M/s. Ujjwal Construction, Pune V. Income-tax Officer,

ITA 1913/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0948 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-09-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 27-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Assessee Lawyers: K SRINIVASAN
• Keywords: Bonafide belief; Period of limitation; Condonation of delay
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , !'#'' $ , % & BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NOS. 1912 & 1913/PN/2014 %' ( ')( / ASSESSMENT YEARS : 2005-06 & 2007-08 M/S. UJJWAL CONSTRUCTION, RAJYOG APARTMENTS, S. NO. 70, VADGAON BUDRUK, PUNE-411051 PAN : AABFU3163E ....... / APPELLANT ' / V/S. INCOME TAX OFFICER, WARD 1(3), PUNE / RESPONDENT ASSESSEE BY : SHRI K. SRINIVASAN REVENUE BY : SHRI HITENDRA NINAWE / DATE OF HEARING : 21-09-2016 / DATE OF PRONOUNCEMENT : 23-09-2016 * / ORDER PER VIKAS AWASTHY, JM : ITA NOS. 1912 & 1913/PN/2014 HAVE BEEN FILED BY THE ASS ESSEE AGAINST THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS )-I, PUNE DATED 07-04-2011 FOR THE ASSESSMENT YEAR 2005-06 AND DATED 28-02-2011 FOR THE ASSESSMENT YEAR 2007-08, RESPECTIVELY. 2 ITA NOS. 1912 & 1913/PN/2014, A.YS. 2005-06 & 2007-08 SINCE, IDENTICAL ISSUES ARE INVOLVED IN BOTH THE APPEALS, THE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DECIDED BY THIS COMMON ORDER. 2. THE APPEALS HAVE BEEN FILED WITH THE DELAY OF 1224 DAY S. THE LD. AR OF THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY SUPPORTED BY AN AFFIDAVIT CITING REASONS FOR DELAY IN FILING O F APPEAL. THE LD. AR SUBMITTED THAT EX-PARTY ORDERS PASSED BY TH E COMMISSIONER OF INCOME TAX (APPEALS) WERE RECEIVED BY THE OFFICE PEON OF THE ASSESSEE FIRM. THE PEON NEITHER INFORMED THE PARTNERS OF THE ASSES SEE FIRM NOR ANY OFFICE STAFF REGARDING RECEIPT OF THE ORDERS FROM THE OFFIC E OF COMMISSIONER OF INCOME TAX (APPEALS). THE ISSUES RAISED BY THE ASSESSEE IN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) FOR ASSESSMENT YEARS 2005-06 AND 2007-08 WERE IDENTICAL T O THE ISSUES RAISED IN THE APPEAL FOR ASSESSMENT YEAR 2006-07, WHICH W AS REJECTED BY THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE ORDER DAT ED 22-10-2010. THE ASSESSEE HAD FILED APPEAL AGAINST THE OR DER OF COMMISSIONER OF INCOME TAX (APPEALS) FOR ASSESSMENT YEAR 2006-07 BEFORE THE TRIBUNAL IN ITA NO. 607/PN/2011. DURING THE PR OCEEDINGS BEFORE THE TRIBUNAL, A QUERY WAS RAISED BY THE BENCH RE GARDING THE FATE OF APPEAL FOR ASSESSMENT YEAR 2005-06 PENDING BEFORE TH E COMMISSIONER OF INCOME TAX (APPEALS). THE ASSESSEE WAS U NDER BONAFIDE IMPRESSION THAT THE FIRST APPEAL BEFORE THE COMMISS IONER OF INCOME TAX (APPEALS) FOR ASSESSMENT YEARS 2005-06 AND 2007-08 ARE STILL PENDING AWAITING THE ORDER OF TRIBUNAL IN APPEAL FOR ASSE SSMENT YEAR 2006-07. AFTER THE QUERY OF THE BENCH, THE ASSESS EE APPROACHED THE OFFICE OF COMMISSIONER OF INCOME TAX (APPEALS). AFTER ENQ UIRY IT TRANSPIRED THAT THE APPEALS OF THE ASSESSEE FOR ASSESSM ENT YEARS 3 ITA NOS. 1912 & 1913/PN/2014, A.YS. 2005-06 & 2007-08 2005-06 AND 2007-08 HAVE ALREADY BEEN DISMISSED FOR NON - PROSECUTION. THE ASSESSEE THEREAFTER SEARCHED FOR THE IMPUGNED ORDERS. SINCE, THE PEON HAD LEFT THE JOB BY THEN, THE AS SESSEE TOOK SOME TIME TO LOCATE THE ORDER. AFTER LOCATING THE ORDERS , THE ASSESSEE FILED APPEALS FOR THE RESPECTIVE ASSESSMENT YEARS BEFORE T HE TRIBUNAL. BY THE TIME THE ASSESSEE FILED APPEALS BEFORE THE TRIBUNAL , THEY WERE ALREADY TIME BARRED BY 1224 DAYS. THE LD. AR SUBMITTED THAT THE DELAY IN FILING OF APPEALS WAS NOT INTENTIONAL OR WILLFUL BUT WAS CAUSED DUE TO NEGLIGENCE OF THE OFFICE PEON WHO FAILED TO COMMUNICATE THE RECEIPT OF ORDERS PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS). 