M/s Aum Housing, Pune V. ITO, Pune

ITA 44/PUN/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9513 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 04-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NILESH KHANDELWAL
• Keywords: Retrospective amendment; Competent authority
• Section: 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 44/PN/2013 (ASSESSMENT YEAR : 2009-10) M/S. AUM HOUSING, MZSK & ASSOCIATES, CHARTERED ACCOUNTANTS, LEVEL 3, BUSINESS BAY, PLOT NO.84, WELLESLEY ROAD, NEAR RTO, PUNE 411001 .. APPELLANT PAN NO.AAKFA4028N VS. ITO, WARD-2(3), PUNE .. RESPONDENT ASSESSEE BY : SHRI NILESH KHANDELWAL REVENUE BY : SHRI RAJESH DAMOR ORDER PER S. PADVEKAR, JM : IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE IMPU GNED ORDER OF THE LD.CIT(A)-II, PUNE DATED 04-09-2012 FO R THE ASSESSMENT YEAR 2009-10. 2. THE FACTS WHICH ARE REVEALED FROM THE RECORD AS UNDER. THE ASSESSEE IS A FIRM ENGAGED IN THE ACTIVITY AS D EVELOPER AND BUILDER UNDER THE NAME AND STYLE M/S AUM HOUSING. D URING THE YEAR UNDER CONSIDERATION THE ASSESSEE CLAIMED DEDUC TION U/S.80IB(10) OF RS. 86,90,893/-. DURING THE ASSESSM ENT PROCEEDINGS THE AO NOTED THAT THE ARCHITECT OF THE ASSESSEE FIRM HAD MADE AN APPLICATION FOR OCCUPANCY CERTIFIC ATE TO THE PUNE MUNICIPAL CORPORATION ON 08-12-2008 BUT THE SA ME WAS NOT ISSUED. THEREFORE, IN ORDER TO ASCERTAIN THE R EASONS THE AO ISSUED A LETTER TO THE PMC. IN RESPONSE TO WHICH TH E PMC VIDE LETTER DATED 28-11-2011 INFORMED THE AO THAT THE 2 CORRESPONDENCE REGARDING HANDING OVER OF AMENITY SP ACE WAS NOT COMPLETED AND HENCE, COMPLETION CERTIFICATE WAS NOT ISSUED TO THE ASSESSEE. BASED ON THE ABOVE INFORMATION FRO M PMC THE AO SOUGHT EXPLANATION FROM THE ASSESSEE REGARDING A BSENCE OF THE FINAL COMPLETION CERTIFICATE WHICH WAS REQUIRED FOR THE DEDUCTION CLAIMED. THE ASSESSEE EXPLAINED THAT THE ARCHITECT HAD CERTIFIED THE COMPLETION OF THE ROW HOUSES AND HAD SUBMITTED DUE APPLICATION TO THE PMC. HOWEVER, TH E CERTIFICATE WAS PENDING ON ACCOUNT OF SOME TECHNICAL PROCEDURE FOR WHICH THE ASSESSEE IS NOT RESPONSIBLE. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND CONCLUDED THAT THE ASSESSEE HAD NOT COMPLIED WITH THE CONDITI ONS OF SECTION 80IB(10), AND THEREFORE, THE ASSESSEE WAS N OT ELIGIBLE FOR THE DEDUCTION CLAIMED. THE AO FINALLY DISALLOWE D THE CLAIM OF DEDUCTION U/S.80IB(10). 3. ASSESSEE CARRIED THE ISSUE BEFORE THE LD.CIT(A) BUT WITHOUT SUCCESS. THE OPERATIVE PART OF THE FINDING S OF THE LD.CIT(A) IS AS UNDER : 3.7 THUS IT CAN BE SEEN THAT THE COMPLETION CERTIF ICATE HAS TO BE SUBMITTED IN A PRESCRIBED FORM AS PER 'APPENDIX-J', AS PER RULE 7.6 THROUGH THE LICENSED ARCHITECT. THE COPY OF THE COM PLETION CERTIFICATE FURNISHED BY THE APPELLANT INDICATES THAT THE SAME IS IN A FORMAT OF AN APPLICATION AND IS ON THE LETTER PAD OF THE ARCH ITECT WHICH IS MUCH DIFFERENT THAN THAT PRESCRIBED BY THE PMC. THEREFOR E, THE RELIANCE PLACED BY THE APPELLANT ON THE COMPLETION CERTIFICA TE ISSUED BY THE ARCHITECT BECOMES DOUBTFUL AND IS DIFFICULT TO BE B ELIEVED AS THE VERACITY OF THE DOCUMENT