DCIT CEN CIR 1, THANE V. PURANIK BUILDES P.LTD, THANE

ITA 385/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3738 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2007-2008
• Appeal Filed On: 15-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SATHYA MOORTHY
• Keywords: Retrospective amendment
• Section: 80IB; 147; 10

Judgement Text

, INCOME-TAX APPELLATE TRIBUNAL -EBENCH MUMBAI , . . , BEFORE S/SH.RAJENDRA,ACCOUNTANT MEMBER AND C.N. PRA SAD,JUDICIAL MEMBER ./ITA.S./385-386/MUM/2015, /ASSESSMENT YEAR: 2007-08,2008-09 DCIT-CIRCLE-2 ROOM NO.13, A-WING, 6 TH FLOOR, ASHAR IT PARK,WAGLE INDL ESTATE, THANE-(W)-400 064 VS. M/S. PURANIK BUILDERS PVT. LTD. PURANIK-ONE, KANCHAN PUSHPA, OPP. SURAJ WATER PARK, NEXT TO CORAL SQUARE BUILDING, KAVESAR,GB ROAD, THANE(W)-400615. PAN:AABCP 0109 R REVENUE BY: SHRI N. SATHYA MOORTHY -DR ASSESSEE BY: NONE / DATE OF HEARING: 21.07.2016 / DATE OF PRONOUNCEMENT: 03.08.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDERS,DATED 25/06/2014,OF THE CIT( A)-I,THANE THE ASSESSING OFFICERS(AO.S)HAVE FILED THE APPEALS FOR THE ABOVE- MENTIONED AY.S.ASSESSEE- COMPANY IS A BUILDER AND DEVELOPER. THE DETAILS OF THE DATES OF FILING OF RETURNS OF INCOME, RETURNED INCOMES AND ASSESSED INCOMES,ETC. CAN BE SUMMARISED AS UNDER: A.Y. ROI FILED ON RETURNED INCOME(RS.) ASSESSMENT DT. ASSESSED INCOME(RS.) DT. OF ORDERS OF CIT(A) 2007-08 30.10.2007 57,95,050/- 28.03.2013 2,15,82,5 68/- 25.06.2014 2008-09 24.09.2008 15,69,349/- 28.03.2013 1,50,63,0 43/- 25.06.2014 ITA/385/MUM/2015,AY:2007-08 2. FIRST GROUND OF APPEAL IS ABOUT HOLDING THAT THE NO TICE ISSUED BY THE AO U/S.148 OF THE ACT WAS VOID. IN THIS CASE THE ORIGINAL ASSE SSMENT WAS COMPLETED U/S.143 (3) OF THE ACT DETERMINING THE INCOME OF THE ASSESSEE A T RS.60.76 LAKHS.WHILE COMPUT - ING THE ASSESSMENT,THE AO HAD ALLOWED DEDUCTION CLA IMED BY THE ASSESSEE U/S.80 IB(10),AMOUNTING TO RS.1.57 CRORES.LATER ON,A NOTIC E U/S.148 OF THE ACT,DATED 25/05/2012,WAS ISSUED.WHILE COMPUTING THE ASSESSMEN T U/S.143 (3) R.W. S. 147 OF 385-386/M/15 PURANIK BUILDERSPL 2 THE ACT,THE AO DISALLOWED THE CLAIM,U/S.80 IB(10)OF THE ACT,THAT WAS ALLOWED IN THE ORIGINAL ASSESSMENT. 3. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA) AND CHALLENGED THE VALIDITY OF REOPENING.AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE,THE FAA HELD THAT THE NOTICE U/S.148 FOR THE YEAR UNDER CONSIDERATION WAS ISSUED AFTER FOUR YEARS FROM THE END OF THE AY. UNDER APPEAL,THAT IN TERMS OF PROVISIONS OF FIRST P ROVISO TO SECTION 147 OF THE ACT, THE ASSESSMENT IN THE ASSESSEES CASE COULD HAVE BE EN REOPENED AFTER A PERIOD OF FOUR YEARS (AFTER 01/04/2012) ONLY IF IT COULD BE E STABLISHED THAT IS THE INCOME HAD ESCAPED ASSESSMENT BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ITS