2.1 THE LD. AR OF THE ASSESSEE FURTHER SUBMITTED THAT THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF COLLECTOR, LAND ACQU ISITION VS. MST. KATIJI AND OTHERS REPORTED AS 167 ITR 471 (SC) AND IN THE CASE OF N. BALAKRISHNAN VS. M. KRISHNAMURTHY REPORTED AS (1998) 7 SCC 123 : AIR 1998 SC 3222 HAS HELD THAT THE EXPLANATION FURNISHED BY THE ASSESSEE RESULTING IN DELAY OF FILING THE APPEALS SHOULD BE AC CEPTED AS A MATTER OF PRINCIPLE. THE EXPRESSION SUFFICIENT CAUSE IN EX PLAINING DELAY IN FILING OF THE APPEALS BEYOND THE PERIOD OF LIMITATION SH OULD BE GIVEN LIBERAL CONSTRUCTION. THE REQUIREMENT THAT EVERY DA YS DELAY SHOULD BE EXPLAINED SHOULD NOT BE STRESSED BY TAKING PED ANTIC APPROACH. THE LD. AR SUBMITTED THAT ON MERITS THE ASSES SEE HAS PRIMA FACIE GOOD CASE AS THE COMMISSIONER OF INCOME TAX (APPEALS ) HAS DISMISSED BOTH THE APPEALS OF THE ASSESSEE FOR NON-PROSE CUTION. THE TRIBUNAL IN VARIOUS DECISIONS HAS HELD THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS NO POWER TO DISMISS THE APPEALS FOR NON- PROSECUTION. THE ASSESSEE HAD FILED APPEAL FOR ASSESSMENT YEAR 2006-07 BEFORE THE TRIBUNAL, IDENTICAL ISSUES ARE INVOLVED IN 4 ITA NOS. 1912 & 1913/PN/2014, A.YS. 2005-06 & 2007-08 ASSESSMENT YEARS 2005-06 AND 2007-08. THE ASSESSEE WOULD NOT HAVE GAINED ANYTHING BY NOT FILING THE APPEALS IN THE IMPUGNED AS SESSMENT YEARS. THE ASSESSEE WAS UNDER BONAFIDE BELIEF THAT THE APPEALS WERE STILL PENDING BEFORE COMMISSIONER OF INCOME TAX (APPEALS) FOR FIN AL DISPOSAL. THE LD. AR PRAYED FOR ADMITTING THE APPEALS AFTER CONDONING THE DELAY. 3. ON THE OTHER HAND SHRI HITENDRA NINAWE REPRESENTING THE DEPARTMENT VEHEMENTLY OPPOSED THE APPLICATIONS FOR COND ONING THE DELAY IN FILING OF THE APPEALS. THE LD. DR SUBMITTED THAT THER E HAS BEEN INORDINATE DELAY OF 1224 DAYS IN FILING OF APPEALS. THE ASSESS EE HAS BEEN NEGLIGENT IN PURSUING HIS CASE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE EXPLANATION FURNISHED BY THE ASSESSEE F OR DELAY IN FILING OF THE APPEALS DOES NOT SHOW SUFFICIENT CAUSE AS ENV ISAGED UNDER THE PROVISIONS OF LIMITATION ACT FOR CONDONING THE DAY. 4. BOTH SIDES HEARD. THE APPEALS FILED BY THE ASSESSEE A RE TIME BARRED BY 1224 DAYS. THE LD. AR OF THE ASSESSEE HAS TR IED TO EXPLAIN THE REASON CAUSING DELAY IN FILING OF APPEALS. AN AFFIDAVIT OF S HRI MANOJ RANOJI POKALE, PARTNER OF THE ASSESSEE FIRM HAS BEEN FILED. THE DELAY IN FILING OF APPEALS HAS BEEN ATTRIBUTED TO THE NEGLIGENCE OF OFFICE PEON WHO HAS RECEIVED THE ORDERS PASSED BY THE COMMISSIONER OF I NCOME TAX (APPEALS) AND THEREAFTER HAS FAILED TO INFORM ABOUT SAME TO THE PARTNERS OF THE ASSESSEE FIRM OR ANY OTHER OFFICE STAFF. THE ASSESSE E LEARNT ABOUT THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS) WHEN IN PURSUANCE TO A QUERY RAISED BY THE TRIBUNAL IN APPEAL OF THE ASSESS EE FOR ASSESSMENT YEAR 2006-07 THE ASSESSEE APPROACHED THE OFFICE OF COMMISSIONER OF INCOME TAX (APPEALS) TO KNOW THE STATUS OF ITS APPEAL 5 ITA NOS. 1912 & 1913/PN/2014, A.YS. 2005-06 & 2007-08 FOR ASSESSMENT YEAR 2005-06 WHEREIN IDENTICAL ISSUE WAS IN VOLVED. ON ENQUIRY IT CAME TO THE KNOWLEDGE OF THE ASSESSEE THAT T HE APPEALS PENDING BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) HA VE BEEN DISMISSED FOR NON-PROSECUTION IN AN EX-PARTY ORDER. THE REASONS GIVEN BY THE ASSESSEE FOR DELAY IN FILING OF APPEALS SUFFICIENTLY EXPLA INS THE CAUSE OF DELAY. ACCORDINGLY, THE SAME ARE ACCEPTED. THE HON'BLE APEX COURT IN THE CASE OF COLLECTOR, LAND AC QUISITION VS. MST. KATIJI AND OTHERS (SUPRA) HAS HELD THAT LIBERAL AND MEANINGFUL INTERPRETATION SHOULD BE GIVEN TO THE EXPRESSION SUFFICIENT CAUSE WHILE CONSIDERING THE REASONS FOR CONDONATION OF DELAY. THE HO N'BLE APEX COURT HAS LAID DOWN THE PRINCIPLES TO BE FOLLOWED WHILE CONS IDERING THE DELAY APPLICATIONS. THE SAME ARE REPRODUCED HERE-IN-UNDER : 1. ORDINARILY, A LITIGANT DOES NOT STAND TO BENEFI T BY LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITO RIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS, WHEN DELAY IS CONDONED, THE HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS A FTER HEARING THE PARTIES. 3. EVERY DAY'S DELAY MUST BE EXPLAINED DOES NOT ME AN THAT PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOU R'S DELAY, EVERY SECOND'S DELAY? THE DOCTRINE MUST BE APPLIED IN A R ATIONAL, COMMON SENSE AND PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERA TIONS ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON DELIBERATE DELAY. 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MALA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESORTING TO DELAY. IN FACT, HE RUNS SERIOUS RISK. 6. IT MUST BE GRASPED THAT THE JUDICIARY IS RESPECT ED NOT ON 6 ITA NOS. 1912 & 1913/PN/2014, A.YS. 2005-06 & 2007-08 ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHN ICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. 5. THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF N. BALAKRISHNAN VS. M. KRISHNAMURTHY (SUPRA) WHILE DEALING WITH TH E ISSUE OF CONDONATION OF DELAY HAS HELD AS UNDER : 9. IT IS AXIOMATIC THAT CONDONATION OF DELAY IS A MATTER OF DISCRETION OF THE COURT. SECTION 5 OF THE LIMITATION ACT DOES N OT SAY THAT SUCH DISCRETION CAN BE EXERCISED ONLY IF THE DELAY IS WI THIN A CERTAIN LIMIT. LENGTH OF DELAY IS NO MATTER, ACCEPTABILITY OF THE EXPLANATION IS THE ONLY CRITERION. SOMETIMES DELAY OF THE SHORTEST RANGE MA Y BE UNCONDONABLE DUE TO A WANT OF ACCEPTABLE EXPLANATION WHEREAS IN CERTAIN OTHER CASES, DELAY OF A VERY LONG RANGE CAN BE CONDONED AS THE E XPLANATION THEREOF IS SATISFACTORY. ONCE THE COURT ACCEPTS THE EXPLANATIO N AS SUFFICIENT, IT IS THE RESULT OF POSITIVE EXERCISE OF DISCRETION AND NORMA LLY THE SUPERIOR COURT SHOULD NOT DISTURB SUCH FINDING, MUCH LESS IN REVIS IONAL JURISDICTION, UNLESS THE EXERCISE OF DISCRETION WAS ON WHOLLY UNT ENABLE GROUNDS OR ARBITRARY OR PERVERSE. BUT IT IS A DIFFERENT MATTER WHEN THE FIRST COURT REFUSES TO CONDONE THE DELAY. IN SUCH CASES, THE SU PERIOR COURT WOULD BE FREE TO CONSIDER THE CAUSE SHOWN FOR THE DELAY AFRE SH AND IT IS OPEN TO SUCH SUPERIOR COURT TO COME TO ITS OWN FINDING EVEN UNTRAMMELED BY THE CONCLUSION OF THE LOWER COURT. 10. THE PRIMARY FUNCTION OF A COURT IS TO ADJUDICAT E THE DISPUTE BETWEEN THE PARTIES AND TO ADVANCE SUBSTANTIAL JUST ICE. THE TIME- LIMIT FIXED FOR APPROACHING THE COURT IN DIFFERENT SITUAT IONS IS NOT BECAUSE ON THE EXPIRY OF SUCH TIME A BAD CAUSE WOULD TRANSFORM INTO A GOOD CAUSE.' 