C.P. Sethumadhavan, Pune V. Assisant Commissioner of Income-tax,

ITA 225/PUN/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6959 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-12-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 05-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRUPAMA KOTRU
• Assessee Lawyers: SUNIL PATHAK; P D KUDWA
• Keywords: Principle of natural justice; Additional evidence

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NOS. 224 & 225/PUN/2014 / ASSESSMENT YEARS : 2009-10 & 2010-11 C.P. SETHUMADHAVAN, VIJAY HOUSE, 599, SACHAPIR STREET, CAMP, PUNE - 411 001 PAN : AESPC5520M . /APPELLANT VS. ACIT,CIRCLE-4, PUNE/ DCIT, CIRCLE-4, PUNE . / RESPONDENT ASSESSEE BY : SHRI SUNIL PATHAK & SHRI P.D. KUDWA REVENUE BY : SMT. NIRUPAMA KOTRU / DATE OF HEARING : 07.12.2017 / DATE OF PRONOUNCEMENT: 13.12.2017 / ORDER PER D. KARUNAKARA RAO, AM : THERE ARE 2 APPEALS FILED BY THE ASSESSEE UNDER CON SIDERATION. THEY ARE FILED AGAINST THE COMMON ORDER OF THE CIT( A)-II, PUNE, DATED 31-10-2013 INVOLVING ASSESSMENT YEARS 2009-10 AND 2 010-11 2. IDENTICAL GROUNDS HAVE BEEN RAISED BY THE ASSESS EE FOR BOTH THE ASSESSMENT YEARS AND FOR REFERENCE, WE PROCEED TO E XTRACT THE GROUNDS FOR A.Y. 2009-10 WHICH ARE AS UNDER : ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW : 1. THE LEARNED AO FAILED TO APPRECIATE THAT IN RESP ECT OF DEVELOPMENT AND CONSTRUCTION OF HOUSING PROJECTS OUTSIDE MUNICI PAL CORPORATION LIMITS, THE COLLECTOR OF PUNE (BEING THE SANCTIONING AUTHOR ITY) DID NOT HAVE A SYSTEM OF ISSUING COMPLETION CERTIFICATE UNDER THE MAHARASTHTRA REGIONAL AND TOWN PLANNING ACT, 1966 AND THAT UNDER THE SAID ACT THE COMPLETION CERTIFICATE ISSUED BY A LOCAL ARCHITECT WAS COMPLIA NCE WITH REFERENCE TO COMPLETION OF THE PROJECT. THE APPELLANT PLEADS THA T UNDER THE PROVISIONS OF ITA NOS.224 & 225/PUN/2014 C.P. SETHUMADHAVAN 2 THE MRTP ACT, 1966 IT COULD NOT BE EXPECTED TO PROD UCE A COMPLETION CERTIFICATE FROM THE COLLECTOR OF PUNE CERTIFYING I TS PROJECT AS COMPLETE BEFORE 31.03.2011. 2. THE AO ERRED IN REJECTING THE APPELLANT'S CLAIM OF DEDUCTION U/S.80IB(10) ON GROUNDS OF NON ISSUE OF COMPLETION CERTIFICATE BY THE LOCAL AUTHORITY NOTWITHSTANDING THE FACT THAT THE ASSESSE E'S KIRTI ELEGANT PROJECT WAS COMPLETED AND DULY CERTIFIED AS COMPLETE BY ITS ARCHITECT ON 09.01.2009 (WITHIN THE DUE DATE OF 31.03.2011) AND ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10) OF THE INCOME TAX ACT , 1961. 