ASSE SSMENT,THAT NO SUCH FAILURE ON PART OF THE ASSESSEE HAD BEEN BROUGHT OUT BY THE AO IN H IS NOTICE U/S.148 OF THE ACT. HE REPRODUCED THE NOTICE ISSUED BY THE AO AND HELD THA T IN ABSENCE OF THE FAILURE OF THE ASSESSEE,THE NOTICE ISSUED BY THE AO WAS WITHOU T JURISDICTION,THAT THE ASSESSMENT ORDER PASSED IN PURSUANCE OF THE NOTICE WAS VOID AND WAS LIABLE TO BE CANCELLED. HE DECIDED THE ISSUE IN FAVOUR OF THE AS SESSEE ON MERITS ALSO. 4. DURING THE COURSE OF HEARING BEFORE US, THE DEPARTM ENTAL REPRESENTATIVE(DR) LEFT THE ISSUE TO THE DISCRETION OF THE BENCH.NONE APPEARED ON BEHALF OF THE ASSESSEE, AS STATED EARLIER. WE HAVE GONE THROUGH THE NOTICE ISSUED BY THE AO U/ S.148 OF THE ACT. WE FIND THAT THE FAA HAS RIGHTLY OBSERVED THAT THE AO IS SILENT ABOUT FAILURE OF THE ASSESSEE FOR NOT DISCLOSING FULLY AND TRULY THE MATERIAL FACTS.I N OUR OPINION, WITHOUT ESTABLISHING THE FAILURE OF THE ASSESSEE REOPENING NOTICE CANNOT BE ISSUED AFTER A PERIOD OF FOUR YEARS.ON THE ISSUE,IN THE CASE OF SABHARWAL PROPERT IES INDUSTRIES (P.)LTD.(382ITR 547),THE HONBLE DELHI HIGH COURT HAS HELD AS UNDER : 385-386/M/15 PURANIK BUILDERSPL 3 IT IS WELL-SETTLED THAT THE REASONS RECORDED FOR RE OPENING THE ASSESSMENT HAVE TO SPEAK FOR THEMSELVES. THEY HAVE TO SPELL OUT THAT THERE W AS A FAILURE OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS NECESSARY FO R THE ASSESSMENT AND THE REASONS MUST PROVIDE A LIVE LINK TO THE FORMATION OF THE BELIEF THAT INCOME HAD ESCAPED ASSESSMENT. RESPECTFULLY,FOLLOWING THE ABOVE JUDGMENT,WE HOLD T HAT THE ORDER OF THE FAA IS NOT SUFFERING FROM ANY LEGAL INFIRMITY.SO,UPHOLDING HIS ORDER,WE DECIDE THE JURISDICTIONAL ISSUE AGAINST THE AO.THE ORDER PASSE D BY THE AO WAS ILLEGAL AND HENCE,WAS RIGHTLY QUASHED BY THE FAA. AS WE HAVE ALREADY HELD THAT THE ORDER PASSED BY TH E AO WAS NOT LEGAL,THEREFORE, WE ARE NOT ADJUDICATING THE OTHER ISSUES RAISED BY HIM. ITA/386/MUM/2015,AY-2008-09: 5. THE EFFECTIVE GROUND OF APPEAL IS ABOUT ALLOWING TH E CLAIM MADE BY THE ASSESSEE U/S.80IB(10) IN RESPECT OF HOUSING PROJECT KAVYADHA RA.DURING THE ASSESSMENT PROCEEDINGS THE AO FOUND THAT DURING THE ASSESSMENT PROCEEDINGS,THE AO FOUND THAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S. 80IB F OR KAVYADHARA PROJECT (KP).THE AO CALLED FOR VARIOUS DETAILS IN THAT REGARD AND RE CORDED THE STATEMENT OF THE ARCHITECT ON 2.12.2011 TO ASCERTAIN THE FACTS REGAR DING SANCTION OF DEVELOPMENT PERMISSION,COMMENCEMENT CERTIFICATE ETC. , PERTAINI NG TO VARIOUS HOUSING PROJECTS UNDERTAKEN BY THE ASSESSEE.HE ALSO MADE ENQUIRY WIT H THANE MUNICIPAL CORPORA - TION(TMC).HE OBSERVED THAT THE DEVELOPMENT PERMISSI ON FOR THE PROJECT KAVYADHARA WAS RECEIVED VIDE LETTER DT. 16.1.2003, THAT THE COMMENCEMENT CERTIFY -CATE WAS ISSUED VIDE