 6 WHICH ARE RELATED TO THE DEDUCTION U/SEC. 80IB OF THE INCOME TAX ACT, 1961 . 4 . IN THIS CASE, THE ASSESSEE HAS FIELD FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 23,61,460/ - AND CLAIMED ENTIRE AMOUNT AS DEDUCTION U/SEC. 80IB(10) AND COMPUTED THE TAXABLE INCOME AT NIL. ORIGINAL L Y, T HE ASSESS MENT WAS COMPLETED U/SEC. 143(3) BY ORDER DATED 26/11/2009 ACCEPTING THE INCOME RETURNED. SUBSEQUENTLY , A SURVEY U/SEC. 133A WAS CONDUCTED IN THE CASE OF ASSESSEE ON 24/10/2011 AND IT H AS COME TO THE NOTICE OF THE DEPARTMENT THAT THE ASSESSEE DID NOT FILE THE RETURNS OF INCOME FOR THE A.YS. 2008 - 09 ONWARDS I.E. SUBSEQUENT YEARS OF CLAIMING THE DEDUCTION U/SEC. 80IB (10) . THE ASSESSING OF FICER FOUND FROM THE ASSESSMENT RECORDS THAT THE ASSESSEE HA S CLAIMED DEDUCTION THE 80IB(10) DURING PROGRESSION OF THE PROJECT IN THE A.Y.2007 - 08 THOUGH THE PROJECT WAS NOT COMPL ETED . S INCE , CONSTRUCTION WAS UNDER PROGRESS , THE ASSESSEE CLAIMED DEDUCTION ON THE BASIS OF 4 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) CBDT INSTRUCTION NO. 4/2009, DATED 30/06/2009 , A S PER WHICH, THE DEDUCTION IS PERMISSIBLE ON YEAR TO YEAR BASIS WHERE THE ASSESSEE IS SHOWING PROFIT FROM PERCENTAGE COMPLETION OF THE PROJECT OF EVERY YEAR . THE ASSESSEE REQUIRED TO SUBMIT THE COMPLETION CERTIFICATE ON COMPLETION OF THE PROJECT , BUT NOT LATER THAN THE SPECIFIED TIME LIMIT AS PROVIDED IN SECTION 80IB(1 0 ) . AS PER THE CIRCULAR CITED, IF IT IS FOUND SUBSEQUENTLY THAT THE PROJECT WAS NOT COMPLETED WITHIN THE SPECIFIED TIME LIMIT OF 4 YEARS AS SPECIFIED IN SECTION 80IB(10) , THE DEDUCTION GRANTED TO THE ASSESSEE IN THE EARLIER YEARS SHOULD BE WITHDRAWN. IN THE ORIGINAL ASSESSMENT ORDER T HE ASSESSIN G OFFICER HAD ATTACHED NOTE (AS PER PAGE 2 OF THE ASSESSMENT ORDER DATED 25/03/2013) AS UNDER: - HOWEVER, THE CONDITIONS PRESCRIBED FOR ALLOWING DEDUCTION U/S 80IB HAVE TO BE VERIFIED THOROUGH L Y WHILE COMPLETING THE ASSESSMENT FOR THE A.Y. 2009 - 10 (4 TH YEAR FROM COMMENCEMENT OF THE PROJECT) AND IN CASE THE ASSESSEE FAILS TO FURNISH COMPLETION CERTIFICATE OF THE ENTIRE PROJECT, THE DEDUCTION ALLOWED IN THIS YEAR AND ALSO THE DEDUCTION IF ANY ALLOWED DURING THE A.Y. 2006 - 07, 2008 - 09 HAS TO BE DISALLOWED A ND THE ENTIRE INCOME DERIVED FROM THE PROJECT HAS TO BE BROUGHT TO TAX. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE DID NOT FILE THE RETURNS OF INCOME FOR THE A.YS. 2008 - 09 ONWARDS , T HUS, VIOLAT ED THE CONDITIONS OF SECTION 80IB(10). THEREFORE, CASE WAS REOPENED U/SEC.147 BY ISSUING NOTICE U/SEC.148 ON 04/11/2011 AND CALLED 5 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) FOR EXPLANATION OF THE ASSESSEE AS TO WHY THE DEDUCTION CLAIMED U/SEC. 80IB SHOULD NOT BE DISALLOWED. THE ASSESSEE FILED EXPLANATION OBJECTING FOR REOPENING OF ASSESSMENT STATING THE PROJECT WAS COMPLETED WITHIN FOUR YEARS PERIOD AS SPECIFIED IN THE ACT AND AFTER VERIFICATION OF THE FACT OF COMPLETION OF THE PROJECT, THE ASSESSING OFFICER HAD ALLOWED THE DEDUCTION U/SEC. 80IB IN THE ORI GINAL ASSESSMENT, THUS , OBJECTED FOR REOPENING OF THE ASSESSMENT WHICH WAS REJECTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER EXAMINED THE EXPLANATION FURNISHED BY THE ASSESSEE DURING THE ORIGINAL ASSESSMENT PROCEEDINGS AND FOUND THAT THE ASSESSEE EX PLAINED BEFORE THE ASSESSING OFFICER AT THE TIME OF ORIGINAL ASSESSMENT THAT IT WAS FOLLOWING PERCENTAGE OF COMPLETION METHOD AND CLAIMED THE DEDUCTION REL YING ON THE CBDT INSTRUCTION N O . 04/ 2009 DATED 30/06/2009 . ACCORDINGLY THE AO ALLOWED THE DEDUCTION IN THE ORIGINAL ASSESSMENT U /SEC. 80IB(10) . SUBSEQUENTLY THE ASSESSEE NEITHER FILED THE RETURNS OF INCOME NOR THE COMPLETION CERTIFICATE, HENCE THE ASSESSING OFFICER REOPENED THE ASSESSMENT. DURING THE REASSESSMENT PROCEEDINGS ALSO THE ASSESSEE DID NOT FILE THE COMPLETION CERTIFICATE HENCE THE AO HELD THAT THE ASSESSEE HAD VIOLATED THE CONDITIONS SPECIFIED 6 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) U/S . 