ITSELF IS QUESTIONABLE. MO REOVER, THE APPELLANT HAS ALSO NOT BROUGHT ANY MATERIAL ON RECO RD TO INDICATE THE CHANGE IN THE LAYOUT PLAN AND THE TOTAL AREA OR THE FSI GRANTED BY THE PMC EITHER DURING THE ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER OR EVEN DURING THE APPELLATE PROCEEDINGS BE FORE THE UNDERSIGNED. THE APPELLANT'S CONTENTION THAT THE FI NAL OCCUPANCY CERTIFICATE WAS PENDING ON ACCOUNT OF A TECHNICAL P ROCEDURE IS ALSO NOT CORRECT. THIS IS BECAUSE THE PMC HAD CATEGORICA LLY MENTIONED IN ITS LETTER DATED 21-11-2011 TO THE ASSESSING OFFICER TH AT THE ISSUE RELATING TO THE HANDING OVER OF THE AMENITY SPACE WAS NOT COMPLETED AND, THEREFORE, THE OCCUPANCY CERTIFICATE FOR THE P ROJECT WAS NOT ISSUED TO THE APPELLANT. IN FACT, THE PROVISION OF AMENITY SPACE IS THE STARTING POINT IN THE PROCESS OF OBTAINING THE APPR OVAL FOR A PROJECT. 3 MOREOVER, THE TOTAL BUILT UP AREA (FSI) TO BE APPRO VED THE ISSUES RELATING TO THE AMENITY SPACE, OPEN SPACE, ROAD ETC HAS TO BE EARMARKED AT THE INITIAL STAGES OF STARTING/ COMMENCEMENT OF THE PROJECT ITSELF. IN THE PRESENT CASE THE APPELLANT H AS NOT BROUGHT ON RECORD ANY SUCH MATERIAL WHICH COULD INDICATE THE F SI GRANTED BY THE PMC FOR THE PROJECT ESPECIALLY AFTER ITS REVISI ON OF THE PLAN IN 2006 WITH RESPECT TO THE ROW HOUSES. IN FACT THIS ISSUE WAS STILL PENDING AS IS EVIDENT FROM THE REPLY OF THE PMG TO THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS . THUS IN VIEW OF THE GIVEN SET OF FACTS AS BROUGHT-ON RECORD , THE ISSUE OF THE FINAL 'OCCUPANCY CERTIFICATE' ASSUMES IMPORT ANCE. THE APPELLANT HAS NOT BROUGHT ON RECORD THE PERMISSIBLE FSI FOR THE PROJECT AS PER THE BYELAWS AND ALSO THE AREA STATEM ENT WORKED OUT IN THE SANCTIONED PLAN. THESE TECHNICAL DETAILS ARE ALSO SUBJECT TO INSPECTION BY THE PMC OR THE LOCAL AUTHO RITY. 3.8 IN THE PRESENT CASE THE APPROVAL FOR THE PROJEC T WAS GRANTED ON 22.12.2004 AND, THEREFORE, THE PROJECT O UGHT TO HAVE BEEN COMPLETED BEFORE 31.3.2009. FURTHER, EXPL ANATION (II) BELOW SEC. 80IB(10)(A) SPECIFICALLY STATES AS UNDER: '(I) IN A CASE WHERE THE APPROVAL IN RESPECT OF T HE HOUSING PROJECT IS OBTAINED MORE THAN ONCE, SUCH HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY; (II) THE DATE OF COMPLETION OF CONSTRUCTION OF T HE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WH ICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSI NG PROJECT IS ISSUED BY THE LOCAL AUTHORITY;' THEREFORE, THE COMPLETION/ OCCUPANCY CERTIFICATE IN RESPECT OF A HOUSING PROJECT HAS TO BE ISSUED BY THE LOCAL AUT HORITY ONLY AS ENVISAGED BY THE PROVISION OF SEC. 80IB(10) OF T HE I.T. ACT, 1961. THERE IS NO AMBIGUITY IN THE LANGUAGE OF THE EXPLANATION WHICH WOULD LEAD TO ANY OTHER INTERPRETATION. EVEN THERE WAS NO PROVISION UNDER THE PMC RULES FOR ISSUING OF THE COMPLETION CERTIFICATE DIRECTLY BY THE PMC ON THE BASIS OF AN APPLICATION ALONG WITH THE CERTIFICATE OF AN ARCHITECT REGARDIN G COMPLETION OF THE PROJECT, THE PMC OR THE LOCAL AUTHORITY ISSU ES AN 'OCCUPANCY CERTIFICATE'. THEREFORE, FOR THE PURPOSE S OF SEC. 80IB(10)(A) R.W. EXPLANATION THIS CERTIFICATE WOULD BE RELEVANT TO DETERMINE THE FULFILLMENT OF THE CONDITION GIVEN IN THIS SECTION. THE A.O. IN THE PRESENT CASE HAS NOT DISPU TED THE SANCTIONING OF THE HOUSING PROJECT AND ITS COMMENCE MENT W.E.F. 22.12.2004, BUT HAS DOUBTED THE COMPLETION O F THE HOUSING PROJECT. 