LETTER DT.9.3.2004, THAT THE PLAN WAS SUBSEQUENTLY AMENDED VIDE SANCTION LETTER DT.4.1.2007.HE FOUND THAT THE OCCUPANCY CERTIFICATES (OC)IN RESPECT OF VARIOUS BUILDINGS AS PER THE FINAL PLAN WERE RECEIVED ON DIFFERENT DATES. HE HELD THAT THE SANCTION FOR DEVELOPMENT PERMISSIO N OF KP WAS FIRST RECEIVED ON 16.1.2003,THAT THE PROJECT WAS REQUIRED TO BE COMPL ETED ON OR BEFORE 31.3.2008, AS 385-386/M/15 PURANIK BUILDERSPL 4 PER THE PROVISIONS OF SECTION 80IB(10)(A)(I).AFTER DELIBERATING UPON THE PROCEDURE FOR OBTAINING OC,THE AO OBSERVED THAT AS PER THE BU ILDING PLANS AND OC OF BUILDING A-1 , C-3, C-4 AND CLUB HOUSE WERE NOT COM PLETED BY 31.3.2008, THAT OCS IN RESPECT OF THREE BUILDINGS WERE RECEIVED ON 10.12. 2008,THAT THE OC IN RESPECT OF BUILDING A-2 WAS RECEIVED ON 31.5.2008, THAT THE CONDITIONS LAID DOWN IN SECTION 80IB(10) WERE NOT FULFILLED.HE CALLED FOR E XPLANATION OF THE ASSESSEE IN THAT REGARD.CONSIDERING THE ABOVE FACTS,THE AO HELD THAT THE ASSESSEE HAD NEITHER APPLIED TO THE TMC FOR THE ISSUE OF OC ON OR BEFOR E 31.3.2008 NOR HAD IT COMPLETED THE HOUSING PROJECT BEFORE THE SPECIFIED TIME LIMIT, THAT THERE WAS NO DELAY ON PART OF THE TMC,THAT THE ASSESSEE ITSELF H AD APPLIED FOR THE OC AFTER THE DUE DATEI.E.31.3.2008.FINALLY,HE HELD THAT ASSESSEE WAS NOT ENTITLED FOR DEDUCTION IN RESPECT OF KP. 6. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREF ERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA). BEFORE HIM, ELABOR ATE SUBMISSIONS WERE MADE. FOLLOWING THE ORDER FOR THE SUBSEQUENT YEAR THE FAA ALLOWED THE APPEAL FILED BY THE ASSESSEE. 7. DURING THE COURSE OF HEARING BEFORE US, THE DEPARTM ENTAL REPRESENTATIVE (DR) SUPPORTED THE ORDER OF THE AO STATED THAT THE OC WA S OBTAINED AFTER 31.3.2008, THAT THE ASSESSEE FAILED TO COMPLY WITH ALL THE CONDITIO N OF THE AMENDED PROVISIONS. NONE APPEARED ON BEHALF OF THE ASSESSEE,AS STATED E ARLIER. 8. WE FIND THAT,WHILE DEALING WITH THE SIMILAR ISSUE,T HE TRIBUNAL HAS (ITA/ 4612/ MUM/2013,AY.2009-10)HELD AS UNDER: 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT THE BASIC ISSUE TO BE DECIDE IN THE CASE UNDER CONS IDERATION IS AS TO WHETHER THE AMENDED 385-386/M/15 PURANIK BUILDERSPL 5 PROVISIONS WOULD BE APPLICABLE FOR THE PROJECTS THA T WERE APPROVED BEFORE 1.4.2005.THE AO HAD HELD THAT OC WAS RECEIVED BY THE ASSESSEE AF TER THE DUE DATE I.E.31.3.2008 IN CASE OF KP AND THEREFORE, THE ASSESSEE WAS NOT ENTI TLED TO CLAIM DEDUCTION U/S. 80IB(10). THE FAA HELD THAT AMENDED PROVISIONS WERE NOT APPLI CABLE TO KP. WE FIND THAT THE HONBLE M.P. HIGH COURT IN THE CAS E OF (379 ITR 107) GLOBAL REALITY HAS DEALT THE ISSUE EXTENSIVELY.FACTS OF THE CASE W ERE THAT THE AO HAD DISALLOWED THE CLAIM OF THE ASSESSEE U/S.80-IB(10) ON THE FINDING THAT IN SPITE OF REPEATED