80IB(10) AND ACCORDINGLY WITHDRAWN THE DEDUCTION ALLOWED U/S 80IB AND ASSESSED THE TOTAL INCOME AT RS. 23,61,460/ - . 5. AGAINST THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE WENT ON APPEAL BEFORE THE LD. CIT(A) AND THE LD. CIT(A) WHILE DISMISSING THE APPEAL CONSIDERED THE ISSUE IN DETAIL AND RELIED ON THE DECISIONS OF THE ITAT, HYDERABAD BENCH IN THE CASE OF KURA HOMES (P) LTD., (26 TAXMA NN.COM 150) AND KEERTHI ESTATES (P) LTD. (26 TAXMANN.COM 259) AND HELD THAT COMPLETION CERTIFICATE NEED NOT BE INSISTED IN EACH YEAR , BUT IT IS MANDATORY WITHIN THE FOUR YEARS OR ON THE COMPLETION OF THE PROJECT . O THERWISE REVENUE IS ENTIT L ED TO WITHDRAW THE DEDUCTION GRANTED EARLIER. THE LD. CIT(A) ALSO CONSIDERED THE DECISION OF ITAT, HYDERABAD BENCH IN THE CASE OF SIGMA CONSTRUCTIONS (33 TAXMANN.COM 523) AND ALSO THE CASE OF VERTEX HOMES (P) LTD., (62 TAXMANN.COM 285) WHEREIN IT W AS HELD THAT COMPLETION CERTIFICATE FROM LOCAL AUTHORITY IS MUST AND FAILURE OF WHICH SHOULD LEAD TO WITHDRAWAL OF DEDUCTION GRANTED EARLIER. THE HON'BLE HIGH COURT OF MADHYA PRADESH IN THE CASE OF GLOBAL REALITY (62 TAXMANN.COM 204) HAS CONSIDERED THE NORMS OF C OMPLETION CERTIFICATE AND HELD TH A T FURNISHING THE COMPLETION CERTIFICATE IS MANDATORY . THE LD. CIT(A) REPRODUCED THE RELEVANT PARTS OF THE ORDER IN HIS ORDER AND ACCORDINGLY HELD THAT 7 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) COMPLETION CERTIFICATE IS MUST AND THE ASSESSEE WOULD ENTITLE FOR DEDUCTION U/SEC. 80IB(10) ONLY ON SUBMISSION OF THE COMPLETION CERTIFICATE ONCE THE PROJECT IS COMPLETED . 6 . AGAINST THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 7 . DURING THE APPEAL HEARING , LD.AR ARGUED THAT THE LD. CIT(A) DECIDED THE APPEAL AGAINST THE ASSESSEE FOR NON - SUBMISSION OF COMPLETION CERTIFICATE . THE ASSESSEE HAS APPLIED FOR COMPLETION CERTIFICATE VIDE ORDER DATED 25/11/22008 BEFORE THE COMMISSIONER, GVMC , HOWEVER, MUNICIPAL AUTHORITIES DID NO T RESPOND TO THE REQUEST MADE BY THE ASSE SSE E AND DID NOT ISSUE THE COMPLETION CERTIFICATE. AS PER CL A USE ( 21 ) OF MUNICIPAL ADMINISTRATION AND URBAN DEVELOPMENT RULES , OCCUPANCY CERTIFICATE IS MANDATORY BEFORE OCCUP Y ING ANY PERSON TO SUCH BUILDING . SINCE FLATS ARE OCCUPIED BY THE OWNERS OF THE BUILDING, THE BUILDING IS DEEMED TO BE COMPLETED IN ALL RESPECTS . THE LD.AR FURTHER SUBMITTED THAT FOR OBTAINING OCCUPANCY CERTIFICATE, SANCTIONING AUTHORITY SHALL EXA M INE THE NUMBER OF FLOORS CONSTRUCTED E TC. AND THEY ARE IN ACCORDANCE WITH RULES OR NOT? THERE WAS NO PROVISION IN THE MUNICIPAL ADMINISTRATION AND URBAN DEVELOPMENT RULES FOR ISSUING COMPLETION CERTIFICATE OTHER THAN 8 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) OCCUPANCY CERTIFICATE , THEREFORE, MUNICIPAL AUTHORITIES DID NOT RESPOND WHEN A LETTER ADDRESSED TO THEM FOR ISSUE OF COMPLETION CERTIFICATE . LD.AR FURTHER SUBMITTED THAT THE HON'BLE ITAT, VISAKHAPATNAM BENCH IN THE CASE OF M/S. VISHNU BUILDERS VS. ACIT IN ITA NO. 178/VIZ/2011, DATED 27/07/2011 HAS NOTED THAT THERE IS NO PRACTICE O F ISSUING PROJECT COMPLETION CERTIFICATE AND CONSIDERED THE EVIDENCE OF MUNICIPAL TAX ASSESSMENTS FOR DATE OF COMPLETION OF CONSTRUCTION . THE LD.AR HEAVILY PLACED RELIANCE ON THE DECISION OF THE HON'BLE ITAT, VISAKHAPATNAM IN THE CASE OF M/S. VISHNU BUILDERS (SUPRA) . THE LD.AR FURTHER SUBMITTED THAT THERE IS NO RULE TO ISSUE COMPLETION CERTIFICATE IN THE MUNICIPAL ADMINISTRATION AND URBAN DEVELOPMENT RULES AND THE REVENUE CANNOT FORCE THE ASSESSEE TO PRODUCE SUCH CERTIFICATE AND THE ASSESSEE CANNOT BE EXPECTED TO DO SOM E THING WHICH IS IMPOSSIBLE FOR THIS PURPOSE. THE LD.AR RELIED ON THE DECISION OF THE ITAT, KOLKATA BENCH IN THE CASE OF ACIT VS. M/S.ASHIANA AMAR DEVELOPERS IN ITA NO. 1307/KOL/2015 DATED 06/10/2017 . HE ALSO PLACED RELIANCE ON THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. TARNETAR CORPORATION [(2014) 362 ITR 174 (GUJ.)] AND ARGUED THAT THE CONDITION O F STATUTE CAN BE SEEN AS MANDATORY , IF SUBSTANTIAL COMPLIANCE THEREOF IS ESTABLISHED ON 9 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) RECORD . THE LD.AR SUBMITTED THAT GVMC IS NOT ISSUING CERTIFICATES AND SINCE THE ASSESSEE PLACED MUNICIPAL TAX ASSESSMENTS OF FLAT OWNERS , IT MAY BE DEEMED THAT THE PROJECT IS COMPLETED , HENCE, REQUESTED TO ALLOW DEDUCTION U/SEC. 80IB(10) OF THE ACT. 8 . ON THE OTHER HAND, LD. DR STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. 10 . IN THIS CASE, THE ORIGINAL ASSESSMENT WAS COMPLETED ACCEPT ING THE INCOME RETURNED. IN THE ORIGINAL ASSESSMENT , THE ASSESSEE CLAIMED DEDUCTION U/SEC. 80IB(10) OF THE ACT , D URING THE PENDENCY OF THE COMPLETION OF THE PROJECT. SUBSEQUENTLY , A SURVEY WAS CONDUCTED U/SEC. 133A OF THE ACT IN THE CASE OF ASSESSEE AND THE ASSESSING OFFICER FOUND THAT THOUGH THE ASSESSEE HAD CLAIMED DEDUCTION U/SEC. 80IB(10) FOR THE A.Y. 2007 - 08 DURING THE PENDENCY OF THE PROJECT, SUBSEQUENTLY THE ASSESSEE HAS NOT FILED RETURNS OF INCOME , T HUS, VIEWED THAT TH E ASSESSEE HAS NOT COMPLETED THE PROJECT, HENCE, REOPENED THE ASSESSMENT BY ISSUES OF NOTICE U/SEC. 148 OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSEE DID NOT FURNISH THE PROJECT COMPLETION CERTIFICATE AS REQUIRED U/SEC. 80IB(10) OF 10 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) THE ACT. NOW THE ASSESSEE CAME WITH A PROPOSAL THAT THE ASSESSEE HAD APPLIED TO GVMC FOR ISSUE OF PROJECT COMPLETION CERTIFICATE, BUT THE GVMC DID NOT RESPOND TO THE REQUEST MADE BY THE ASSESSEE AND THE ASSESSEE HAS FURNISHED THE COPY OF LETTER IN PAP ER BOOK STATED TO BE SUBMITTED BEFORE THE GVMC , DATED 25/11/2008 WHICH READS AS UNDER: - DT. 25/11/2008 , VISAKHAPATNAM. TO THE COMMISSIONER, GVMC, VISAKHAPATNAM. RESPECTED SIR, SUB: - REQUISITION FOR COMPLETION CERTIFICATE OF APARTMENT BUILDINGS. WE ARE REQUESTING YOU TO ISSUE THE COMPLETION CERTIFICATE OF OUR APARTMENT BUILDINGS LOCATED IN SURVEY NO. 23/1 & 2 AT POTHINA MALLAYYA PALEM, VISAKHAPATNAM OUR ACCOUNTS FINALISATION PURPOSE . SL.NO. NAME OF THE BUILDING S RC NOS. SURVEY NO. 1 ASWINI ARCADE 427/99 23/1 & 2 2 BHAWANA ARCADE 422/99 23/1 & 2 3 AMRITHA ARCADE 160/04 23/1 & 2 4 KEERTHANA ARCADE 160/04 23/1 & 2 THANKING YOU, SIR, YOURS FAITHFULLY , SD/ - 11 . AT THE OUTSET , THERE IS NO EVIDENCE ON THE LETTER TO ESTABLISH THAT THE LETTER WAS SUBMITTED TO THE GVMC . THERE WAS NO RECEI PT STAMP OF GVMC HAVING SUBMITTED THE LETTER TO THE GVMC . FURTHER, 11 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) THE LETTER WAS NOT FOR THE PURPOSE OF CLAIMING DEDUCTION U/S . 80IB(10) AND TO COMPLY WITH THE STATUTORY REQUIREMENTS OF INCOME - TAX ACT U/SEC. 80IB(10) , BUT FOR THE PURPOSE OF FINALIZATION OF THEIR ACCOUNTS . SINCE THERE IS NO EVIDENCE ON RECORD TO SHOW THAT THE ASSESSEE HA D SUBMITTED ALL THE REQUIREMENTS AND CHECK LIST FOR ISSUING THE CERTIFICATE TO THE COMMISSIONER, GVMC T HE SAID LETTER CANNOT BE TAKEN COGNIZANCE AND THE SAME HAS NO RELEVANCE . THE ASSESSEE FILED A COPY OF PLAN APPROVAL OF VISAKHAPATNAM URBAN DEVELOPMENT AUTHORITY ( VUDA ) , DATED 17/11/2005. THIS WA S ISSUED TO M. SRINIVASA RAO AND OTHERS TO M/S. JANASRAVANTHI HOUSING & ESTATES , BUT NOT TO THE ASSESSEE. THE ASSESSEES NAME IS ABHILASH SYNERGETIC CONST RUC TIONS & EXPORTS PVT. LTD. HAVING ISSUED THE PLAN APPROVAL TO M/S. JANASRAVANTHI HOUSING & ESTATES THE ASSESSEE DID NOT CLARIFY THE ROLE OF T HE ASSESSEE IN EXECUTION OF THE PROJECT EITHER IN THE LETTER ADDRESSED TO GVMC OR BEFORE THE TRIBUNAL IN THE HEARING. E VEN IF IT IS PRESUMED THAT THE APPROVAL LETTER DATED 17/11/2005 IS IN RESPECT OF ASSESSEES PROJECT, THERE ARE SEVERAL CONDITIONS IMPOSED BY THE VUDA A S PER THE PLAN APPROVAL WHICH IS PLACED AT PAGE NO.5 OF THE PAPER BOOK . AS PER CAUSE