3. THE HON CIT(A) ERRED IN HOLDING THAT AS THE APPE LLANT ' S KIRTI ELEGANT PROJECT AT VILLAGE MHALUNGE WAS NOT CERTIFIED AS CO MPLETE BY THE GRAM PANCHAYAT MHALUNGE AND THAT THE ASSESSEE HAD NOT BR OUGHT ON RECORD ANY MATERIAL SUGGESTING ANY EFFORTS MADE FOR OBTAINING THE SAID CERTIFICATE FROM THE GRAM PANCHAYAT, THE APPELLANT'S CLAIM FOR DEDUC TION U/S.80IB(10) FAILS AS CONDITIONS U/S. 80IB(10)(A) REMAIN TO BE FULFILLED. 4. THE APPELLANT PLEADS THAT THE ACTION OF THE AO A ND CIT(A) DISMISSING THE ASSESSEE'S CLAIM OF DEDUCTION U/S 80 IB(10) IS NOT JUSTIFIED . THE APPELLANT PLEADS THAT ITS CLAIM IS LEGITIMATE A ND ALLOWABLE. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE TH AT THE ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF PURCHA SE AND SALE OF LAND AND CONSTRUCTION ACTIVITY. ASSESSEE FILED THE RETURN OF INCOME ON 31-10-2009 DECLARING TOTAL INCOME OF RS.1,01,49, 170/-. THE ASSESSED INCOME WAS DETERMINED U/S.143(3) OF THE AC T AT RS.2,41,08,930/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ALLOWABILITY OF DEDUCTION U/S.80IB(10) IN RESPECT O F THE PROFITS DERIVED FROM A HOUSING PROJECT NAMED KIRTI ELEGANT AT MAHALUNGE VILLAGE, MULSHI TALUKA, DISTRICT, PUNE. THIS PROJE CT IS LOCATED OUTSIDE THE MUNICIPAL LIMITS OF PUNE. THE PROJECT IS LOCAT ED IN A PANCHAYAT LIMITS AND THEREFORE, THE SAME WAS APPROVED BY THE COLLECTOR, PUNE VIDE THE COMMENCEMENT LETTER DATED 06-07-2005. AS PER THE ASSESSEE, THE PROJECT WAS COMPLETED BY 31-03-2011 A ND THE COMPLETION CERTIFICATE OF THE ARCHITECT FILED WITH THE OFFICE OF THE COLLECTOR IS RELIED. THESE AUTHORITIES DID NOT ISS UE ANY CERTIFICATE TO THE ASSESSEE. THEREFORE, THERE IS A PROBLEM FOR TH E ASSESSEE IN PRODUCING THE REQUISITE COMPLETION CERTIFICATE FROM A LOCAL AUTHORITY (LA) AS REQUIRED UNDER THE STATUTE U/S.80IB(10) OF THE ACT. DURING ITA NOS.224 & 225/PUN/2014 C.P. SETHUMADHAVAN 3 THE ASSESSMENT PROCEEDINGS AND IN RESPONSE TO THE S HOW CAUSE NOTICE OF THE AO, THE ASSESSEE SUBMITTED THAT THERE IS NO SYSTEM OF ISSUING COMPLETION CERTIFICATE BY THE COLLECTOR OR BY THE VILLAGE-LOCAL AUTHORITY ETC. CONSIDERING THE ABSENCE OF FORMAL C OMPLETION CERTIFICATE ISSUED BY THE LOCAL AUTHORITY OR THE CO LLECTOR, ON OUR HAND, AND THE STIPULATION PROVIDED IN THE STATUTE ON THE OTHER, AO HELD THAT THE ASSESSEE FAILED TO MEET THE CONDITION OF FURNIS HING THE COMPLETION CERTIFICATE BY A LOCAL AUTHORITY. CONSEQUENTLY, TH E CLAIM OF DEDUCTION U/S.80IB(10) OF THE ACT AMOUNTING TO RS.1,39,59,759 /- IS ADDED BACK TO THE RETURNED INCOME OF THE ASSESSEE. 