OPPORTUNITY GIVEN TO THE ASSESSEE DURING THE COURSE OF ASSESSME NT PROCEEDINGS, THE COMPLETION CERTIFICATE WAS NOT PRODUCED BEFORE 31.03.2008. FUR THER, A LETTER WAS ISSUED BY THE MUNICIPAL CORPORATION DATED 18.12.2008, PURSUANT TO THE ENQUIRY MADE IN THAT BEHALF STATING THAT COMPLETION CERTIFICATE HAD NOT BEEN IS SUED TO THE ASSESSEE TILL THAT DATE AND THAT THE APPLICATION OF THE ASSESSEE WAS STILL BEIN G PROCESSED. ON THESE FACTS THE ASSESSING OFFICER PROCEEDED TO COMPLETE THE ASSESSM ENT PROCEEDINGS AND DISALLOWED THE DEDUCTION CLAIMED BY THE ASSESSEE FOR THE ASSESSMEN T YEARS 2005-06 TO 2007-08. THE COMPLETION CERTIFICATE ISSUED BY THE LOCAL AUTHORIT Y WAS OF SUBSEQUENT DATE AND NOT ISSUED WITHIN THE STIPULATED DATE. THE TRIBUNAL ALLOWED TH E CLAIM. ALLOWING THE APPEAL FILED BY THE DEPARTMENT,THE HONBLE COURT HELD AS UNDER: ACCORDING TO THE UNAMENDED CLAUSE (A) OF SECTION 8 0-IB(10) OF THE INCOME-TAX ACT, 1961, AS WAS IN FORCE PRIOR TO APRIL 1, 2005, THE A SSESSEE WAS ENTITLED TO DEDUCTION OF PROFITS IN THE CASE OF HOUSING PROJECTS APPROVED BE FORE MARCH 31, 2005, BY THE LOCAL AUTHORITY. THE ONLY CONDITION IN CLAUSE (A), AT THE RELEVANT TIME, WAS THAT THE DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT HAD COMMENC ED OR COMMENCES ON OR AFTER OCTOBER 1, 1998. THIS STIPULATION HAS BEEN MODIFIED BY AMENDMENT TO CLAUSE (A). ACCORDING TO THE AMENDED CLAUSE (A), THE HOUSING PR OJECT APPROVED BEFORE MARCH 31, 2007 BY A LOCAL AUTHORITY WOULD RECEIVE THE BENEFIT OF DEDUCTION PROVIDED THE DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT HAS COMMENCED OR COMMENCES ON OR AFTER OCTOBER 1, 1998, AND IS COMPLETED WITHIN A SPECIFIED TIME. HOUSING PROJECTS APPROVED BY THE LOCAL AUTHORITY BEFORE APRIL 1, 200 4 MUST BE COMPLETED BEFORE MARCH 31, 2008 AND THE HOUSING PROJECT APPROVED ON OR AFTER A PRIL 1, 2004 BUT BEFORE MARCH 31, 2007, SHOULD BE COMPLETED WITHIN FOUR YEARS FROM TH E END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT WAS APPROVED BY THE LOCAL AUTHO RITY. THE AMENDMENT FURTHER 385-386/M/15 PURANIK BUILDERSPL 6 POSTULATES THAT THE DATE OF COMPLETION OF CONSTRUC TION OF THE HOUSING PROJECT SHALL BE RECKONED ON THE BASIS OF THE DATE ON WHICH THE CO MPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY. CLAUSE (A) AS AMENDED, STRICTO SENSU, CANNOT BE CON SIDERED AS A NEW CONDITION AND THAT TOO INCAPABLE OF COMPLIANCE INASMUCH AS CLAUSE (A) DEALS WITH THE TIME FRAME WITHIN WHICH THE HOUSING PROJECT WAS EXPECTED TO BE COMPLE TED, TO GET THE BENEFIT OF THE PRESCRIBED DEDUCTION. THE AMENDED SECTION 80-IB(10) (A) EXTENDS THE BENEFIT EVEN TO HOUSING PROJECTS APPROVED BY THE LOCAL AUTHORITY BE FORE MARCH 31, 2007, INSTEAD OF MARCH 31, 2005, AS WAS PROVIDED IN THE UNAMENDED PR OVISION. THEREFORE, THE NECESSITY WAS