NO.7 OF THE APPROVAL , THE COMPLETED BUILDING SHALL BE ALLOWED TO OCCUPY/USE ONLY AFTER ISSUE OF FIT FOR OCCUPATION 12 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) CERTIFICATE BY THE LOCAL AUTHOR ITY ON THE BASIS OF THE FOLLOWING CONDITIONS: - (A) SUBMISSION OF BUILDING COMPLETION CERTIFICATE ISSUED BY THE ARCHITECT DULY CERTIFYING THAT THE BUILDING IS COMPLETED AS PER THE SANCTIONED PLAN B) STRUCTURAL STABILITY CERTIFICATE ISSUED BY THE STRUCTURAL ENGINEER DULY CERTIFYING THAT THE BUILDING IS STRUCTURALLY SAFE AND THE CONSTRUCTION IS IN ACCORDANCE WITH THE SPECIFIED DESIGNS. C) INSURANCE POLICY FOR THE COMPLETED BUILDING FOR A MINIMUM PERIOD OF 3 YEARS. D) AN EXTRACT OF THE SITE REGISTERS, CONTAININ G INSPECTION REPORTS OF SITE ENGINEER, STRUCTURAL ENGINEER & ARCHITECT. THE ASSESSEE DID NOT PLACE COPY OF BUILDING COMPLETION CERTIFICATE ISSUED BY THE ARCHITECT , STRUCTURAL STABILITY CERTIFICATE ISSUED BY THE STRUCTURAL ENGINEER, INSURANCE POLICY FOR THE COMPLETED BUILDING FOR A MINIMUM PERIOD OF 3 YEARS , WHICH ARE THE CONDITIONS STIPULATED BY THE VUDA FOR ISSUE OF OCCUPANCY CERTIFICATE. APART FROM THE ABOVE, THE ASSESSEE ALSO REQUIRED TO SUBMIT FIRE SAFETY CERTIFICATE FROM THE FIRE DEPARTMENT. UNLESS THE ASSESSEE SATISFIES ALL THE CONDITIONS IMPOSED AT PAGE NO.6 , GVMC NEED NOT ISSUE COMPLETION CERTIFICATE . LETTER DATED 25/11/2008 ANNEXED AT PAGE NO.7 DOES N OT INDICATE HAVING COMPLETED THE PROJECT AS PER THE PLAN ACCORDING TO THE CONDITIONS . COMPLETION CERTIFICATE IS NOT A FORMALITY BUT IT IS MANDATORY. PROJECT COMPLETION CERTIFICATE ONLY SHOWS WHETHER PROJECT IS COMPLETED IN 13 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) ACCORDANCE WITH THE PLAN ISSUED BY THE LOCAL AUTHORITY, WHETHER ALL THE CONDITIONS IMPOSED IN THE SANCTIONED LETTER ARE COMPLETED OR NOT? UNLESS THE ASSESSEE COMPLIES WITH ALL THE CONDITIONS REQUIRED AND FURNISH THE CHECK LIST, WE ARE OF THE VIEW THAT THE LOCAL AUTHORITY NEED NOT ISSUE COMPLETION CERTIFICATE . IN THE INSTANT CASE, THE ASSESSEE HAS NOT EVEN SUBMITTED THE CHECK LIST AND NOT MADE ANY EFFORT TO OBTAIN COMPLETION CERTIFICATE . T HERE IS NO INDICATION OF HAVING COMPLETED THE PROJECT BEFORE THE STIPULATED PERIOD. UNDER THESE CIRCUMSTANCES, WE HOLD THAT THERE IS NO EVIDENCE HAVING COMPLETED THE PROJECT ALSO. THE LD. CIT(A) HELD THAT THE ISSUE OF COMPLETION CERTIFICATE IS MANDATORY BECAUSE OF ALL THE REASONS DISCUSSED ABOVE , WE DO NOT HESITATE TO AGREE WITH THE VIEW OF THE . CIT(A). THE ASSESSEE MUST ESTABLISH THAT THE PROJECT HAS BEEN COMPLETED BY FULFILLING ALL THE TERMS AND CONDITIONS AS PER THE PLAN GIVEN BY THE LOCAL AUTHORITIES. MERE SUBMISSIONS OF TAX RECE I PTS ARE NOT S UFFICIENT AND DO NOT ESTABLISH THE COMPLETION OF PROJECT. THE ASSESSEES SUBMISSION THAT UNLESS OCCUPANCY CERTIFICATE IS ISSUED, THE BUILDING SHALL NOT BE ALLOWED TO USE HAS NO BASIS WITHOUT SUBMISSION OF OCCUPANCY CERTIFICATE BY THE LOCAL AUTHORITIES. THE ASSESSEE MUST APPLY BEFORE THE LOCAL AUTHORITIES ALONG WITH THE OCCUPANCY CERTIFICATE FOR 14 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) ISSUE OF COMPLETION CERTIFICATE . IN THE INSTANT CASE , THE ASSESSEE HAS NOT MADE ANY EFFORTS TO OBTAIN THE CERTIFICATE OF COMPLETION OF THE PROJECT FROM THE LOCA L AUTHORITIES. THE ASSESSEE ALSO DID NOT PRODUCE ANY EVIDENCE AS MENTIONED IN C LAUSE N O .7 AT PAGE NO.6 OF THE PAPER BOOK THAT THE PROJECT WAS COMPLETED IN ALL RESPECTS . IN THESE CIRCUMSTANCES , WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS NOT MADE ANY EFFORT TO ESTABLISH THAT THE PROJECT WAS COMPLETED IN ALL RESPECTS AND DID NOT MAKE ANY EFFORT TO OBTAIN THE COMPLETION CERTIFICATE FROM THE LOCAL AUTHORITY. THE ASSESSEE RELIED ON THE DECISION OF M/S. VISHNU BUILDERS (SUPRA) , IN WHICH THE ISSUE WAS RELATED TO THE REVISION U/SEC. 26 3 . IN THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAS ALLOWED THE DEDUCTION AFTER EXAMINING THE DETAILS AND THERE WAS NO DISPUTE THAT THE PROJECT WAS COMPLETED. THE ORDER OF THE COMMISSIONER OF INCOME - TAX WAS SET ASIDE BY THE ITAT SINCE , THE ISSUE WAS DEBATABLE AND THE AO HAS TAKEN A CONSCIOUS VIEW THAT THE ASSESSEE WAS ENTITLED FOR DEDUCTION. IN THE INSTANT CASE , NO SUCH FINDING WAS GIVEN BY THE ASSESSING OFFICER AND THE CASE IS NOT REV I SION U/SEC. 263 , THEREFORE THE DECISION RENDERED BY THE ITAT IN THE CASE OF M/S. VISHNU BUILDERS HAS NO APPLICATION TO THE ASSESSEES CASE . 