11. RULES OF LIMITATION ARE NOT MEANT TO DESTROY TH E RIGHTS OF PARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILATORY TACTICS, BUT SEEK THEIR REMEDY PROMPTLY. THE OBJECT OF PROVIDING A LEGAL REMEDY IS TO REPAIR THE DAMAGE CAUSED BY REASON OF LEGAL INJURY. THE LAW OF LIMITATION FIXES A LIFESPAN FOR SUCH LEGAL REMEDY FOR THE REDR ESS OF THE LEGAL INJURY SO SUFFERED. TIME IS PRECIOUS AND WASTED TIME WOULD NEVER REVISIT. DURING THE EFFLUX OF TIME, NEWER CAUSES WOULD SPROU T UP NECESSITATING NEWER PERSONS TO SEEK LEGAL REMEDY BY APPROACHING T HE COURTS. SO A LIFESPAN MUST BE FIXED FOR EACH REMEDY. UNENDING PE RIOD FOR LAUNCHING THE REMEDY MAY LEAD TO UNENDING UNCERTAINTY AND CON SEQUENTIAL 7 ITA NOS. 1912 & 1913/PN/2014, A.YS. 2005-06 & 2007-08 ANARCHY. THE LAW OF LIMITATION IS THUS FOUNDED ON PU BLIC POLICY. IT IS ENSHRINED IN THE MAXIM INTEREST REIPUBLICAE UP SIT FINIS LITIUM (IT IS FOR THE GENERAL WELFARE THAT A PERIOD BE PUT TO LITIGATION) . RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHTS OF THE PARTIES. THE Y ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILATORY TACTICS BUT SEEK THEIR REMEDY PROMPTLY. THE IDEA IS THAT EVERY LEGAL REMEDY MUST BE KEPT AL IVE FOR A LEGISLATIVELY FIXED PERIOD OF TIME. 12. A COURT KNOWS THAT REFUSAL TO CONDONE DELAY WOU LD RESULT IN FORECLOSING A SUITOR FROM PUTTING FORTH HIS CAUSE. THERE IS NO PRESUMPTION THAT DELAY IN APPROACHING THE COURT IS ALWAYS DELIB ERATE. THIS COURT HAS HELD THAT THE WORDS 'SUFFICIENT CAUSE' UNDER SECTIO N 5 OF THE LIMITATION ACT SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUBSTANTIAL JUSTICE VIDE SHAKUNTALA DEVI JAIN V. KUNTAL KUMARI (1969) 1 SCR 1006 AND STATE OF W.B. V. ADMINISTRATOR, HOWRAH MUNICIPA LITY(1972) 1 SCC 366. 13. IT MUST BE REMEMBERED THAT IN EVERY CASE OF DEL AY, THERE CAN BE SOME LAPSE ON THE PART OF THE LITIGANT CONCERNED. T HAT ALONE IS NOT ENOUGH TO TURN DOWN HIS PLEA AND TO SHUT THE DOOR AGAINST HIM. IF THE EXPLANATION DOES NOT SMACK OF MALA FIDES OR IT IS NOT PUT FORTH AS PART OF A DILATORY STRATEGY, THE COURT MUST SHOW UTMOST CONSIDERATION TO THE SUITOR. BUT WHEN THERE IS REASONABLE GROUND TO THINK THAT THE D ELAY WAS OCCASIONED BY THE PARTY DELIBERATELY TO GAIN TIME, THEN THE CO URT SHOULD LEAN AGAINST ACCEPTANCE OF THE EXPLANATION. WHILE CONDONING THE DELAY, THE COURT SHOULD NOT FORGET THE OPPOSITE PARTY ALTOGETHER. IT MUST BE BORNE IN MIND THAT HE IS A LOSER AND HE TOO WOULD HAVE INCURRED Q UITE LARGE LITIGATION EXPENSES' 6. THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF RAM NATH SAO @ RAM NATH SAHU AND OTHERS REPORTED AS 2002 (3) SCC 1 95 HAS REITERATED THE LAW LAID DOWN BY THE HON'BLE APEX COURT IN THE CASE OF N. BALAKRISHNAN VS. M. KRISHNAMURTHY (SUPRA). THE HON'BLE COU RT HAS HELD THAT THE EXPRESSION 'SUFFICIENT CAUSE' WITHIN THE MEAN ING OF SECTION 5 OF THE LIMITATION ACT OR ORDER 22 RULE 9 OF T HE CODE OF CIVIL PROCEDURE OR ANY OTHER SIMILAR PROVISION SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUBSTANTIAL JUSTICE WHEN NO NEGLIGENCE OR 8 ITA NOS. 1912 & 1913/PN/2014, A.YS. 2005-06 & 2007-08 INACTION OR WANT OF BONA FIDE IS IMPUTABLE TO A PARTY. IN A PARTICULAR CASE WHETHER EXPLANATION FURNISHED WOULD CONSTITUTE 'SUFFIC IENT CAUSE' OR NOT WILL DEPEND ON FACTS OF EACH CASE. THERE CANNOT BE A STRAITJACKET FORMULA FOR ACCEPTING OR REJECTING EXPLANATION FURNISHED FOR THE DELAY CAUSED IN TAKING STEPS. THE COURTS SHOULD NOT PROCEED W ITH THE TENDENCY OF FINDING FAULT WITH THE CAUSE SHOWN AND REJECT THE PETITION BY A SLIPSHOD ORDER IN OVER JUBILATION OF DISPOSAL DRIVE. ACCE PTANCE OF EXPLANATION FURNISHED SHOULD BE THE RULE AND REFUSAL AN EXC EPTION MORE SO WHEN NO NEGLIGENCE OR INACTION