FELT TO MAKE A DISTINCTION BETWEEN THE TWO CLAS SES OF HOUSING PROJECTS FOR SPECIFYING THE TIME FRAME FOR COMPLETION. THE ONE APPROVED BY THE LOCAL AUTHORITY BEFORE APRIL 1, 2004 AND THE OTHER CLASS OF HOUSING PROJECT APPROVE D BY THE LOCAL AUTHORITY ON OR AFTER APRIL 1, 2004 TILL MARCH 31, 2007. IN EITHER CASE, THE TIME FRAME FOR COMPLETION OF THE PROJECT HAS BEEN PRESCRIBED AS FOUR YEARS. IN THAT, THE PROJECT APPROVED BEFORE APRIL 1, 2004 HAS BEEN GIVEN TIME TO COMPLETE BEFORE MARCH 3 1, 2008 AND IN THE LATTER CATEGORY WITHIN FOUR YEARS FROM THE END OF THE FINANCIAL YEA R IN WHICH THE HOUSING PROJECT WAS APPROVED BY THE LOCAL AUTHORITY. THE MUNICIPAL LAWS OF DIFFERENT STATES IN RESPECT O F PROCEDURE FOR ISSUANCE OF COMPLETION CERTIFICATE ARE NOT UNIFORM. TO WIT, IN SOME STATES, THE DISPENSATION PROVIDED IS TO ISSUE PARTIAL OR FULL OCCUPATION CER TIFICATE ; AND, THEREAFTER, COMPLETION CERTIFICATE AFTER REMOVAL OF ALL THE DEFICIENCIES P OINTED OUT BY THE LOCAL AUTHORITY IS ISSUED. IN SOME STATES, THE MUNICIPAL LAW MAY PROVI DE FOR ISSUING PARTIAL OR FULL COMPLETION CERTIFICATE. THE REQUIREMENT OF COMPLETI ON CERTIFICATE ISSUED BY THE LOCAL AUTHORITY, AS ENVISAGED IN SECTION 80-IB(10)(A) , W HICH IS A CENTRAL ENACTMENT DEALING WITH THE SPECIAL SUBJECT OF TAXATION, HOWEVER, IS, OF ONLY ONE CERTIFICATEWHICH IS FULL COMPLETION CERTIFICATE ISSUED BY THE LOCAL AUTHORIT Y BEFORE THE CUT-OFF DATE. THAT IS TO LEND CREDENCE TO THE FACTUM OF COMPLETION OF THE EN TIRE HOUSING PROJECT IN ALL RESPECTS ACCORDING TO THE APPROVAL GRANTED BY THE LOCAL AUTH ORITY. THE LEGISLATURE WAS CONSCIOUS OF THIS POSITION, FOR WHICH, EXPRESS PROV ISION HAS BEEN MADE AS TO THE MEANING OF THE DATE OF COMPLETION OF THE HOUSING PR OJECT LINKED TO THE DATE ON WHICH 385-386/M/15 PURANIK BUILDERSPL 7 COMPLETION CERTIFICATE IS ISSUED BY THE LOCAL AU THORITY, AS PREDICATED IN EXPLANATION (II) THEREUNDER. THE SUPREME COURT DECISIONS IN THE CASE OF VEENA DE VELOPERS AND SARKAR BUILDERS WILL HAVE TO BE UNDERSTOOD ONLY IN THE CON TEXT OF A NEW CONDITION STIPULATED REGARDING THE BUILT-UP AREA OF THE PROJE CT BY WAY OF AMENDMENT, WHICH THE ASSESSEE COULD NOT HAVE COMPLIED WITH AT ALL, AND E VEN THOUGH THE CONSTRUCTION OF THE HOUSING PROJECT WAS OTHERWISE IN FULL COMPLIANCE WI TH ALL CONDITIONS SET OUT IN THE APPROVAL GIVEN BY THE MUNICIPAL AUTHORITY AS PER TH E RELEVANT RULES IN THAT BEHALF. ..IT WAS NOT A CASE OF IMPOSING A NEW CONDITION, MUCH LESS, WITH RETROSPECTIVE EFFECT UNLIKE INTRODUCTION OF NEW CONDITION IN THE SHAPE OF CLAUSE (D), WHICH OBVIOUSLY COULD BE APPLIED ONLY PROSPECTIVELY. CLAUSE (A) STA NDS ON A COMPLETELY DIFFERENT PEDESTAL. IT CANNOT BE TREATED AS A NEW CONDITION L INKED TO THE APPROVAL AND CONSTRUCTION OR HAVING RETROSPECTIVE EFFECT AS SUCH . FOR, IT GIVES AT LEAST FOUR YEARS TIME TO BOTH CLASSES OF HOUSING PROJECTS : HOUSING PROJECTS APPROVED PRIOR TO APRIL 1, 2004 AND AFTER APRIL 1, 2004. THE FOUR YEAR PERIOD OBVIOUSLY HAS PROSPECTIVE EFFECT, ALBEIT LIMITING THE PERIOD FOR COMPLETION OF THE PR OJECT, TO AVAIL OF THE BENEFIT. FOUR YEARS TIME FOR COMPLETION OF THE PROJECT, BY NO ST ANDARDS, COULD BE SAID TO BE UNREASONABLE, HARSH, ABSURD OR INCAPABLE OF COMPLIA NCE. IT WAS ALSO NOT A CASE OF WITHDRAWAL OF VESTED RIGHT OF THE DEVELOPER, AS SUC H. NO DEVELOPER CAN CLAIM A VESTED RIGHT TO COMPLETE THE HOUSING PROJECT IN AN INDEFIN ITE PERIOD. THE RIGHT ARISING FROM SECTION 80-IB , IS COUPLED WITH THE OBLIGATION OR D UTY TO COMPLETE THE PROJECT IN THE SPECIFIED TIME FRAME. IF THE DEVELOPER DOES NOT COM PLETE THE HOUSING PROJECT WITHIN THE SPECIFIED TIME, WILL NOT RECEIVE THAT BENEFIT. THER E IS NO COMPULSION ON HIM TO COMPLETE THE PROJECT IN FOUR YEARS. EVEN THE APPROV ALS TO THE CONSTRUCTION OF HOUSING PROJECT GRANTED BY THE LOCAL AUTHORITY SPECIFY THE DATE WITHIN WHICH THE CONSTRUCTION MUST BE COMPLETED, AS PER THE TIME FRAME SPECIFIED IN THE PERMISSION. IF THE PROJECT IS NOT COMPLETED WITHIN THE STIPULATED TIME, THE DEVEL OPER IS FREE TO GET THAT PERIOD RENEWED OR EXTENDED FROM THE LOCAL AUTHORITY AS PER THE APPLICABLE RULES AND REGULATIONS. THE PROVISION FOR CLAIMING TAX DEDUCTI ON FROM PROFITS, CAN CERTAINLY PRESCRIBE REASONABLE CONDITIONS AND MORE SO A TIME FRAME FOR COMPLETION OF THE PROJECT, IN THE LARGER PUBLIC INTEREST. NO COMPARIS ON CAN BE DRAWN BETWEEN THE NEW 385-386/M/15 PURANIK BUILDERSPL 8 CONDITION PRESCRIBED IN TERMS OF CLAUSE (D) AND THA T OF CLAUSE (A). THE CONDITION IN CLAUSE (A), NEITHER OPERATES RETROSPECTIVELY NOR CA N BE SAID TO BE ABSURD, UNJUST OR EXPECTING THE ASSESSEE TO COMPLY WITH SOMETHING WHI CH IS IMPOSSIBLE TO ACHIEVE. (II) THAT CONSIDERING THE PRODIGIOUS BENEFIT OFFERE D IN TERMS OF SECTION 80-IB TO THE ASSESSEE (HUNDRED PER CENT. OF THE PROFITS DERIVED IN ANY PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR) AND THE PURPOSE UNDERLYING IT WH ICH IS, INTER ALIA, A BURDEN ON THE PUBLIC EXCHEQUER DUE TO WAIVER OF COMMENSURATE REVE NUETHE STIPULATION FOR OBTAINING COMPLETION CERTIFICATE FROM THE LOCAL AUT HORITY BEFORE THE CUT-OFF DATE, MUST BE CONSTRUED AS MANDATORY. THE FACT THAT COMPLIANCE WITH THAT CONDITION IS DEPENDENT ON THE MANNER IN WHICH THE PROPOSAL IS PROCESSED BY THE LOCAL AUTHORITY, THE PROVISION CANNOT BE CONSTRUED AS A DIRECTORY REQUIREMENT. IT IS A SUBSTANTIVE PROVISION MANDATING ISSUANCE OR GRANT OF COMPLETION CERTIFICATE BY THE LOCAL AUTHORITY BEFORE THE CUT-OFF DATE OR SPECIFIED TIME, AS A PRE-CONDITION TO GET THE BE NEFIT OF TAX DEDUCTION. ELSE, IT WILL THEN BE OPEN TO THE ASSESSEE TO RELY ON OTHER CIRCU