15 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) THE ASSESSEE ALSO RELIED ON THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS TARNETAR CORPORATION ( 26 TAXMANN.COM 180 ) AND THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD COMPLETED THE CONSTRUCTION TWO YEARS BEFORE THE FINAL DATE AND HAD APPLIED FOR BU PERMISSION. SUCH BU PERMISSION WAS NOT REJECTED ON THE GROUND THAT CONSTRUCTION WAS NOT COMPLETED, BUT SO ME OTHER TECHNICAL GROUND. IN THAT VIEW OF THE MATTER, GRANTING BENEFIT OF DEDUCTION CANNOT BE HELD TO BE ILLEGAL. IN THE CASE OF THE ASSESSEE T HE ASSESSEE HAS NOT SUBMITTED ANY EVIDENCE TO SHOW THAT THE ASSESSEE HA D COMPLIED WITH THE TERMS AND CONDITIONS I MPOSED BY THE VUDA IN THE SANCTIONED PLAN DATED 17/11/2005 . THE ASSESSEE NOT EVEN FILED AN EVIDENCE TO SHOW THAT IT HAD APPLIED FOR COMPLETION CERTIFICATE FOR GRANTING THE DEDUCTION U/S 80IB WHICH IS A MANDATORY REQUIREMENT. THEREFORE, THE CASE - LAW RELIED ON BY THE ASSESSEE IS NO WAY HELPFUL TO THE ASSESSEE. THE OTHER CONTENTION OF THE LD.AR IS THAT THERE IS NO RULE TO ISSUE COMPLETION CERTIFICATE IN THE MUNICIPAL ADMINISTRAT ION AND URBAN DEVELOPMENT RULES AND THE REVENUE CANNOT ENFORCE TO PRODUCE SUCH CERTIFICATE AND THE ASSESSEE CANNOT BE EXPECTED TO DO SOMETHING WHICH IS IMPOSSIBLE FOR THIS PURPOSE. THE LD.AR RELIED ON THE DECISION OF THE ITAT, CALCUTTA BENCH IN THE CASE OF 16 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) ACIT VS. M/S.ASHIANA AMAR DEVELOP ERS IN ITA NO.1307/KOL/2015 DATED 06/10/2017. THE SAME ISSUE WAS CONSIDERED BY THE HONOURABLE MADHYA PRADESH HIGH COURT IN G LOBAL R EALITY & O RS. VS. CIT [ (2016) 286 CTR 0216 ( MP ) ] AND HELD AS UNDER: FOR, THE COURT IN THE MAIN APPEALS WAS CONCERNED WITH THE INTERPRETATION OF SECTION 80IB (10) AS AMENDED. THE PROVISIONS OF MUNICIPAL CORPORATION ACT WILL AND CAN HAVE NO BEARING ON THE INTERPRETATION OF THE AMENDED PROVISIONS OF THE INCOME TAX ACT WHICH WERE UNDER CONSIDERATION. IN OTHER WORDS, THE PURPORT O F SECTION 300 OF THE MUNICIPAL CORPORATION ACT CANNOT CONTROL THE SWEEP OF THE EXPRESS PROVISION CONTAINED IN THE FINANCE (NO.2) ACT, 2004 WHICH CAME INTO FORCE WITH EFFECT FROM 1.4.2005. THE INTERPRETATION ADOPTED BY US IN THE JUDGMENT UNDER REVIEW WAS IN TER - ALIA ON THE BASIS OF THE EXPRESS PROVISION CONTAINED IN THE EXPLANATION BELOW CLAUSE (A) (II) OF SECTION 80IB (10) AS AMENDED. THE SAME READS THUS: - 80IB (10) (A) (I).. (II) .. EXPLANATION. - FOR THE PURP OSES OF THIS CLAUSE, - (I) (II) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY; UNDERSTOOD THU S, NEITHER THE PROVISIONS OF THE CORPORATION ACT WHICH HAVE BEEN RELIED BY THE REVIEW PETITIONERS IN THE PRESENT PETITIONS NOR THE DECISION OF THE SUPREME COURT WILL BE OF ANY AVAIL. THEREFORE , NO RULE IN MUNICIPAL RULES FOR ISSUE COMPLETION CERTIFICATE ALSO CANNOT BE A REASON FOR NON SUBMISSION OF 17 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) COMPLETION CERTIFICATE AND IT IS MANDATOR Y FOR CLAIMING THE DEDUCTION U/S 80IB. THE LD . CIT(A) RELIED ON THE DECISION OF COORDINATE BENCH OF HYDERABAD IN ITO VS SIGMA CONSTRUCTIONS AND THE COORDINATE BENCH HAS EXAMINED THE ISSUES RELATING SUBMISSION OF COMPLE TION CERTIFICATE EVERY YEAR IN CASE THE ASSESSEE FOLLOWS PERCENTAGE COMPLETION METHO D AND SUBMISSION OF COMPLETION CERTIFICATE WITH IN FOUR YEARS 4 YEARS OR ON COMPLETION OF THE PR