3.9 DEVELOPMENT OF EVERY REGION IS REGULATED BY THE CONCERNED LOCAL AUTHORITY IN ACCORDANCE WITH DC RULES/REGULATIONS FRAMED BY THAT LOCAL AUTHORITY. T HE DC RULES/REGULATIONS ARE FRAMED BY THE LOCAL AUTHORITY DEPENDING UPON THE NEEDS OF THAT REGION AND HENCE DIFFER FROM REGION TO REGION. THE EXPRESSION 'HOUSING PROJECT' IS NEITHER DEFINED UNDER THE IT. ACT NOR IT IS DEFINED UNDER THE DC RULES/REGULATIONS FRAMED BY THE LOCAL AUTHORITY AND , THEREFORE, WHICH PROJECT WOULD QUALIFY TO BE CALLED AS A HOUSI NG PROJECT HAS TO BE GATHERED FROM THE RULES/REGULATIONS FRAME D BY THE LOCAL AUTHORITY AND THE DEVELOPMENT OF PROJECT AT P UNE ARE APPROVED AS PER THE DEVELOPMENT CONTROL RULES FOR P UNE 4 MUNICIPAL CORPORATION, PUNE 1982 'DC RULES PUNE' FO R SHORT. THUS THE LEGISLATURE AND THE COURTS IN ITS WISDOM H AVE RECOGNIZED THE IMPORTANCE OF A 'LOCAL AUTHORITY' AN D RECOGNIZES THE CERTIFICATE ISSUED WITH RESPECT TO THE APPROVAL AS WELL AS COMPLETION/OCCUPANCY OF A HOUSING PROJECT. 3.10 IN VIEW OF THE FACTS AS NARRATED ABOVE, IT WOU LD BE APPROPRIATE AND SIGNIFICANT TO DISCUSS THE MANNER I N WHICH THE CERTIFICATE OF OCCUPANCY OR THE COMPLETION CERTIFIC ATE IS ISSUED BY A LOCAL AUTHORITY, AS PRESCRIBED UNDER EXPLANATI ON TO SEC 80IB(10)(A) OF THE ACT. THIS IS BECAUSE IT IS NOT A SIMPLE MATTER OF MECHANICALLY CONSTRUCTING VARIOUS RESIDENTIAL BU ILDINGS AND HANDING OVER THE POSSESSION TO THE BUYER OF THESE U NITS. THE PRESCRIBED LOCAL AUTHORITY HAS TO ENSURE THAT THE BUILDER/DEVELOPER HAS COMPLIED WITH THE STATUTORY R ULES AND REGULATIONS WITH REGARD TO THE PROJECT E.G. THE PRO VISIONS OF THE URBAN LAND CEILING (ULC) ACT, PRESCRIBED REGULATION S WHICH REQUIRES 'NO OBJECTION CERTIFICATE' OR THE 'NOC' FR OM THE DRAINAGE DEPARTMENT, CHIEF FIRE OFFICER, DEVELOPMEN T PLAN (DP) DEPT., CHIEF ENGINEER (ELEC), WATER WORKS DEPT ., GARBAGE DISPOSAL, GARDEN DEPT, ENCROACHMENT CLEARANCE ETC. ALL THESE AUTHORITIES CARRY OUT PROCESS OF VERIFICATION OF CO MPLIANCES WITH RESPECT TO THE CONDITIONS LAID DOWN BY THEM AND IT IS ONLY AFTER THEIR SATISFACTION THAT THE 'NOC' IS ISSUED. THE LO CAL AUTHORITY THUS HAS TO ENSURE THAT ALL SUCH RULES AND REGULATI ONS HAVE BEEN FOLLOWED AND THE PROJECT HAS BEEN CONSTRUCTED IN ACCORDANCE WITH THE APPROVAL ACCORDED ORIGINALLY, B EFORE ISSUING OF OCCUPANCY/COMPLETION CERTIFICATE. ANY UN AUTHORIZED CONSTRUCTION WHICH IS NOT SO CERTIFIED BY THE LOCAL AUTHORITY WOULD NOT BE LEGALLY PERMISSIBLE AND IF SUCH COMPLE TION OF THE PROJECTS AND OCCUPANCY THEREOF ARE ALLOWED ROUTINEL Y WITHOUT ANY INSPECTION AND CERTIFICATION REGARDING ITS COMP LETION AS PER THE PRESCRIBED NORMS, RULES AND REGULATION ETC IT W ILL LEAD TO' CHAOS AND DISASTER AND IT WILL LEAD TO HAPHAZARD CO NSTRUCTION EVERYWHERE WITHOUT ANY CONSIDERATION FOR CIVIC AMEN ITIES, DRAINAGE, FIRE