OR WANT OF BONA FIDE CAN BE IMPUTED TO THE DEFAULTING PARTY. THE HON'BLE COURT FURTHER HELD : HOWEVER, BY TAKING A PEDANTIC AND HYPER TECHNICAL VIEW OF THE MA TTER THE EXPLANATION FURNISHED SHOULD NOT BE REJECTED WHEN STAKES ARE HIG H AND/OR ARGUABLE POINTS OF FACTS AND LAW ARE INVOLVED IN THE CASE, CAUS ING ENORMOUS LOSS AND IRREPARABLE INJURY TO THE PARTY AGAINST WHOM THE LIS TERMINATES EITHER BY DEFAULT OR INACTION AND DEFEATING VALUABLE RIGHT OF SUCH A PARTY TO HAVE THE DECISION ON MERIT. WHILE CONSIDERING THE MATT ER, COURTS HAVE TO STRIKE A BALANCE BETWEEN RESULTANT EFFECT OF THE OR DER IT IS GOING TO PASS UPON THE PARTIES EITHER WAY. THUS, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESE NT CASE, THE SUFFICIENT CAUSE SHOWN BY THE ASSESSEE CAUSING DELAY IN FILING OF APPEALS AND LAW LAID DOWN BY THE HON'BLE APEX COURT, THE DELAY OF 122 4 DAYS IN FILING THE APPEALS BY THE ASSESSEE IS CONDONED. TH E APPEALS ARE ADMITTED TO BE HEARD AND DISPOSED OF ON MERITS. 7. THE LD. AR OF THE ASSESSEE HAS POINTED THAT THE APPEA LS OF THE ASSESSEE FOR ASSESSMENT YEARS 2005-06 AND 2007-08 HA VE BEEN DISMISSED FOR NON-PROSECUTION BY THE COMMISSIONER OF INCOM E TAX (APPEALS) IN AN EX-PARTY ORDER. SECTION 250(6) OF THE INCOM E TAX ACT, 9 ITA NOS. 1912 & 1913/PN/2014, A.YS. 2005-06 & 2007-08 1961 (HEREINAFTER REFERRED TO AS THE ACT) PRESCRIBES TH E PROCEDURE TO BE FOLLOWED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IN DIS POSING OF THE APPEALS FILED BY THE ASSESSEE. THE SAME IS REPRODU CED HERE-IN- UNDER : (6) THE ORDER OF THE COMMISSIONER (APPEALS) DISPOS ING OF THE APPEAL SHALL BE IN WRITING AND SHALL STATE THE POINTS FOR DETERMINATION, THE DECISION THEREON AND THE REASON FOR THE DECISION. THUS, FROM A BARE PERUSAL OF THE AFORESAID PROVISION IT IS AM PLY CLEAR THAT THERE IS NO POWER VESTED IN THE COMMISSIONER OF INCOME TAX (APPEALS) TO DISMISS THE APPEAL OF ASSESSEE FOR NON-PROSECU TION. THE COMMISSIONER OF INCOME TAX (APPEALS) BEING A QUASI JUDICIAL A UTHORITY IS DUTY BOUND TO DECIDE THE APPEAL FILED BY THE ASSESSEE ON MERITS BY PASSING SPEAKING ORDER, IN ACCORDANCE WITH LAW. 8. THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF CREAT IVE CASUALS, VS. THE ADDITIONAL COMMISSIONER OF INCOME TAX IN ITA NO. 4636/MUM/2009 FOR ASSESSMENT YEAR 2006-07 DECIDED ON 27-08-2010 HAS HELD THAT THE ACT DOES NOT CONFER ANY POWER ON TH E COMMISSIONER OF INCOME TAX (APPEALS) TO DISMISS THE APPEAL FOR NON-PROSE CUTION. HE HAS TO EXAMINE EACH AND EVERY GROUND TAKEN BEFORE HIM AND DISPOSE OF THE APPEAL ON MERITS. SIMILAR VIEW HAS BEEN TAKEN BY THE CHENNAI BENCH OF THE TRIBUNAL IN THE CASE OF M/S. QUESTNET ENTERP RISES INDIA PRIVATE LIMITED VS. THE ASSISTANT COMMISSIONER OF INCOME TA X IN ITA NOS. 1821 & 1822/MDS/2011 FOR ASSESSMENT YEARS 2006-0 7 AND 2007- 08 DECIDED ON 18-01-2012. 9. THE LD. AR OF THE ASSESSEE HAS POINTED THAT ON ME RITS THE GROUNDS RAISED IN THE PRESENT SET OF APPEALS ARE IDENTICA L TO THE 10 ITA NOS. 1912 & 1913/PN/2014, A.YS. 2005-06 & 2007-08 GROUNDS RAISED BY THE ASSESSEE IN APPEAL FOR ASSESSMENT YEAR 2006-07 IN ITA NO. 607/PN/2011 DECIDED BY THE TRIBUNAL ON 31-10- 2014. THE GROUNDS RAISED BY THE ASSESSEE IN ASSESSMENT YEAR 200 5-06 ARE AS UNDER : 1) THE HON. CIT ERRED IN HOLDING ASSESSEE IS NOT ENTI TLED TO CLAIM RELIEF UNDER SECTION 80 IB(10) EVEN THOUGH ASSESSEE SATISF IES ALL THE REQUIREMENT FOR GRANT OF RELIEF. 2) IT MAY BE HELD CIT(A) AND A.O.'S ORDERS ARE BAD IN LAW AS THEY HAVE FAILED TO INTERPRET PROVISIONS OF SEC.80 IB(10) COR RECTLY IN ACCORDANCE WITH LAW AND DECIDED CASES. 3) ORDERS PASSED BY A.O. AND CIT (A) MAY BE SET ASIDE AND THEY BE DIRECTED TO ACCEPT THE RETURN OF INCOME CLAIMING REL IEF UNDER SEC 80IB(10). 4) THE APPELLANT PLEADS FOR DIRECTIONS ALLOWING HIS AP PEAL AND CRAVES LEAVE TO ADD TO, ALTER, AMEND, MODIFY OR WITHDRAW ANY OR ALL GROUNDS OF APPEAL. IDENTICAL GROUNDS HAVE BEEN RAISED BY THE ASSESSEE IN A PPEAL FOR ASSESSMENT YEAR 2007-08. 10. WE FIND THAT THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES APPEAL FOR ASSESSMENT YEAR 2006-07 UNDER IDENTICAL SET O F FACTS AND GROUNDS HAVE DECIDED THE ISSUE RELATING TO THE CLAIM OF D EDUCTION U/S. 80IB(10) OF THE ACT IN FAVOUR OF THE ASSESSEE. THE FINDINGS OF TRIBUNAL ON THE ISSUE ARE AS UNDER : 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO THE CLAIM OF DEDUCTION UNDER SECTION 80-IB(10) OF THE ACT. THE ASSESSEE H AD UNDERTAKEN THE PROJECT FOR CONSTRUCTION OF RESIDENTIAL PREMISES AT VADGAON SHERI, PUNE AHMEDNAGAR ROAD, PUNE UNDER THE NAME AND STYLE OF U JJWAL GARDENS. THE BUILDING PLANS FOR THE SAID PROJECT WERE FIRST SANCTIONED BY THE PUNE MUNICIPAL CORPORATION IN JANUARY, 2001 AND SUBSEQUE NTLY IN MARCH, 2003 AND JULY, 2004. THE ASSESSEE HAD CLAIMED THE DEDUCTION UNDER SECTION 80-IB(10) OF THE ACT FOR THE FIRST TIME FOR A.Y. 2004-05 AND THEREOF 11 ITA NOS. 1912 & 1913/PN/2014, A.YS. 2005-06 & 2007-08 A.YS. 2005-06 AND 2007-08. THE ASSESSMENTS RELATIN G TO A.YS. 2004-05 AND 2005-06 WERE COMPLETED BY PASSING ORDER UNDER S ECTION 143(3) OF THE ACT AND THE CLAIM OF THE ASSESSEE WAS ACCEPTED. THE CLAIM OF THE ASSESSEE WAS ACCEPTED VIS--VIS THE DEDUCTION CLAIM ED UNDER SECTION 80- IB(10) OF THE ACT. HOWEVER, DURING THE ASSESSMENT PROCEEDINGS, TAKEN UP FOR THE YEAR UNDER APPEAL I.E. A.Y. 2006-07, THE AS SESSING OFFICER REQUISITIONED THE ASSESSEE TO FURNISH THE COMPLETIO N CERTIFICATE FROM THE PUNE MUNICIPAL CORPORATION. THE SAID COMPLETION CE RTIFICATE AS PER THE ASSESSING OFFICER SHOULD HAVE BEEN RECEIVED BY 31.0 3.208. THE CONTENTION OF THE ASSESSEE IN REPLY WAS THAT THE PR OJECT HAD BEEN COMPLETED AND THE BUILDING HAD BEEN OCCUPIED AND WA S BEING USED BY THE OCCUPIES WHICH ESTABLISHED THE CLAIM OF THE ASS ESSEE AS TO COMPLETION OF THE PROJECT WITHIN THE STIPULATED PER IOD. THOUGH THE COMPLETION CERTIFICATE WAS NOT RECEIVED FROM THE PU NE MUNICIPAL CORPORATION. HOWEVER, THE ARCHITECTS CERTIFICATE ALONG WITH THE ANCILLARY CERTIFICATES RECEIVED FROM THE VARIOUS DEPARTMENT T O ESTABLISH THE COMPLETION OF THE PROJECT WERE FILED BEFORE THE ASS ESSING OFFICER AND THE CIT(A). BUT THE ASSESSING OFFICER IN THE ABSENCE O F ANY CERTIFICATE FROM THE PUNE MUNICIPAL CORPORATION OBSERVED THAT THE AS SESSEE FAILED TO COMPLETE THE PROJECT WITHIN THE STIPULATED TIME PRE SCRIBED IN SECTION 80- IB(10) OF THE ACT I.E. BEFORE 31.03.2008 AND THE DE DUCTION CLAIMED U/S 80-IB(10) OF THE ACT AT RS.7,79,060/- WAS DENIED TO THE ASSESSEE, WHICH WAS UPHELD BY THE CIT(A). 