MSTANCES OR EVIDENCE TO PLEAD THAT THE HOUSING PROJECT IS COMPLETEREQUIRING ENQUIRY I NTO THOSE MATTERS BY THE TAX AUTHORITIES SANS A COMPLETION CERTIFICATE ISSUED B Y THE LOCAL AUTHORITY IN THAT BEHALF. A PRIORI, THE ARGUMENT OF SUBSTANTIAL COMPLIANCE IS SUFFICIENT, WOULD LEAD TO UNCERTAINTY ABOUT THE DATE OF COMPLETION OF THE PRO JECT WHICH IS THE HALLMARK FOR AVAILING OF THE BENEFIT OF TAX DEDUCTION. ONLY WITH THIS INTENT THE LEGISLATURE IN ITS WISDOM HAS PREDICATED THAT, THE COMPLETION OF CONS TRUCTION OF THE HOUSING PROJECT IS TAKEN TO BE THE DATE ON WHICH THE COMPLETION CERT IFICATE IS ISSUED BY THE LOCAL AUTHORITY. TO INTERPRET IT TO INCLUDE AN EX POST FA CTO CERTIFICATE OR SUCH CERTIFICATE ISSUED BY THE LOCAL AUTHORITY AFTER THE CUT- OFF DATE, WOU LD NOT ONLY RESULT IN REWRITING OF THE EXPRESS PROVISION AND RUN CONTRARY TO THE UNAMBIGUO US POSITION PRONOUNCED IN THE SECTION BUT ALSO DOING VIOLENCE TO THE LEGISLATIVE INTENT. FOR, EXPLANATION (II) WILL THEN HAVE TO BE READ AS DATE OF COMPLETION OF CONSTRUCT ION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE AS CERTIFIED BY THE LOCAL AUTH ORITY IN THAT BEHALF, IRRESPECTIVE OF THE DATE OF ISSUANCE OF SUCH CERTIFICATE BY THE LOC AL AUTHORITY. INDEED, IN A GIVEN CASE IF THE ASSESSEE IS ABLE TO SUBSTANTIATE THAT THE COMPL ETION CERTIFICATE WAS IN FACT ISSUED BY THE LOCAL AUTHORITY BEFORE THE CUT-OFF DATE BUT COULD NOT BE PRODUCED BY HIM WITHIN TIME DUE TO REASONS BEYOND HIS CONTROL, THE ARGUMEN T OF SUBSTANTIAL COMPLIANCE WITH 385-386/M/15 PURANIK BUILDERSPL 9 THE PROVISION CAN BE TESTED. ANY OTHER INTERPRETATI ON WOULD RESULT NOT ONLY IN UNCERTAINTY (IN FINALISATION OF ASSESSMENT PROCEEDI NGS DUE TO NON-ISSUANCE OR DELAYED ISSUANCE OF SUCH CERTIFICATE BY THE LOCAL AUTHORITY AND PRONE TO MANIPULATIONS AT THE END OF THE LOCAL AUTHORITY), BUT ALSO HAVE TO YIELD TO THE SUBJECTIVE SATISFACTION OF THE ASSESSING AUTHORITY AND OF INVESTING WIDE DISCRETIO N IN THAT AUTHORITY, WHICH, EVENTUALLY, MAY ONLY END UP IN GETTING EMBROILED IN LITIGATION. IF THE ASSESSEE HAS FAILED TO COMPLY WITH THE CONDITION OF OBTAINING CO MPLETION CERTIFICATE FROM THE LOCAL AUTHORITY BEFORE THE CUT-OFF DATE, HE MUST TAKE THE CONSEQUENCE THEREOF OF DENIAL OF THE BENEFIT OF TAX DEDUCTION OFFERED TO HIM ON THAT COU NT. (III) THAT ISSUANCE OF COMPLETION CERTIFICATE, AFTE R THE CUT-OFF DATE BY THE LOCAL AUTHORITY BUT, MENTIONING THE DATE OF COMPLETION OF PROJECT B EFORE THE CUT-OFF DATE, DOES NOT FULFIL THE CONDITION SPECIFIED IN CLAUSE (A) OF SEC TION 80-IB(10) READ WITH EXPLANATION (II) THEREUNDER. SIMILARLY, THE REQUIREMENT OF SECU RING THE COMPLETION CERTIFICATE ISSUED BY THE LOCAL AUTHORITY BEFORE THE CUT-OFF DATE IS N OT DIRECTORY, IN VIEW OF THE EXPRESS PROVISION IN SECTION 80-IB(10)(A) READ WITH