CONTROL, ENVIRONMENTAL CONSIDERATION , PROVISION FOR PROPER ROADS ETC. THUS THE ISSUE OF THE OCCUPAN CY CERTIFICATE IS NOT A MERE FORMALITY BUT A FULL FLED GED PROCEDURE OF TIMELY INSPECTION BY THE LOCAL AUTHORITY. THE AP PELLANT HAS ALSO OUTLINED THE VARIOUS RULES OF THE DC RULES, PU NE IN ITS SUBMISSION WHICH CLEARLY SPEAKS OUT THE SPIRIT WITH WHICH THE SAID PROCEDURE AND NORMS ARE TO BE FOLLOWED BEFORE RECEIVING THE OCCUPANCY CERTIFICATE. THE CERTIFICATE ISSUED B Y ANY AUTHORITY BE IT GOVERNMENT, SEMI GOVT OR A LOCAL, I T HAS TO BE ASSUMED THAT THE PRESCRIBED PROCEDURES AND NORMS HA VE BEEN FOLLOWED BEFORE THE ISSUE OF THE STATUTORY ORDERS. THUS IT CAN BE SEEN THAT THE ISSUE OF AN OCCUPANCY CERTIFICATE IS NOT MERE FORMALITY BUT A FULL-FLEDGED PROCEDURE. THE MATERIA L AS BROUGHT ON RECORD DO NOT SPEAK OF ANY SUCH ACTION UNDERTAKE N BY THE APPELLANT. 3.11 FURTHER, THE RELIANCE PLACED BY THE APPELLANT ON THE DECISION OF THE PUNE ITAT IN THE CASE, OF SATISH BO RA CITED SUPRA IS MISPLACED AS THE VERY BASIS OF THE CASE, I .E. THE COMPLETION CERTIFICATE ISSUED BY THE APPOINTED ARC HITECT ITSELF IS DOUBTFUL PIECE OF DOCUMENT MORE SO BECAUSE OF THE C ATEGORICAL FINDING OF THE VALUATION OFFICER THAT THE COMPLETIO N CERTIFICATE ITSELF HAS NOT BEEN SUBMITTED FOR THE 8 ROW HOUSES, WHICH WAS PART OF THE PROJECT UNDERTAKEN BY THE APPELLANT. MO REOVER, THE COMPLETION CERTIFICATE TO BE ISSUED BY APPOINTED AR CHITECT SHOULD BE IN THE PRESCRIBED 'ANNEXURE J', WHICH HAS TO BE SUBMITTED WITH 4 (FOUR) SETS OF COMPLETION PLAN WHI CH DO NOT 5 APPEAR TO HAVE BEEN ADHERED TO BY THE APPELLANT. TH EREFORE, RELIANCE PLACED BY THE APPELLANT ON THE CASE OF SAT ISH BORA IS NOT APPLICABLE AS IN THAT CASE THE COMPLETION CERTI FICATE WAS SUBMITTED IN THE PRESCRIBED FORM BY THE LICENSED AR CHITECT. IT WAS IN THIS CONTEXT THAT THE DECISION IN THE CASE O F SATISH BORA (SUPRA) WAS RENDERED BY THE ITAT, PUNE. THE FACTS A ND THE MATERIAL BROUGHT ON RECORD IS CONTRARY TO THE FACTS OF THE ABOVE CASE. 3.12 IN VIEW OF THE ABOVE FACT THE DISALLOWANCE OF 80IB(10) DEDUCTION MADE BY THE ASSESSING OFFICER IS UPHELD A ND THE GROUND OF APPEAL NO.1 RAISED BY THE APPELLANT IS LI ABLE TO BE DISMISSED. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LD. AUTHORISED REPRESENTATIVE ARGUES THAT TH E PROJECT LA VELLA CASA COMPRISE OF 117 FLATS IN THREE WING S A,B & C AND 8 ROW HOUSES IN D WING AS PER CC 4759/06 DATED 30-3 -2007. THE PMC ISSUED THE COMPLETION CERTIFICATE FOR THE 1 ST STAGE FOR 93 FLATS I.E. 31 FLATS IN WING A, 31 FLATS IN WING B, 31 FLATS IN WING C VIDE CERTIFICATE DT. 29-12-2007. THE 2 ND COMPLETION/OCCUPANCY CERTIFICATE WAS ISSUED BY THE PMC FOR 24 FLATS I.E. 8 FLATS IN WING A, 8 FLATS IN WING B AND 8 FLATS IN WING C VIDE CERTIFICATE DT. 19-1-2009. THUS THE COMPLETI ON / OCCUPANCY CERTIFICATE OF THE ENTIRE 117 FLATS IN TH E THREE WINGS VIZ. A, B & C, WERE OBTAINED BY THE ASSESSEE. HOWEV ER, THE OCCUPANCY CERTIFICATE FOR THE EIGHT (8) ROW HOUSES IN 'D WING' WAS NOT YET OBTAINED. THE VALUATION OFFICER SHRI. E .P. DHANVE IN RESPECT OF THE NET AREA OF THE