9. THE EXPLANATION OF THE ASSESSEE IN THIS REGARD W AS THAT THE PROJECT HAD BEEN COMPLETED WITHIN TIME LIMIT I.E. 31 .03.2008 AS WAS EVIDENT FROM THE FACT THAT ALL THE ANCILLARY CERTIF ICATES FROM THE VARIOUS DEPARTMENTS HAD BEEN RECEIVED, COPIES OF WHICH ARE AVAILABLE AT PAGES 20 TO 24 OF THE PAPER BOOK. THE COMPLETION CERTIFI CATE WAS ALSO RECEIVED FROM ARCHITECT WHICH IS PLACED AT PAGE 19 OF THE PA PER BOOK. IN ADDITION, THE CORPORATION TAX NOTICE HAD BEEN ISSUED TO THE O WNERS WHICH ARE PLACED AT PAGES 37 TO 41 OF THE PAPER BOOK. ALL TH E ABOVE SAID EVIDENCES ESTABLISHED THAT THE CONSTRUCTION OF THE BUILDING I S COMPLETED AND IS FULLY OCCUPIED. IN RESPECT OF THE COMPLETION CERTIFICATE TO BE ISSUED BY THE PUNE MUNICIPAL CORPORATION, THE LEARNED AUTHORIZED REPRE SENTATIVE BY THE ASSESSEE ADMITTED THAT NO SUCH CERTIFICATE HAS BEEN ISSUED TILL DATE. IT WAS EXPLAINED BY THE ASSESSEE IN OCTOBER, 2005, THE ADDITIONAL COMMISSIONER, PUNE MUNICIPAL CORPORATION ISSUED AN O RDER ASKING NOT ONLY THE ASSESSEE FIRM BUT ALSO ALL ITS PARTNERS, S ISTER CONCERNS AND OTHERS TO STOP WORK AT ALL THEIR SITES FALLING WITH IN THE JURISDICTION OF PUNE MUNICIPAL CORPORATION. THE SAID ORDER WAS ISSUED O N THE BASIS OF A COMPLAINT FILED BY ONE SHRI VASANT MAHADEV DESHPAND E, WHO WAS THE 12 ITA NOS. 1912 & 1913/PN/2014, A.YS. 2005-06 & 2007-08 LAND OWNER OF ANOTHER SITE. AGAINST THE SAID, THE ASSESSEE FILED A SUIT WITH THE COURT OF CIVIL JUDGE, SENIOR DIVISION, PUN E ON 21.06.2006 AGAINST THE PUNE MUNICIPAL CORPORATION AND THE RELI EF CLAIMED IN THE SAID SUIT WAS THAT IF THE WORK HAD TO BE STOPPED ON THE COMPLAINT OF SHRI VASANT MAHADEV DESHPANDE THEN IT SHOULD BE RELATED TO THE SITE OF SHRI VASANT MAHADEV DESHPANDE ONLY AND WORK AT ALL THE O THER SITES SHOULD NOT BE STOPPED. THE CIVIL JUDGE, SENIOR DIVISION, PUNE VIDE ORDER DATED 01.07.2006 LIFTED THE RESTRAIN ORDER PASSED BY THE PUNE MUNICIPAL CORPORATION IN RESPECT OF THE OTHER PROPERTIES, WHI CH DID NOT RELATE TO THE COMPLAINANT, SHRI VASANT MAHADEV DESHPANDE. THE CO PY OF THE CIVIL SUIT FILED BY THE ASSESSEE IS PLACED AT PAGES 28 TO 36 OF THE PAPER BOOK AND THE HAND-WRITTEN ORDER OF THE CIVIL JUDGE IS AV AILABLE AT PAGE 32 OF THE PAPER BOOK. THE PLEA OF THE ASSESSEE IS THAT C ONSEQUENT TO THE SAID ORDER OF THE CIVIL JUDGE, SENIOR DIVISION, PUNE THE CONSTRUCTION OF ALL THE SITES EXCEPT THE SITE CONNECTED WITH SHRI VASANT MA HADEV DESHPANDE WERE STARTED AND WAS LATER COMPLETED. HOWEVER, THE PUNE MUNICIPAL CORPORATION DID NOT ISSUE THE COMPLETION CERTIFICAT E IN RESPECT OF THE PROPERTIES CONSTRUCTED BY THE ASSESSEE. IN THE ABO VE SAID CIRCUMSTANCES, THE APPLICATION FOR OBTAINING COMPLE TION CERTIFICATE PREPARED BY THE ASSESSEE WAS NOT ACCEPTED BY THE PU NE MUNICIPAL CORPORATION AND CONSEQUENT THERETO THE COMPLETION C ERTIFICATE HAS NOT BEEN ISSUED TO THE ASSESSEE TILL DATE. 10. THE ISSUE ARISING IN THE PRESENT APPEAL IS THAT WHERE THE ASSESSEE HAD COMPLETED CONSTRUCTION OF THE BUILDING, WHICH H AD BEEN OCCUPIED BY THE OWNERS WITHIN THE STIPULATED TIME PROVIDED UNDE R SECTION 80-IB(10) OF THE ACT, MERELY BECAUSE THE ASSESSEE HAD NOT RECEIV ED THE COMPLETION CERTIFICATE, THE SAID CLAIM UNDER SECTION 80-IB(10) OF THE ACT CAN BE DENIED TO THE ASSESSEE. 11. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. CHD DEVELOPERS LTD., (2014) 362 ITR 177 (DELHI) NOTED T HE PROVISIONS OF SECTION 80-IB(10) OF THE ACT AND THE PRE-AMENDED PR OVISIONS WHICH WERE AMENDED BY FINANCE ACT, 2000 W.E.F. 01.04.2001 AND ALSO THE SUBSTITUTION BY THE FINANCE (NO.2) ACT, 2004 W.E.F. 01.04.2005 AND HELD THAT IN THE PRE-AMENDED PROVISIONS WHEN THE PLAN WA S SANCTIONED/APPROVED, THERE WAS NO CONDITION OF PROD UCTION OF COMPLETION CERTIFICATE. THE HONBLE HIGH COURT HELD THAT THE IT WAS A SETTLED PROPOSITION OF LAW THAT THE LAW EXISTING AT THE PAR TICULAR TIME WOULD BE APPLICABLE, UNLESS AND UNTIL IT WAS SPECIFICALLY MA DE RETROSPECTIVE BY THE LEGISLATURE. THE HONBLE HIGH COURT THUS HELD THAT THE