4. DURING THE FIRST APPELLATE PROCEEDINGS, THIS ISS UE OF CLAIM OF DEDUCTION WAS SUBJECT MATTER OF THE LITIGATION. AS SESSEE FURNISHED VARIOUS DETAILS ABOUT THE PROJECT THE WAY IT WAS AP PROVED BY THE COLLECTOR, PUNE, THE WAY IT WAS COMPLETED WELL WITH IN THE TIME PROVIDED UNDER THE STATUTE AND EVIDENCED THE COMPLE TION OF THE HOUSING PROJECT. THE FACT OF SALE OF THE FLATS AND THE DETAILS OF OCCUPATION OF THE FLATS BY THE FLAT BUYERS WERE ALS O FURNISHED BEFORE THE AUTHORITIES. HOWEVER, THE CIT(A) FOCUSED ON TH IS CORE ISSUE OF NON-ISSUANCE OF COMPLETION CERTIFICATE BY THE LOCAL AUTHORITY. CIT(A) GAVE A DETAILED DISCUSSION ON THIS ISSUE IN VARIOUS SUB PARAGRAPHS OF PARA NO.3 OF HIS ORDER. THE FACT OF FURNISHING THE COMPLETION CERTIFICATE DATED 09-01-2009 FROM THE ARCHITECT TO THE LOCAL AUTHORITY WAS ALSO DISCUSSED. CIT(A) HELD THE COMPLETION CER TIFICATE ISSUED BY THE ARCHITECT IS NOT THE REQUIREMENT OF THE LAW. H E INSISTED ON THE COMPLETION CERTIFICATE ISSUED BY THE LOCAL AUTHORIT Y. HE ALSO CONSIDERED THE FACT THE HELPLESSNESS OF THE ASSESSE E WHEN THE LOCAL AUTHORITY PASSIVELY REFUSED TO ISSUE ANY SUCH CERTI FICATE IN THE ABSENCE OF ANY SYSTEM IN EXISTENCE WITH SUCH REVENU E AUTHORITY OF ITA NOS.224 & 225/PUN/2014 C.P. SETHUMADHAVAN 4 THE STATE OF MAHARASHTRA. EVENTUALLY, THE CIT(A) D ISCUSSED AND RELIED ON THE ORDER OF THE TRIBUNAL IN THE CASE OF SHRI KRISHNA LOHOKARE IN ITA NO.937/PN/2010 FOR A.Y. 2006-07 FOR THE PROPOSITION THAT THE LOCAL AUTHORITY IS THE ISSUING AUTHORITY OF THE COMPLETION CERTIFICATE FOR ENABLING THE ASSESSEE TO CLAIM DEDUCTION U/S.80IB(10) OF THE ACT. IT WAS A CASE WHERE GRAM PANCHAYAT, KESHAV NAGAR, MUNDHWA, PUNE WAS INVOLVED. ACCORDIN GLY, THE CIT(A) DISMISSED THE CLAIM OF DEDUCTION U/S.80IB(10 ) OF THE ACT FOR BOTH THE A.YRS. 2009-10 AND 2010-11 GIVING THE FOLL OWING FINDING : 3.10 IN VIEW OF THE ABOVE FACTS, THE CLAIM OF DEDU CTION U/S.80IB(10) IS HELD TO BE NOT ALLOWABLE FOR BOTH THE YEARS, I.E. A .Y. 2009-10 AND A.Y. 2010-11. GROUND OF APPEAL NO.1 RAISED BY THE ASSES SEE IS DISMISSED FOR BOTH THE YEARS UNDER CONSIDERATION. 5. AGGRIEVED WITH THE ABOVE DECISION OF THE CIT(A) FOR BOT H THE ASSESSMENT YEARS, THE ASSESSEE FILED THE PRESENT APPEAL S BEFORE THE TRIBUNAL WITH THE GROUNDS EXTRACTED ABOVE. 