OJECT. THE COORDINATE BENCH RELYING THE CBDT CIRCULAR HELD THAT I N PERCENTAGE COMPLETION METHOD OF ACCOUNTING IT IS NOT MANDATORY TO SUBMIT THE COMPLETION CERTI FICATE EVERY YEAR AND IT IS SUFFICIENT TO SUBMIT THE COMPLETION CERTIFICATE WITHIN THE SPECIFIED TIME AS PER THE ACT. FOR THE SAKE OF CONVENIENCE, WE EXTRACT THE RELEVANT PART OF THE ORDER OF THE ITAT, HYDERABAD [ (2013) 37 CCH 94 ( HYD - TRIB .)] THE CASE CITE D (SUPRA): - 16. THE MEANING OF DATE OF COMPLETION HAS BEEN GIVEN IN EXPLANATION (II) TO CLAUSE (A) TO SECTION 80IB(10). DATE OF COMPLETION OF CONSTRUCTION WOULD MEAN DATE ON WHICH COMPLETION CERTIFICATE IN RESPECT OF HOUSING PROJECT WAS ISSUED BY THE LOCAL AUTHORITY. TO GRANT DEDUCTION U/S. 80IB(10) IT IS MANDATORY TO FURNISH THE COMPLETION CERTIFICATE OF THE HOUSING PROJECT BUT THE PERSISTENT QUESTION HERE IS WHETHER FOR GIVING BENEFIT OF DEDUCTION U/S. 801 B(10), WHERE AN ASSESSEE IS FOLLOWING THE PE RCENTAGE COMPLETION METHOD IS IT NECESSARY TO OBTAIN SUCH COMPLETION CERTIFICATE FOR EACH YEAR OF ASSESSEES CLAIM OR IT IS SUFFICIENT THAT CERTIFICATE IS OBTAINED ON THE COMPLETION OF THE HOUSING PROJECT AS A WHOLE. STIPULATION FOR OBTAINING COMPLETION CE RTIFICATE SHOULD NOT 18 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) BE SO INTERPRETED TO MEAN THAT AN ASSESSEE CAN CLAIM EXEMPTION U/S. 801 B(10) ONLY IN THE YEAR OF COMPLETION OF WHOLE OF THE HOUSING PROJECT, EVEN WHERE THE PROJECT STRETCHES OVER A NUMBER OF YEARS AND ASSESSEE RETURNS ITS INCOME BASED ON PERCENTAGE COMPLETION METHOD. IT WOULD ONLY MEAN THAT THE ASSESSEE HAS TO OBTAIN SUCH CERTIFICATE ON COMPLETION OF THE HOUSING PROJECT, LEAS TIT WOULD LOSE THE DEDUCTION ALREADY GRANTED U/S. 80IB(10) FOR THE EARLIER YEARS IF IT IS NOT SO PRODUCED. AS H ELD BY THE HONBLE SUPREME COURT IN THE CASE OF BAJAJ TEMPO (196ITR 188) A PROVISION IN THE TAXING STATUTES GRANTING INCENTIVES FOR PROMOTING GROWTH AND DEVELOPMENT OF THE NATION SHOULD BE CONSTRUED LIBERALLY. WHEN SUCH LIBERAL INTERPRETATION IS TO BE GIVE N, THE RESTRICTION PLACED IN SUCH PROVISION GRANTING THE INCENTIVES ALSO HAS TO BE CONSIDERED SO AS TO ADVANCE THE OBJECTIVES OF THE PROVISIONS AND NOT TO FRUSTRATE. CLAUSE (A) OF SECTION 80IB(10) SPECIES THAT SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DE VELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998 AND COMPLETES SUCH CONSTRUCTION, - (I) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY BEFORE THE 1ST DAY OF APRIL, 2004, ON OR BEFORE THE 31ST DAY OFMARCH, 2008; (II) IN A CASE WHERE A HOUSING PROJECT HAS BEEN, OR, IS APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF APRIL, 2004 [BUT NOT LATER THAN THE 31ST DAY OF MARCH, 2005], WITHIN FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY; 17. THUS, A PROJECT CAN HAVE A SPAN OF NOT MORE THAN 4 YEARS FROM THE END OF THE FINANCIAL YEAR IT HAS RECEIVED APPROVAL. EXPLANATION UNDER CLAUSE (A) ONLY SPECIFIED HOW TO RECKON THE DAY OF AP PROVAL AND DATE OF COMPLETION. IT WOULD NOT MEAN THAT THE ASSESSEE CAN HAVE THE BENEFIT OF SECTION 801 B(10) ONLY IN THE YEAR OF COMPLETION OF THE PROJECT, ESPECIALLY SO, FOR AN ASSESSEE NOT FOLLOWING PROJECT COMPLETION METHOD FOR ACCOUNTING ITS INCOME. IF OTHERWISE INTERPRETED, IT WOULD BE EQUIVALENT TO FORCING AN ASSESSEE TO FOLLOW A PARTICULAR METHOD OF ACCOUNTING, WHICH WOULD NEVER HAVE BEEN THE INTENTION OF LEGISLATION. INTENTION WOULD ONLY HAVE BEEN THAT FOR THE PROJECT AS A WHOLE, THERE SHOULD BE CER TIFICATION FROM THE RELEVANT AUTHORITY PROVING THE COMMENCEMENT AND COMPLETION, AND NOT THAT A COMPLETION CERTIFICATE SHOULD BE THERE IN EVERY YEAR OF THE PROJECT SPAN. THE CERTIFICATIONS ARE FOR ENSURING THAT THE PROJECT SPAN DOES NOT EXCEED THE PRESCRIBE D PERIOD AND NOTHING MORE. OF COURSE IF SUCH 19 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) PERIOD EXCEEDED THE PRESCRIBED LIMIT, REVENUE WOULD BE WELL WITHIN ITS