SUBSTITUTION SO MADE, IS THEREFORE, APPLICABLE PROSPECTIVELY AND NO T RETROSPECTIVELY. IN 13 ITA NOS. 1912 & 1913/PN/2014, A.YS. 2005-06 & 2007-08 THE FACTS OF THE CASE BEFORE THE HONBLE HIGH COURT IN THE CASE OF CIT VS. CHD DEVELOPERS LTD. (SUPRA), THE APPROVAL WAS GRANT ED TO THE ASSESSEE ON 16.03.2005 AND THE ASSESSEE WAS EXPECTED TO COMP LETE THE PROJECT ON OR BEFORE 31.03.2009. THE ISSUE ARISING BEFORE THE HONBLE HIGH COURT WAS WHETHER THE PROJECT WAS COMPLETED BY THE ASSESS EE WITHIN TIME. THE HIGH COURT NOTED THAT ASSESSEE HAD VIDE LETTER DATED 05.11.2008 INFORMED THE AUTHORITIES THAT THE CONSTRUCTION HAVE BEEN COMPLETED AND FURTHER REQUEST WAS MADE FOR GRANT OF COMPLETION CE RTIFICATE. HOWEVER, NO COMPLETION CERTIFICATE WAS ISSUED TO THE ASSESSE E AND IT WAS HELD BY THE HONBLE HIGH COURT NON-OBTAINING OF COMPLETION CERTIFICATE WAS NOT REQUIREMENT TO THE PROJECTS WHICH WERE APPROVED PRI OR TO 01.04.205 WHEN THE AMENDMENT BY THE FINANCE ACT, 2004 WAS MAD E EFFECTIVE. 12. IN THE PRESENT CASE, THE PROJECT HAS BEEN APPRO VED BY THE LOCAL AUTHORITY BEFORE 01.04.2005 WITHIN THE MEANING OF C LAUSE (A) OF SECTION 80-IB(10) OF THE ACT AND THEREFORE THE RATIO OF THE JUDGEMENT OF THE HONBLE HIGH COURT IN THE CASE OF CIT VS. CHD DEVEL OPERS LTD. (SUPRA) SQUARELY APPLIES. HOWEVER, IT WOULD BE REQUIRED TO ESTABLISH BY THE ASSESSEE THAT THE CONSTRUCTION OF THE PROJECT AS SA NCTIONED WAS COMPLETED BEFORE THE STIPULATED DATE. ON THIS ASPE CT, ASSESSEE HAS BEEN CONSISTENTLY POINTING OUT BEFORE THE ASSESSING OFFI CER, CIT(A), AS WELL AS BEFORE THE TRIBUNAL THAT THE CONSTRUCTION WAS COMPL ETED BEFORE THE STIPULATED DATE. THE FLATS HAVE BEEN SOLD AND ARE OCCUPIED BY THE RESPECTIVE CUSTOMERS. IT HAS ALSO BEEN POINTED OUT THAT IN SOME OF THE CASES THE LOCAL AUTHORITY HAS ISSUED INDIVIDUAL COM PLETION CERTIFICATES TO THE RESPECTIVE FLAT OWNERS. OTHER DOCUMENT VIZ. PR OPERTY TAX ASSESSMENT OF SOME INDIVIDUAL FLAT OWNERS, ELECTRICITY BILLS S HOWING OCCUPATION OF THE FLATS, ETC. HAVE BEEN REFERRED TO IN THE COURSE OF HEARING. WE FIND THAT THE SAID MATERIAL WAS PLACED BEFORE THE LOWER AUTHORITI ES AND THE SAME HAS NOT BEEN REPUDIATED AT ALL. THE DENIAL OF DEDUCTIO N HAS BEEN SOLELY ON NON-OBTAINING OF COMPLETION CERTIFICATE, WHICH IN T HE PRESENT CASE IS NOT A REQUIREMENT TO BE INSISTED UPON IN VIEW OF THE JUDG EMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. CHD DEVELOP ERS LTD. (SUPRA). 13. IN THE AFORESAID, WE HEREBY SET-ASIDE THE ORDE R OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE UNDER SECTION 80-IB(10) OF THE ACT. THUS, THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED. 11. THE LD. DR HAS NOT BEEN ABLE TO CONTROVERT THE FINDING S OF CO- ORDINATE BENCH OF THE TRIBUNAL OR SHOW ANY DISTINCTION IN T HE FACTS IN 14 ITA NOS. 1912 & 1913/PN/2014, A.YS. 2005-06 & 2007-08 THE ASSESSMENT YEARS UNDER APPEAL. THEREFORE, FOLLOWING T HE ORDER OF CO-ORDINATE BENCH, WE ACCEPT THE APPEALS OF THE ASSESSE E AND ALLOW THE CLAIM OF ASSESSEE IN THE SAME TERMS. 12. IN THE RESULT, THE IMPUGNED ORDERS ARE SET ASIDE AND BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 23 RD DAY OF SEPTEMBER, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 23 RD SEPTEMBER, 2016 RK *+,%-.#/#)- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-I, PUNE 4. ' / THE CIT-I, PUNE 5. !*+ %%,- , ,- , . ./0 , / DR, ITAT, B BENCH, PUNE. 6. + 1 23 / GUARD FILE. // ! % // TRUE COPY// #4 / BY ORDER, %5 ,0 / PRIVATE SECRETARY, ,- , / ITAT, PUNE