6. THE CORE ISSUE RAISED IN THE GROUNDS AS CAN BE SEEN IN THEM, RELATES TO CORRECTNESS OF DISALLOWING THE CLAIM OF DEDUCTION WHEN THERE IS A NO SYSTEM WITH THE VILLAGE LOCAL AUTHORITY FOR ISSUING THE COMPLETION CERTIFICATE IN RESPECT OF THE PROJECTS LOCATED WITHIN THEIR PANCHAYAT LIMITS. IN THIS REGARD, LD. COUNSEL FOR THE ASSESSEE FILED VARIOUS D ETAILS ABOUT THE PROJECT AND OTHER EVIDENCES IN RESPECT OF THE CLAIM OF COMPLETION OF THE PROJECT, SALE OF THE UNITS AND POSSESSION BY THE FLAT BUYERS ETC. HE ALSO BROUGHT OUR ATTENTION TO THE COMPLETION CERTIFICATE IS SUED BY THE ARCHITECT OF THE PROJECT AND FURNISHING OF THE SAME TO TH E COLLECTOR, PUNE, TOWN PLANNING AUTHORITIES, VILLAGE AUTHORITIES ETC., HE ALSO BR OUGHT TO OUR NOTICE VARIOUS JUDICIAL PRONOUNCEMENTS IN SUPPORT OF C LAIM OF THE ASSESSEE. FINALLY, THE ASSESSEE FILED A LETTER DATED NIL EN CLOSING VARIOUS ADDITIONAL EVIDENCES : ITA NOS.224 & 225/PUN/2014 C.P. SETHUMADHAVAN 5 1. REPLY GIVEN BY THE GRAM PANCHAYAT, MAHALUNGE DT . 30-08-2016 UNDER THE RTI ACT, 2005 REGARDING COMPLETION CERTIF ICATE. THE ENGLISH TRANSLATION OF THE SAME AND THE APPLICATIONS OF THE ASSESSEE. 2. REPLY GIVEN BY THE COLLECTOR, PUNE DATED 26-05-2 016 UNDER THE RTI ACT, 2005. THE ENGLISH TRANSLATION OF THE SAME AND THE APPLICATION OF THE ASSESSEE. 3. REPLY GIVEN BY THE ASST. DIRECTOR, TOWN PLANNING , PUNE DATED 10- 10-2016 UNDER THE RTI ACT, 2005. THE ENGLISH TRANSL ATION OF THE SAME AND THE APPLICATION OF THE ASSESSEE. 7. WITH THE COVERING LETTER, THE ASSESSEE FURNISHED THE FO LLOWING SUBMISSIONS AND THE SAME ARE EXTRACTED HEREUNDER : 1. THE ISSUE CONTESTED IN THE ABOVE APPEALS IS THE DENIAL OF THE APPELLANT'S CLAIM FOR DEDUCTION UNDER SECTION 80IB( 10) ON GROUNDS OF NON FURNISHING OF THE COMPLETION CERTIFICATE ISSUED BY THE LOCAL AUTHORITY, CERTIFYING THE BUILDING PROJECT (LOCATED BEYOND MUN ICIPAL CORPORATION LIMITS) AS COMPLETE ON OR BEFORE 31.03.2011. 2. THE APPELLANT'S HOUSING PROJECT WAS SANCTIONED B Y THE COLLECTOR, PUNE ON 06.07.2005 AND COMPLETED BY JANUARY 2009. A LL FLATS IN THE SCHEME WERE SOLD OUT AND HANDED OVER TO CUSTOMERS I N Y.E. 31.03.2008, 31.03.2009 AND 31.03.2010. 3. ON 17.01.2009 THE APPELLANT APPLIED TO THE COLLE CTOR, PUNE FOR ISSUE OF COMPLETION CERTIFICATE BY ENCLOSING THE PROJECT ARCHITECT'S CERTIFICATE CERTIFYING COMPLETION OF THE PROJECT. THE (PAGE NO. 60 TO 63 OF PAPER BOOK - I). THESE DOCUMENTS ARE ON THE AO'S RECORD AND HAVE BEEN CONSIDERED IN THE ASSESSMENT AND IN APPELLATE PROCEEDINGS BEFORE CIT(A). THE COLLECTOR'S OFFICE DID NOT ISSUE A COMPLETION CERTIFICATE AS SU CH A PROCEDURE WAS NOT IN EXISTENCE. 