PLOT HAS REFERRED TO THE LAYOUT SANCTIONED BY PMC, PUNE VIDE CC/4759/06 DT. 30-3-20 07 OF 6950.63 SQ.MTR, I.E. THE PLOT BEING MORE THAN ONE A CRE. 4.1 HE FURTHER SUBMITS THAT AS PER THE PROVISIONS O F THE DC RULES, MORE PARTICULARLY RULE 7.6 AN ARCHITECT WHO IS THE LICENSED ARCHITECT OR ENGINEER WHO HAS SUPERVISED T HE CONSTRUCTION WOULD HAVE TO GIVE A NOTICE TO THE LOC AL AUTHORITY 6 REGARDING THE COMPLETION OF THE WORK IN THE BUILDIN G AS PER COMMENCEMENT CERTIFICATE AND ONLY THEN AN OCCUPANCY CERTIFICATE IS ISSUED. HE ARGUES THAT NOWHERE IT I S THE CASE OF THE AO THAT APART FROM GETTING THE OCCUPANCY CERTIFICATE/COMPLETION CERTIFICATE FROM THE LOCAL A UTHORITY, NOTHING IS LACKING. HE SUBMITS THAT THE ARCHITECT OF THE ASSESSEE FILED APPLICATION IN TIME BUT AS PER THE I NFORMATION OBTAINED BY THE AO, THE OCCUPANCY CERTIFICATE WAS P ENDING ON ACCOUNT OF TECHNICAL PROCEDURE AS THE ASSESSEE HAS NOT HANDED OVER THE AMENITY SPACE. HE SUBMITS THAT EVEN THE D WING WHICH COMPRISES 8 ROW HOUSES WAS COMPLETED BEFORE THE SPECIFIED TIME LIMIT AND THERE IS NO JUSTIFICATION TO SAY THAT PROJECT WAS NOT COMPLETED. HE ALSO REFERRED TO THE AMENDMENT MADE BY THE FINANCE ACT, 2004 TO SECTION 80IB(10) W HEREIN IT IS PROVIDED THAT THE DATE OF COMPLETION OF THE PROJECT WILL BE THE DATE ON WHICH THE COMPLETION CERTIFICATE IS ISSUED BY THE LOCAL AUTHORITY. HE SUBMITS THAT THE SAID PROVISION HAS COME FOR THE CONSIDERATION BEFORE THE HONBLE ITAT, PUNE IN THE CASE OF SATISH BORA AND ASSOCIATES VS. ACIT IN ITA NOS. 713 & 714/PN/2010 AND THE DECISION IN THE CASE OF DEVARAM H. DHARMAVAT VS. ITO IN ITA NOS. 908, 909 910/PN/2010. THE LD. AUTHORISED REPRESENTATIVE ALSO RELIED ON THE DECISI ON OF THE HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. CHD DEVELOPERS LTD. 362 ITR 177 AND MANAN CORPORATION V S. ACIT 356 ITR 44 (GUJ.). HE PLEADED FOR ALLOWING THE DED UCTION. 5. PER CONTRA THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7 6. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND ALSO CONSIDERED THE PRECEDENT RELIED ON BY THE LD. A.R.. AS PER THE FACTS ON RECORD, THE ASSESSEE UNDERTOOK THE HOU SING PROJECT NAMELY LA VELLA CASA AT SURVEY NO.20/3/7+318 +3/1 2 AT BAVDHAN KHURD, PUNE. IT APPEARS THAT AO HAS MADE R EFERENCE TO THE VALUATION OFFICER AND THE SAID REFERENCE IS MENTIONED IN THE ORDERS OF THE AUTHORITIES BELOW. THERE ARE MAI NLY TWO OBJECTIONS FOR NOT GRANTING THE DEDUCTION TO THE AS SESSEE, I.E. (I) THE ASSESSEE COULD NOT PRODUCE THE COMPLETION C ERTIFICATE FROM THE LOCAL AUTHORITIES AND (II) THE APPLICATION FILED BY THE ARCHITECT OF THE ASSESSEE WAS NOT IN THE PROPER FOR MAT AND HENCE THE LD.CIT(A) RAISED THE DOUBT ABOUT THE COMP LETION CERTIFICATE ISSUED BY THE ARCHITECT. AS PER THE FA CTS ON RECORD, IT IS NOT IN DISPUTE THAT THE ASSESSEES HOUSING PROJE CT WAS SANCTIONED VIDE C.C.ISSUED BY THE PMC DATE 22-12-20 04. THE FIRST PLANK OF THE ARGUMENT OF THE LD. AUTHORISED R EPRESENTATIVE IS THAT SO FAR AS AMENDMENT BROUGHT ON THE STATUTE BOOK BY THE FINANCE ACT 2004 WHICH WAS OPERATIVE FROM 01-04-200 5 IS HAVING NO RETROSPECTIVE