EXPLANA TION (II) THEREUNDER. THE COMPLETION CERTIFICATE GRANTED BY THE LOCAL AUTHORI TY MUST BEAR THE DATE OF HAVING BEEN ISSUED BEFORE THE CUT-OFF DATE. (IV) THAT THE PROVISION IN THE FORM OF SECTION 80-I B(10)(A) , APPLIES UNIFORMLY TO ALL ASSESSEES WHETHER FOLLOWING THE WORK-IN-PROGRESS AC COUNTING METHOD OR OTHERWISE. THE BENEFIT OF DEDUCTION UNDER THIS PROVISION CAN B E AVAILED OF BY THE ASSESSEE FOLLOWING THE WORK-IN-PROGRESS ACCOUNTING METHOD, P ROVIDED HE HAS COMPLIED WITH THE STIPULATION OF HAVING PRODUCED THE COMPLETION CERTI FICATE ISSUED BY THE LOCAL AUTHORITY BEFORE THE CUT-OFF DATE, AS MAY BE APPLICABLE IN HI S CASE. IN OTHER WORDS, IF THE HOUSING PROJECT WAS APPROVED BY THE LOCAL AUTHORITY BEFORE APRIL 1, 2004, HE MUST SUBMIT THE COMPLETION CERTIFICATE ISSUED BY THE AUTHORITY HAVI NG BEEN ISSUED BEFORE MARCH 31, 2008. WHEREAS, IN THE CASE OF A HOUSING PROJECT APP ROVED ON OR AFTER APRIL 1, 2004, THE ASSESSEE CAN AVAIL OF THE BENEFIT PROVIDED THE COMP LETION CERTIFICATE ISSUED BY THE LOCAL AUTHORITY IS WITHIN FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE CONCERNED HOUSING PROJECT WAS APPROVED BY THE LOCAL AUTHORITY . IF THIS CONDITION WAS NOT FULFILLED, THE ASSESSEE WHO MAINTAINS THE WORK-IN-PROGRESS ACC OUNTING METHOD AND HAD CLAIMED 385-386/M/15 PURANIK BUILDERSPL 10 DEDUCTION U/S.80-IB(10)(A) MUST SUFFER THE CONSEQUE NCE OF DISALLOWANCE OR WITHDRAWAL OF THE BENEFIT CLAIMED BY HIM ON THAT COUNT. WHILE DECIDING THE CASE,THE HONBLE COURT DISSENTED FROM THE JUDGMENTS OF HONBLE GUJARAT AND DELHI HIGH COURT DELIVERED IN THE CASES OF TARNETAR CORPORATION (362 ITR 174) AND CHD DEVELOPERS LTD.(362 ITR 177) AND H AS SPECIFICALLY HELD THAT AMENDED PROVISIONS WERE APPLICABLE TO THE PROJECTS THAT WERE APPROVED BEFORE 1.4.2005.FOLLOWING THE ABOVE MENTIONED LATEST JUDGM ENT ON THE ISSUE,WE HOLD THAT ASSESSEE WAS NOT ENTITLED TO CLAIM DEDUCTION U/S. 8 0IB IN RESPECT OF BUILDING A-1, A-2, C-3, C-4,CLUB-HOUSE OF KP.AS FAR AS BUILDING NO.B-1 ,B-2,B-3,B-4,C-1,C-2 ARE CONCERNED IT IS FOUND THAT OC WAS OBTAINED ON OR BE FORE 31.3.2008,THEREFORE, CLAIM MADE BY THE ASSESSEE U/S. 80IB CANNOT BE DENIED FOR THOSE BUILDINGS. EFFECTIVE GOA RAISED BY AO IS DECIDED IN HIS FAVOUR IN PART. RESPECTFULLY FOLLOWING THE ABOVE ORDER OF THE TRIBU NAL WE DECIDE THE GROUND IN FAVOUR OF THE AO,IN PART. AS A RESULT,APPEAL FILED BY THE AO FOR THE AY.2007- 08STANDS DISMISSED AND THE APPEAL FOR THE AY.2008-09 IS PARTLY ALLOWED. 2007-08 2008-09 . ORDER PRONOUNCED IN TH E OPEN COURT ON 3 RD AUGUST,2016. 3 ,2016 SD/- SD /- ( . . /C.N. PRASAD ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 03 .08.2016. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR C BENCH, ITAT, MUMBAI / , , 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.