RIGHTS TO WITHDRAW THE CLAIMS ALREADY ALLOWED, FOLLOWING THE PROCEDURE PRESCRIBED UNDER THE ACT. THUS, THE ASSESSING OFFICER CANNOT INSIST O N THE COMPLETION CERTIFICATE IN THE IMPUGNED YEAR. THIS VIEW HAS ALSO BEEN TAKEN BY CBDT IN ITS INSTRUCTION NO. 4 OF 2009 DT. 30.6.2009, PARAS 2 TO 4 OF WHICH ARE REPRODUCED HEREUNDER: '2. CLARIFICATIONS HAVE BEEN SOUGHT BY VARIOUS CHIEF CITS ON THE ISSUE WHE THER THE DEDUCTION UNDER S. 801 B(10) WOULD BE AVAILABLE ON A YEAR - TO - YEAR BASIS WHERE AN ASSESSEE IS SHOWING PROFIT ON PARTIAL COMPLETION OR IF IT WOULD BE AVAILABLE ONLY IN THE YEAR OF COMPLETION OF THE PROJECT UNDER S. 80 IB( 10). 3. THE ABOVE ISSUE HAS BEEN CONSIDERED BY THE BOARD AND IT IS CLARIFIED AS UNDER: (A) THE DEDUCTION CAN BE CLAIMED ON A YEAR - TO - YEAR BASIS WHERE THE ASSESSEE IS SHOWING PROFIT FROM PARTIAL COMPLETION OF THE PROJECT IN EVERY YEAR. (B) IN CASE IT IS LATE AND IT IS FOUND THAT T HE CONDITION OF COMPLETING THE PROJECT WITHIN THE SPECIFIED TIME - LIMIT OF 4 YEARS AS STATED IN S. 80 - IB( 10) HAS NOT BEEN SATISFIED, THE DEDUCTION GRANTED TO THE ASSESSEE IN THE EARLIER YEARS SHOULD BE WITHDRAWN. 4. THE ABOVE INSTRUCTION WILL OVERRIDE EARL IER CLARIFICATION ON THIS ISSUE CONTAINED IN MEMBER (R.)S D.O. LETTER NO. 58/MISC/ 2008/CIT (IT & CT), DT.29TH APRIL, 2008 AND MEMBER (IT)S D.O. LETTER NO. 279/MISC/46/2008 - ITJDT.2NDMAY, 2008.' THE ABOVE ORDER WAS AFFIRMED BY THE HONBLE HIGH COURT OF AN DHRA PRADESH IN CIT - III, HYDERABAD VS M/S/SIGMA CONSTRUCTIONS IN ITTA NO.502 OF 2013 DATED 24/10/2013. HONOURABLE S UPREME C OURT IN THE LAND MARK CASE OF COMMISSIONER OF CUSTOMS (IMPORT) MUMBAI VS. M/S DILIP KUMAR & COMPANY AND ORS . HAS OVERRULED THE THREE - JUDGE JUDGMENT IN THE CASE OF SUN EX PORT CORPORATION, BOMBAY VS. COLLECTOR OF 20 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) CUSTOMS, BOMBAY [2002 - TIOL - 118 - SC - CX - LB] (SUN EXPORT CASE) TO FIRMLY HOLD THAT: - IN CASE OF AMBIGUITY IN A CHARGING PROVISION, BENEFIT MUST NECESSARILY GO IN FAVOUR OF ASSESSEE BUT THE SAME IS NOT TRUE FOR AN EX EMPTION NOTIFICATION. WHEN THERE IS AMBIGUITY IN EXEMPTION NOTIFICATION WHICH IS SUBJECT TO STRICT INTERPRETATION, THE BENEFIT OF SUCH AMBIGUITY CANNOT BE CLAIMED BY THE SUBJECT/ASSESSEE AND IT MUST BE INTERPRETED IN FAVOUR OF THE REVENUE. IN THE INSTANT CASE, THE ASSESSEE HAS FILED THE MUNICIPAL TAX ASSESSMENT RECEIPTS IN RESPECT OF FLAT BUYERS. THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE TO ESTABLISH THAT THE PROJECT WAS COMPLETED IN ALL RESPECTS AS PER THE PLAN. THE ASSESSEE NOT EVEN MADE ANY EFFORT T O OBTAIN THE COMPLETION CERTIFICATE FROM THE GVMC FOR THE REASONS BETTER KNOWN TO HIM. THE ASSESSEE HAS NOT MADE APPLICATION BEFORE THE GVMC WITH THE CHECK LIST AS MENTIONED IN THE VUDA APPROVAL DATED 07/11/2005 FOR THE PURPOSE OF CLAIMING DEDUCTION U/SEC . 80IB(10). WITHOUT MAKING APPLICATION, WITHOUT COMPLYING WITH THE TERMS AND CONDITIONS, IT CANNOT BE HELD THAT THE PROJECT IS COMPLETED IN ALL RESPECTS. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT UNLESS THE COMPLETION CERTIFICATE IS FURNISHED PROJECT CANNOT BE HELD TO BE COMPLETED IN ALL RESPECTS AND THE PROJECT COMPLETION CERTIFICATE IS MANDATORY. ACCORDINGLY, WE UP HOLD THE ORDER OF THE LD. CIT(A) AND DISMISS THE APPEAL OF THE ASSESSEE . 21 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) ITA NO. 108/VIZ/2019 12 . THERE WAS A DELAY OF 92 DAYS IN THIS CASE . THE APPEAL IS RELAT ED TO THE ORDER PASSED BY THE ASSESSING OFFICER U/SEC. 115 WE (3) R.W.S. 115WG OF THE ACT. THE AO ASS E SSED THE TOTAL FRINGE BENEFITS OF RS. 7,23,853/ - AND DETERMINED THE TAX PAYA BLE OF RS.6,22,470/ - . 13 . THE ASSESSEE WENT ON APPEAL BEFORE THE LD. CIT(A) AND THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE IN LIMINE WITHOUT GIVING OPPORTUNITY TO THE ASSESSEE, HENCE, ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 14 . DURING THE APPEAL HEARING, LD.AR ARGUED THAT THE LD. CIT(A) TAKEN A DECISION TO DISMISS THE APPEAL I N LIMINE WITHOUT GIVING OPPORTUNITY TO THE ASSESSEE. AS PER COLUMN 15 OF FORM NO.35 , THE ASSESSEE HA D ATTACHED THE REASONS FOR DELAY IN FILING THE APPEAL , WHICH WAS NOT CONSIDERED BY THE LD. CIT(A). THEREFORE, LD. AR REQUESTED TO REMIT THE MATTER BACK TO FILE OF THE LD. CIT(A) TO CONDONE THE DELAY AND TO DECIDE THE APPEAL ON MERITS . 15 . ON THE OTHER HAND, LD.DR SUPPORTED THE ORDER OF THE LD.CIT(A). 16 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD . 22 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) 17 . IN THIS CASE, THERE WAS A DELAY OF 92 DAYS IN FILING THE APPEAL AND THE LD.CIT(A) DISMISSED THE APPE A L IN LIMINE WITHOUT GIVING OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE REASONS. THE LD. CIT(A) OUGHT TO HAVE GIVEN OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE REASONS FOR FILING THE APPEAL BEYOND THE DUE DATE AND DECIDE D THE ISSUE OF CONDONATION OF DELAY. T HEREFORE, WE ARE OF THE CONSIDERED OPINION THAT IT IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND HENCE, THE ISSUE SHOULD BE REMITTED BACK TO THE FILE OF THE LD.CIT(A) TO EXAMINE THE REASONS FOR DELAY IN FILING THE APPEAL AND TO DECIDE THE ISSUE OF CONDON ATION OF THE DELAY AND DECIDE THE APPEAL ON MERITS DEPENDING ON THE OUTCOME OF CONDONATION OF DELAY . THUS, TH E APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 109/VIZ/201 9 18 . IN THIS CASE, THE ASSESSEE HAS FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 22,88,410/ - AND SUBSEQUENTLY , THE ASSESSMENT WAS COMPLETED U/SEC. 143(3) DETERM IN ING THE TOTAL INCOME OF RS. 95,06,520/ - . THE ASSESSING OFFICER MADE VARIOUS ADDITIONS TO THE INCOME RETURNED. 19 . AGAINST THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE WENT ON APPEAL BEFORE THE LD. CIT(A) .I NITIALLY THE APPEAL WAS LYING WITH 23 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) THE LD. CIT(A) VISAKHAPATNAM AND THE ASSESSEE SOUGHT ADJOURNMENTS BEFORE THE LD. CIT(A) VISAKHAPATNAM . THE CASE WAS TRANSFERRED TO THE LD. CIT(A), HYDERABAD AND THE LD. CIT(A) STATED TO HAVE ISSUED THE NOTICE DATED 10/03/20 18 AND POSTED THE CASE FOR HEARING ON 22/03/2018 . ON THE SAID DATE, THE AR OF THE ASSESSEE NEITHER APPEARED NOR FILED ANY LETTER SEEKING ADJOURNMENT , THEREFORE, LD. CIT(A) DECIDED THE APPEAL EXPARTE DISMISSING THE APPEAL. 20. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. IN THE INSTANT CASE, APPEAL WAS DECIDED EXPARTE WITHOUT GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. T HE LD.AR STATED THAT THE SAID NOTICE DATED 10/03/2018 WAS NOT SERVED ON THE ASSESSEE. FOR A QUERY FROM THE BENCH , LD. D R DID NOT PLACE ANY EVIDENCE TO SHOW THAT THE NOTICE DATED 10/03/2018 WAS SERVED ON THE ASSESSEE . THEREFORE, IN THE INTEREST OF JUSTICE, WE ARE OF THE CONSIDERED OPINION THAT THE APPEAL IS TO BE REMITTED BACK TO THE FILE OF THE LD. CIT(A) TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE AND TO PASS THE ORDERS ON MERITS. ACCORDINGLY, THIS APPEAL FILED BY THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. 24 ITA NO. 104 /VIZ/2018 & ITA NOS. 108 & 109/VIZ/201 9 ( ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD. ) 2 1. IN THE RESULT, APPEAL S FILED BY THE ASSESSEE IN ITA NO. 104/VIZ/2018 IS DISMISSED AND IN ITA NOS. 108 & 109/VIZ/2019 ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON TH IS 1 9 T H DAY OF JU LY , 201 9 . S D / - S D / - (V. DURGA RAO) ( D.S. SUNDER SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 1 9 T H JU LY , 201 9 . VR/ - COPY TO: 1. THE ASSESSEE ABHILASH SYNERGETIC CONSTRUCTIONS & EXPORTS PVT. LTD., D.NO. 9 - 29 - 14, BALAJI NAGAR, SIRIPURAM, VISAKHAPATNAM. 2. THE REVENUE ACIT, CIRCLE - 5(1), VISAKHAPATNAM. 3. THE PR. CIT - 1, VISAKHAPATNAM . 4. THE CIT(A) - 6, HYDERABAD. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.