EFFECT, MORE PARTICULARLY T HE HOUSING PROJECTS WHICH ARE SANCTIONED PRIOR TO 01-04-2005. FOR THAT PROPOSITION, HE RELIED ON THE DECISION OF THE HONB LE HIGH COURT OF GUJARAT IN THE CASE OF MANAN CORPORATION VS. ACI T (SUPRA) AND CIT VS. CHD DEVELOPERS (SUPRA) AND ALSO THE DEC ISION OF THE ITAT, PUNE BENCH IN THE CASE OF SYSTEM ENTERPRI SES VS. ITO-4(5), PUNE IN ITA NO.1123/PN/2012 ORDER DATED 2 8-08- 2014. IN RESPECT OF THE OBSERVATION OF THE LD.CIT( A) THAT THE ARCHITECT CERTIFICATE IS NOT IN PROPER FORMAT HE SU BMITS THAT IT IS ONLY A PROCEDURAL AND APPLICATION OF THE ARCHITECT PROVES THAT WING-D HAVING THE 8 ROW HOUSES WAS COMPLETE. HE SU BMITS 8 THAT THERE IS NO WHISPER IN THE LETTER FROM THE PMC THAT ANY WORK WAS PENDING IN RESPECT OF THE WING-D. 6.1 IN THIS CASE, FIRST ISSUE IS WHETHER THERE IS R EQUIREMENT TO PRODUCE THE COMPLETION CERTIFICATE FROM THE PMC AS PER THE PROVISIONS OF SECTION 80IB(10) FOR DEMONSTRATING TH AT THE PROJECT WAS COMPLETED. IN THIS CASE, BOTH THE AUTH ORITIES BELOW HAVE NOT DISPUTED THAT THE HOUSING PROJECT WAS APPR OVED BY THE LOCAL AUTHORITY, I.E. PMC, ON 22-12-2004. ADMITTED LY, AT THE TIME OF APPROVAL OF THE PROJECT OF THE ASSESSEE AS PER THE LAW APPLICABLE, THERE WAS NO REQUIREMENT TO PRODUCE COM PLETION CERTIFICATE FROM THE PMC. IN THIS CONTEXT, WE MAY LIKE TO REFER TO THE OBSERVATIONS & FINDINGS IN THE DECISION OF T HE ITAT IN THE CASE OF SYSTEM ENTERPRISES (SUPRA) WHICH READ AS UN DER : 10.2 THE OTHER GROUND ON WHICH THE ASSESSING OFFIC ER BASED HIS REJECTION OF DEDUCTION U/S.80IB(10) IS THAT THE ASSESSEE HAS NOT BEEN ABLE TO OBTAIN THE REQUISITE COMPLETION CERTIFICATE/OCCUPANCY CERTIFICATE WITHIN THE TIME L IMIT PRESCRIBED IN THE PROVISIONS OF SECTION 80IB(10) FO R ALL THE FLATS/UNITS WHICH IN THE INSTANT CASE IS 31-03-2008 AND THE ASSESSEE HAS OBTAINED THE CERTIFICATE ONLY ON 31-10 -2009 WHICH IS BEYOND THE STIPULATED DATE. WE FIND THE A SSESSING OFFICER AS WELL AS THE CIT(A) HAS GIVEN A CATEGORIC AL FINDING THAT THE DATE OF COMMENCEMENT OF THE PROJECT AS 16- 07-2002. IN OTHER WORDS, THE HOUSING PROJECT WAS APPROVED BE FORE 31- 03-2004 AND THEREFORE ACCORDING TO BOTH OF THEM THE PROJECT SHOULD HAVE BEEN COMPLETED BEFORE 31-03-2008. 10.3 WE FIND THE HONBLE DELHI HIGH COURT IN THE CA SE OF CHD DEVELOPERS LTD. (SUPRA) HAS OBSERVED AS UNDER (SHO RT NOTES): SECTION 80-IB(10) OF THE INCOME-TAX ACT, 1961, BEF ORE SUBSTITUTION BY THE FINANCE (NO. 2) ACT, 2004 ALLOW ED A HUNDRED PER CENT, DEDUCTION OF THE PROFITS IN THE C ASE OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECT S APPROVED BEFORE MARCH 31, 2005, BY A LOCAL AUTHORITY. BY THE FINANCE (NO. 2) ACT, 2004, WITH EFFECT FROM APRIL 1, 2005, THE CONDITIONS FOR GRANT OF DEDUCTION WERE THAT IN A CA SE WHERE A HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY BETWEEN APRIL 1, 2004 AND MARCH 31, 2005, THE PROJECT SHOUL D BE COMPLETED WITHIN FOUR YEARS FROM THE END OF THE FIN ANCIAL YEAR IN WHICH IT IS APPROVED BY THE LOCAL AUTHORITY. CLA USE (II) OF THE EXPLANATION PROVIDED THAT 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. T