4. SUBSEQUENT TO THE ORDER OF THE CIT(A), THE APPEL LANT THROUGH HIS CA, SHRI K B JOSHI APPLIED TO THE OFFICES OF THE COLLEC TOR, THE ASST. DIRECTOR OF TOWN PLANNING AND THE GRAMPANCHAYAT VILLAGE MAHALUN GE FOR INFORMATION UNDER THE RIGHT TO INFORMATION ACT, 2005 REGARDING ISSUE OF COMPLETION CERTIFICATE IN RESPECT OF BUILDING PROJECTS LOCATED IN AREAS BEYOND MUNICIPAL CORPORATION LIMITS IN GENERAL AND THE APPELLANT'S PR OJECT LOCATED IN MAHALUNGE IN PARTICULAR. THE REPLIES FROM THESE AUT HORITIES HAVE BEEN RECEIVED AND ARE NOT ON THE AO / CIT(A)'S RECORDS. HOWEVER IT IS SUBMITTED THAT THESE DOCUMENTS ARE IMPORTANT AND RELEVANT TO DECIDE THE APPEALS. 5. THE APPELLANT REQUESTS THAT IN THE INTEREST OF J USTICE, THE SUBJECT DOCUMENTS MAY KINDLY BE ADMITTED AS ADDITIONAL EVID ENCE AND CONSIDERED WHILE DECIDING THE APPEALS. 8. DURING THE PROCEEDINGS, SHRI SUNIL PATHAK, LD. COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE CORRESPONDENCE , THE ASSESSEE HAD TAKEN WITH THE COLLECTOR, PUNE, TOWN PLANNER ETC. AND INFOR MED THAT ITA NOS.224 & 225/PUN/2014 C.P. SETHUMADHAVAN 6 CERTAIN PAPERS WERE OBTAINED UNDER THE RIGHT TO INFORMA TION ACT, 2005 FROM THE STATE GOVERNMENT AUTHORITIES WITH REGARD TO TH E COMPLETION CERTIFICATE. BRINGING OUR ATTENTION TO THESE ADDITIONAL EVIDE NCES, HE SUBMITTED THAT THE GRAM PANCHAYAT DID NOT HAVE RIGHT T O GRANT COMPLETION CERTIFICATE (PAGE NO.1 OF THE PAPER BOOK). HE ALSO SUBMITTED THAT THE SAID GRAM PANCHAYAT, MAHALUNGE VILLAGE HAS NEVER ISSUED ANY COMPLETION CERTIFICATE DURING THE PERIOD FROM 01-04-2005 T O 31-03-2010. REFERRING TO PAGE NO.3 OF THE PAPER BOOK, LD. COUNSEL FOR T HE ASSESSEE SUBMITTED THAT THE COMMENCEMENT CERTIFICATE WAS ISSUED B Y THE COLLECTOR VIDE LETTER DATED 06-07-2005 AND 26-03-2007. COPY OF T HE APPLICATION SEEKING COMPLETION CERTIFICATE FROM THE GRAM PANCHAYAT IS A LSO ENCLOSED. LD. COUNSEL FOR THE ASSESSEE ALSO BROUGHT OUR ATTENTION TO THE FACT OF SEEKING COMPLETION CERTIFICATE FROM THE COLLECTOR, PUNE WITH R EGARD TO HIS BUILDING. COPY OF THE COMPLETION CERTIFICATE AS GRANTED BY THE ARCHITECT IS ALSO ENCLOSED. BRINGING OUR ATTENTION TO PAGE NO.12 OF THE PAPER BOOK, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT APPLICATIONS M ADE BY THE ASSESSEE TO THE ASSISTANT DIRECTOR, TOWN PLANNING, PUNE W AS FOUND FORWARDED TO THE COLLECTOR FOR NECESSARY ACTION AND ISSU ANCE OF COMPLETION CERTIFICATE. NEITHER THE GRAM PANCHAYAT NOR TH E ASSISTANT DIRECTOR, TOWN PLANNING, PUNE ARE ISSUING ANY CERTIFICATES IN REPLYING TO HIS APPLICATIONS FILED TO THE AUTHORITIES FROM TIME TO TIME. FOR NO MISTAKE OF THE ASSESSEE, DENIAL OF DEDUCTION U/S.80IB(10) IS NOT PROPER. 9. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THESE PAPERS/ADDITIONAL EVIDENCES MAY BE ADMITTED AND THE ISSUE MAY BE REMANDED TO THE LOWER AUTHORITIES FOR EXAMINING THE FACTS AND EXPECTATION OF THE REVENUE AUTHORITIES IN ASKING THE ASSE SSEE THE IMPOSSIBILITY MAY BE VERIFIED BY THEM BEFORE DENYING THE CLAIM OF DEDUCTION. HE SUBMITTED THAT WHEN THE PROJECT IS OTHER WISE COMPLETED IN ITA NOS.224 & 225/PUN/2014 C.P. SETHUMADHAVAN 7 ALL RESPECT, THE FLAT BUYERS TOOK THE POSSESSION OF THE SA ID FLATS AND WHEN THERE ARE NO COMPLAINTS WHATSOEVER ON THE ASPECTS OF C OMPLETION OF THE HOUSING PROJECT, THE DENIAL OF DEDUCTION FOR WANT OF A CER TIFICATE IS UNJUSTIFIED AND UNSUSTAINABLE IN LAW. ASSESSEES AUTHORISE D REPRESENTATIVE SOUGHT A DIRECTION TO THE AO IN THIS REGARD. 10. PER CONTRA, LD. DR FOR THE REVENUE BROUGHT OUR ATT ENTION TO PAGE NO.328 OF THE PAPER BOOK GRANTING SANCTION TO REVISED LAY OUT AND SUBMITTED THAT AS PER ITEM NO.17 OF THE APPROVAL LETTER OF THE COLLECTOR, PUNE DISTRICT, THE APPLICANT IS UNDER OBLIGATION TO TAKE COM PLETION CERTIFICATE FROM THE ASSISTANT DIRECTOR, TOWN PLANNING, PUNE AFTER COMPLETION OF THE CONSTRUCTION. FURTHER, LD. DR SUBMITTED THAT THE ASSESSEE NEVER APPROACHED THE ASSISTANT DIRECTOR, TOWN PLANNING FOR SUCH A CERTIFICATE. THEREFORE, DESPITE SPECIFIC INSTRUCTION FR OM THE COLLECTOR, PUNE, THE ASSESSEE NEVER APPROACHED THE CORR ECT AUTHORITIES FOR ISSUANCE OF THE COMPLETION CERTIFICATE AS REQUIRED UNDER THE LAW. 11. IN REPLY TO THE ARGUMENTS OF LD. DR, LD. COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE SAID ADDITIONAL EVIDENCES A ND SUBMITTED THAT IT IS UNFORTUNATE THAT THE TOWN PLANNING NEVER RECE IVES SUCH DOCUMENTS FOR ISSUING SUCH COMPLETION CERTIFICATES AND THE SAME IS EVIDENT FROM THE REPLIES RECEIVED FROM THE SAID ASSISTANT, D IRECTOR, TOWN PLANNING, PUNE BY THE ASSESSEE. THE REQUEST LETTERS FOR COMPLETION CERTIFICATES WERE FOUND FORWARDED TO THE COLLECTOR OFFICE WHO MERELY IGNORES THE CORRESPONDENCE WITHOUT SAYING YES OR NO TO THE REQUEST OF THE ASSESSEE. 12. WE HEARD BOTH THE PARTIES ON THE LIMITED ISSUE OF IS SUANCE OF COMPLETION CERTIFICATE BY THE LOCAL AUTHORITY (LA) AND THE FA TE OF THE ASSESSEES APPLICATION FOR COMPLETION CERTIFICATE ADDRESSED TO THE ITA NOS.224 & 225/PUN/2014 C.P. SETHUMADHAVAN 8 ASSISTANT DIRECTOR, TOWN PLANNING OR/AND TO THE OFFICE OF TH E DISTRICT COLLECTOR, PUNE. THE STATUTE IS VERY CLEAR THAT THE LA/VILLA GE GRAM PANCHAYAT IS ENTITLED TO ISSUE SUCH CERTIFICATE AND THE SA ME IS AUTHENTICATED BY THE ORDER OF THE TRIBUNAL IN THE CASE O F M/S. SATISH BORA AND ASSOCIATES VS. ACIT IN ITA NOS. 713 AND 714/P N/2010 FOR A.YRS. 2004-05 AND 2005-06, ORDER DATED 07-01-2011. AS PER THE CORRESPONDENCE OF THE ASSESSEE WITH THE DISTRICT COLLECT OR, PUNE, IT HAS GONE ON RECORD OF THE DISTRICT COLLECTOR THAT IT IS THE AS SISTANT DIRECTOR, TOWN PLANNING, PUNE WHO IS AUTHORIZED TO ISSUE THE COMPLET ION CERTIFICATE IN THIS SPECIFIC CASE OF THE ASSESSEE. BUT THE SAME IS NOT IN TUNE WITH THE PROVISIONS OF INCOME TAX ACT. NOTWITHSTAND ING THE SAME, NEITHER THE VILLAGE GRAM PANCHAYAT (LOCAL AUTHORITY) NOR THE ASSISTANT DIRECTOR, TOWN PLANNING, PUNE, NOR THE COLLECTOR OF THE DIST RICT RESPONDED POSITIVELY TO THE REQUEST LETTERS OF THE ASSE SSEE. THIS BEING THE BUREAUCRATIC RESPONSE TO THE LEGITIMATE DEMAND OF THE AS SESSEE FOR THE ISSUE OF COMPLETION CERTIFICATE, IT NEEDS TO BE RECONSIDERED IF THE AO IS JUSTIFIED IN DENYING DEDUCTION U/S.80IB(10) OF THE ACT IN RES PECT OF THE OTHERWISE, ELIGIBLE PROFITS OF THE HOUSING PROJECT OF THE ASSE SSEE. IT IS RELEVANT TO MENTION THAT THE PROJECT WAS COMPLETED IN A LL RESPECT. NEITHER THE LOCAL GOVERNMENT NOR THE FLAT OWNERS NOR THE DISTRICT COLLECTOR-CUM-ASST. DIRECTOR, TOWN PLANNING HAVE ANY COMPLA INTS ON THE ISSUE OF DATE OF COMPLETION OF THE HOUSING PROJECT. THE FLAT BUYERS HAVE ALREADY OCCUPIED THE FLATS (COPIES OF POSSESSION LETTERS ARE PLACED IN THE PAPER BOOK) WITHOUT HAVING ANY ILLEGALITIES ASSOCIATED WITH T HE PROJECT QUA THE CONSTRUCTION OF THE PROJECT ARE ON RECORDS OF THE LOCAL AUTHORITY OR THE DISTRICT COLLECTOR. 13. IN THESE CIRCUMSTANCES, WE ARE OF THE OPINION THAT T HESE PAPERS/ADDITIONAL EVIDENCES FILED BY THE ASSESSEE BEFORE US ARE REQUIRED ITA NOS.224 & 225/PUN/2014 C.P. SETHUMADHAVAN 9 TO BE ADMITTED AS THE SAME ARE OBTAINED BY THE ASSESS EE IN THE PERIOD SUBSEQUENT IN TIME UNDER THE RIGHT TO INFORMATION ACT, 20 05. THEREFORE, CONSIDERING THE PRINCIPLES OF NATURAL JUSTICE, WE ARE OF THE OPINION THAT THESE PAPERS SHOULD BE REMANDED TO THE FILE OF THE AO FOR CONSIDERING THE SAME AND DECIDE THE ISSUE BASED ON THE FACTS RELATING TO THE ISSUE OF COMPLETION CERTIFICATE. AO SHALL GRANT REASONABLE OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH SET PRINCIPLES OF NATURAL JUSTICE. AO SHALL ALSO CONSIDER, THE RATIO OF THE JUDGMENTS/DECISION OF THE TRIBUNAL (SUPRA) RELIED UPON BY THE LD. COUNSEL FOR THE AS SESSEE AND ALLOW THE CLAIM OF DEDUCTION IF THE SAID DECISIONS ARE APPLICAB LE TO THE FACTS OF THE PRESENT CASE. AO IS DIRECTED TO PASS A SPE AKING ORDER WITH SPECIAL REFERENCE TO THE COMPLETION CERTIFICATE ON THE PECU LIAR FACTS OF THE INSTANT CASE AS WELL AS THE JUDGMENTAL LAW ON THE SUBJECT. 14. BEFORE PARTING WITH THIS ORDER, WE FIND IT RELEVANT TO M AKE A MENTION THAT THE PROVISIONS OF ITEM (II) TO THE EXPLANATION TO CLAUSE (A) OF SECTION 80IB(10) OF THE ACT SPECIFIES THE FOLLOWING : 80IB(10) . . . . . EXPLANATION FOR THE PURPOSES OF THIS CLAUSE :- (I) . . . . . . . (II) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSI NG PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CERTIF ICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY ... THE ABOVE PROVISION IS CATEGORICAL IN SPECIFYING THE LOCAL AUTHORITY AS THE ISSUING AUTHORITY OF THE COMPLETION CERTIFICAT E IN RESPECT OF A HOUSING PROJECT . WHEREAS, IN THE INSTANT CASE, THE DIRECTION OF THE DISTRICT COLLECTOR VIDE ITEM NO.17 (SUPRA) TO THE ASSESSEE INCLUDES T HE ASSISTANT DIRECTOR, TOWN PLANNING, PUNE SHALL ISSUE THE REQUISITE COMPLE TION CERTIFICATE. THIS DIRECTION IS NOT IN TUNE WITH THE SAID PROV ISIONS OF THE ACT. THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S. SATIS H BORA AND ITA NOS.224 & 225/PUN/2014 C.P. SETHUMADHAVAN 10 ASSOCIATES VS. ACIT (SUPRA) AFFIRMS THE SAME. THEREFORE, THE RE IS REQUIREMENT OF BRINGING THE DIRECTION OF THE DISTRICT COLLECTOR IN TUNE W ITH THE ABOVE PROVISIONS OF THE INCOME-TAX ACT. UNLESS NECE SSARY CORRECTIONS ARE MADE IN THE PROCEDURES, THE TAX PAYERS WILL CONTINUE TO SUFFER DUE TO THE PROCEDURAL HARDSHIPS. HENCE, PRINCIPAL CIT/AO MAY CO NSIDER TAKING UP THIS MATTER WITH THE CONCERNED STATE AUTHORITIES AND BRING OUT CLARITY IN THE PROCEDURES QUA THE ISSUANCE OF COMPLETION CERTIFICA TE. FURTHER, SPECIFIC TO THE FACTS OF THIS CASE, AO MAY ALSO CONSIDER REC ONSIDER THE AOS DECISION OF REJECTION OF THE CLAIM OF THE ASSESSEE I N VIEW OF THE FACT OF COMPLETION OF THE HOUSING PROJECT UNDISPUTEDLY, AND LOOK ING BEYOND THE LITERAL MEANING OF THE EXPRESSIONS USED IN THE STATUTE . ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE FOR BOTH THE ASSES SMENT YEARS ARE ALLOWED FOR STATISTICAL PURPOSES. 15. IN THE RESULT, APPEALS OF THE ASSESSEE FOR BOTH THE ASSESSMENT YEARS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF DECEMBER, 2017. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 13 TH DECEMBER, 2017. / COPY OF THE ORDER FORWARDED TO : BY ORDER // TRUE COPY // //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE THE APPELLANT THE RESPONDENT THE CIT(A) - II , PUNE CIT - II , PUNE % , , A BENCH PUNE; / GUARD FILE.