HE ASSESSEE, 9 A REAL ESTATE DEVELOPER, OBTAINED APPROVAL FOR A HO USING PROJECT ON MARCH 16, 2005, FROM THE DEVELOPMENT AUT HORITY. IT COMPLETED THE PROJECT IN 2008 AND BY LETTER DATED N OVEMBER 5, 2008 APPLIED TO THE COMPETENT AUTHORITY FOR THE ISS UE OF THE COMPLETION CERTIFICATE. FOR THE ASSESSMENT YEAR 200 7-08, ITS CLAIM TO DEDUCTION UNDER SECTION 80-IB(10) OF THE I NCOME-TAX ACT, 1961 WAS DENIED INTER ALIA, ON THE GROUND THAT THE ASSESSEE HAD VIOLATED THE CONDITIONS STIPULATED UND ER SECTION 80-IB(10) INASMUCH AS IT HAD NOT OBTAINED THE COMPL ETION CERTIFICATE FOR THE PROJECT FROM THE COMPETENT AUTH ORITY WITHIN FOUR YEARS AS STIPULATED IN EXPLANATION (II) THERET O. THE COMMISSIONER (APPEALS) UPHELD THE ASSESSMENT ORDER. THE TRIBUNAL HELD THAT THE ASSESSEE WAS EXPECTED TO COM PLETE THE PROJECT IN ACCORDANCE WITH THE APPROVED PLAN AT A P ARTICULAR POINT OF TIME AND THE ASSESSEE WAS NOT EXPECTED TO DO OR TO FULFIL THE CONDITIONS WHICH WERE NOT IN EXISTENCE A T THE RELEVANT POINT OF TIME OR MADE COMPULSORY BY AMENDMENT IN TH E ACT FROM THE FUTURE DATE. SINCE THE ASSESSEE WAS TO COM PLETE THE PROJECT ON OR BEFORE MARCH 31, 2009, AND A REQUEST WAS DULY MADE WITH THE COMPETENT AUTHORITY ON NOVEMBER 5, 20 08, MENTIONING THAT THE PROJECT HAD BEEN COMPLETED AND THE COMPLETION CERTIFICATE MAY BE ISSUED AND IF THE CER TIFICATE WAS NOT ISSUED BY THE COMPETENT AUTHORITY THE ASSESSEE SHOULD NOT BE PENALISED THEREFORE UNLESS AND UNTIL SOME CONTRA RY FACTS WERE BROUGHT ON RECORD EVIDENCING THAT THE ASSESSEE CONTRAVENED THE CONDITIONS CONTAINED IN THE APPROVA L GRANTED BY SUCH COMPETENT AUTHORITY. HOWEVER, SINCE THE APP ROVAL WAS GRANTED TO THE ASSESSEE ON APRIL 1,2005, THE ASSESS EE WAS NOT EXPECTED TO FULFIL THE CONDITIONS WHICH WERE NOT ON THE STATUTE WHEN SUCH APPROVAL WAS GRANTED TO THE ASSESSEE. THE TRIBUNAL ACCEPTED THE ASSESSEE'S CLAIM TO DEDUCTION UNDER SE CTION 80- IB(10). ON APPEAL: HELD, DISMISSING THE APPEAL, THAT THE APPROVAL FOR THE PROJECT WAS GIVEN BY THE DEVELOPMENT AUTHORITY ON MARCH 16, 2005. CLEARLY THE APPROVAL RELATED TO THE PERIOD PRIOR TO 2005, I.E., BEFORE THE AMENDMENT, WHICH INSISTED ON ISSUANCE OF THE COMPLETION CERTIFICATE BY THE END OF THE FOUR-YEAR PERIOD, WAS BROUGHT INTO FORCE. THE APPLICATION OF SUCH STRINGE NT CONDITIONS, WHICH ARE LEFT TO AN INDEPENDENT BODY SUCH AS THE L OCAL AUTHORITY WHO IS TO ISSUE THE COMPLETION CERTIFICAT E, WOULD HAVE LED TO NOT ONLY HARDSHIP BUT ABSURDITY. AS A CONSEQ UENCE, THE TRIBUNAL WAS NOT, THEREFORE, IN ERROR OF LAW WHILE HOLDING IN FAVOUR OF THE ASSESSEE. 10.4 WE FIND THE HONBLE KARNATAKA HIGH COURT IN TH E CASE OF M/S.ITTINA PROPERTIES PVT. LTD. (SUPRA) WHILE DECID ING AN IDENTICAL ISSUE HAS OBSERVED AS UNDER (PARA 4/PAGE 6 OF THE ORDER): 4. INSOFAR AS QUESTION NOS. 3 AND 4 ARE CONCERNED, IT RELATES TO THE ASSESSEE COMPLYING WITH THE REQUIREM ENTS PROVIDED UNDER SUB-SEC.(1) OF SEC.80 IB BEFORE IT C OULD CLAIM THE BENEFIT PROVIDED UNDER SEC. 80 IB. THE SAID PRO VISION CAME ON THE STATUTE BOOK BY FINANCE ACT 2004, WITH EFFEC T FROM 1/4/2005. THE PLAN WHICH IS SANCTIONED IN THIS CASE IS OF 16/3/2004 I.E., PRIOR TO THE SAID PROVISION COMING INTO FORCE. THIS COURT IN MORE THAN ONE CASE HAS HELD THAT THE SAID PROVISION IS PROSPECTIVE IN NATURE AND IT HAS NO AP PLICATION TO HOUSE PRODUCTS WHICH WAS APPROVED BY THE LOCAL AUTH ORITY PRIOR TO 1/4/2005. IN THAT VIEW OF THE MATTER, THE BENEFI T UNDER SEC. 10 80 IB CANNOT BE DENIED TO THE ASSESSEE ON THE GROUN D THAT HE DOES NOT COMPLY WITH THE TERMS OF SEC.80 IB(10). 5. IT IS SUBMITTED ON BEHALF OF THE ASSESSEE THAT T HEY HAVE COMPLIED WITH THE SAID STATUTORY REQUIREMENT ALSO. AS THE SAID PROVISION HAS NO APPLICATION TO THE FACTS OF THE CA SE, THE QUESTION OF GOING TO THE QUESTION WHETHER THOSE STA TUTORY REQUIREMENTS HAVE BEEN COMPLIED WITH OR NOT, WOULD NOT ARISE AND THE TRIBUNAL RIGHTLY EXTENDED THE SAID BENEFIT. IN THAT VIEW OF THE MATTER, WE DO NOT SEE ANY MERIT IN THE APPEALS AND THE SAID QUESTIONS OF LAW ARE ANSWERED IN THE SENSE THAT THE SAID PROVISION HAS NO APPLICATION TO THE FACTS OF THIS CASE. 10.5 SINCE THE DATE OF THE COMMENCEMENT OF THE PROJ ECT IN THE INSTANT CASE IS ADMITTEDLY 16-07-2002 AS HELD B Y THE ASSESSING OFFICER AS WELL AS THE CIT(A), THEREFORE, RESPECTFULLY FOLLOWING THE DECISIONS CITED (SUPRA) IT HAS TO BE HELD THAT AMENDMENT W.E.F. 01-04-2005 REQUIRING CERTIFICATE O F COMPLETION OF PROJECT WITHIN 4 YEARS OF APPROVAL IS NOT APPLICABLE TO THE PROJECTS APPROVED PRIOR TO THAT D ATE AND THEREFORE THE ASSESSEE IS ENTITLED TO DEDUCTION U/S .80IB(10) OF THE I.T .ACT. 6.2 SO FAR AS THE FIRST OBJECTION IS CONCERNED, THE SAME IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE D ECISION OF THE ITAT, PUNE BENCH IN THE CASE OF SYSTEM ENTERPRI SES (SUPRA). THE NEXT OBJECTION IS REGARDING THE FORMA T OF THE APPLICATION MADE BY THE ARCHITECT OF THE ASSESSEE. IN OUR OPINION, THAT IT IS THE ONLY PROCEDURAL ASPECT AND THE SAID OBJECTION SHOULD NOT COME FOR THE HELP OF THE REVEN UE. THERE IS NO DISPUTE IN THIS CASE ON THE FACT THAT THE ARC HITECT OF THE ASSESSEE SHRI MANGESH BHANDARKAR HAS MADE AN APPLIC ATION FOR OCCUPANCY CERTIFICATE TO THE PMC ON 08-12-2008. AS PER THE ADMITTED POSITION OF LAW, THE ASSESSEE WAS REQUIRED TO COMPLETE THE HOUSING PROJECT ON OR BEFORE 31-03-2009. THE P MC DID NOT ISSUE THE COMPLETION CERTIFICATE FOR THE REASON THA T THE ASSESSEE HAS NOT HANDED OVER THE AMENITY SPACE. IN OUR OPIN ION, THE FORMAT IN WHICH THE ARCHITECT OF THE ASSESSEE HAS F ILED THE APPLICATION FOR GETTING THE OCCUPANCY CERTIFICATE M AY BE THE PROCEDURAL DEFAULT AND THAT WILL NOT DEPRIVE THE AS SESSEE FROM 11 ITS LEGITIMATE CLAIM U/S.80IB(10). MOREOVER, THE P MC HAS NOT POINTED OUT THAT THE APPLICATION IS NOT IN PRESCRIB ED FORMAT. WE ACCORDINGLY ALLOW THE GROUNDS TAKEN BY THE ASSESSEE AND DIRECT THE AO TO ALLOW THE DEDUCTION. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 06-02-2015. SD/- SD/- (G.S.PANNU) (R.S. P ADVEKAR) ACCOUNTANT MEMBER JUDICIAL MEMB ER PUNE DATED: 06 TH FEBRUARY, 2015 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-II, PUNE 4. THE CIT-II, PUNE 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE