SMT. SUDHA SIMHAL, Bhopal V. THE ITO-1(1), Bhopal

ITA 736/IND/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5681 (ITAT-INDORE)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 14-12-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Retrospective amendment
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER I.T.A.NO. 734 TO 736/IND/2015 A.Y. : 2006-07,2007-08 & 2009-10 SMT. SUDHA SIMHAL, ITO, BHOPAL VS 1(1), BHOPAL APPELLANT RESPONDENT PAN NO. ACTPS8702N APPELLANT BY : SHRI HITESH CHIMNANI, C. A. RESPONDENT BY : SHRI R. A. VERMA, DR O R D E R PER D.T.GARASIA, J.M. THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS OF CIT(A)-I, BHOPAL, DATED 16.10.2015 FOR TH E DATE OF HEARING : 14 .0 3 .2016 DATE OF PRONOUNCEMENT : 14 .0 3 .2016 SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 2 2 ASSESSMENT YEARS 2006-07 & 2007-08 AND SEPARATE ORD ER OF CIT(A)-I DATED 16.10.2015 FOR ASSESSMENT YEAR 2009- 10. 2. FOLLOWING GROUNDS HAVE BEEN TAKEN FOR THE ASSESSMEN T YEARS 2006-07 AND 2007-08 :- A.Y. 2006-07 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE ASSESSEES CASE AND AS PER LAW, THE LD. CIT(A) ERRE D IN CONFIRMING DISALLOWANCE OF RS. 6,12,670/- IN RESPECT OF CLAIM OF DEDUCTION U/S 80IB(10) OF THE INCOME-TAX ACT, MADE BY LD. AO. A.Y. 2007-08 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE ASSESSEES CASE AND AS PER LAW, THE LD. CIT(A) ERRE D IN CONFIRMING DISALLOWANCE OF RS. 18,87,227/- IN RESPECT OF CLAIM OF DEDUCTION U/S 80IB(10) OF THE INCOME-TAX ACT, MADE BY LD. AO. A.Y. 2009-10 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE ASSESSEES CASE AND AS PER LAW, THE LD. CIT(A) ERRE D SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 3 3 IN CONFIRMING DISALLOWANCE OF RS. 16,05,455/- IN RESPECT OF CLAIM OF DEDUCTION U/S 80IB(10) OF THE INCOME-TAX ACT, MADE BY LD. AO. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S ENGAGED IN THE BUSINESS OF BUILDER AND DEVELOPER. D URING THESE ASSESSMENT YEARS, THE ASSESSEE HAD CONTINUED DEVELOPING AND BUILDING HOUSING PROJECT UNDER THE N AME AND STYLE OF PARN KUTIR PARISAR FOR WHICH DEDUCTION U /S 80IB(10) OF THE INCOME-TAX ACT, 1961, WAS SOUGHT. THE ORIGIN AL ASSESSMENT IN THIS CASE WAS MADE ON 17.12.2008 FOR THE ASSESSMENT YEAR 2006-07 AND ON 16.9.2009 FOR THE ASSESSMENT YEAR 2007-08 WHEREBY CLAIM OF THE ASSESS EE U/S 80IB(10) OF THE INCOME-TAX ACT, 1961, WAS DISALLOWE D. THE ASSESSEES ABOVE CONTENTIONS WERE DISCUSSED IN DETA IL BY CIT(A)-I, BHOPAL WHO VIDE ORDER IN I.T.A.NOS. 175/0 8-09 AND 112/09-10 DATED 10.5.2010 IN THE ASSESSEES APPEAL FOR THE ASSESSMENT YEARS 2006-07 AND 2007-08 UPHELD THE DISALLOWANCE OF DEDUCTION U/S 80IB IN THE CASE OF T HE ASSESSEES. THE I.T.A.T., INDORE BENCH IN I.T.A.NOS. 514, 515/IND/2010 FOR THE ASSESSMENT YEARS 2006-07 AND 2 007-08 SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 4 4 IN THE ASSESSEES CASE PASSED ORDER DATED 10.1.2011 REMANDING THE CASE TO THE FILE OF THE AO WITH A DIR ECTION TO EXAMINE THE CLAIM OF THE ASSESSEE AFTER TAKING INTO ACCOUNT THE DOCUMENTS CONTAINED IN THE PAPER BOOK. 4. THESE APPEALS ARE AGAINST THE FRESH ASSESSMENT ORDE RS PASSED BY THE ASSESSING OFFICER IN THESE TWO ASSESS MENT YEARS 2006-07 AND 2007-08. IN COMPLIANCE TO THE QUESTIONN AIRE DATED 6.9.2011, THE AO HAD OBSERVED THAT THE PROJE CT WAS STILL UNDER CONSTRUCTION. ALSO, IN RESPONSE TO AOS LETTE R DATED 5.12.2011, THE CITY PLANNER, NAGAR NIGAM, BHOPAL VI DE HIS LETTER DATED 08.12.2011 HAD STATED THAT NO COMPLETI ON CERTIFICATE WAS ISSUED TILL DATE IN RESPECT OF THE IMPUGNED HOUSING PROJECT OF THE ASSESSEE. 5. THE AO FURTHER OBSERVED THAT THE ASSESSEE SHOULD HA VE COMPLETED THE HOUSING PROJECT ON OR BEFORE 31.3.201 1 AND COMPLETION CERTIFICATES SHOULD HAVE BEEN ISSUED BY THE LOCAL AUTHORITY I.E. NAGAR NIGAM, BHOPAL, ON OR BEFORE 31 .03.2011. HOWEVER, AS STATED EARLIER, IN RESPONSE TO THE AOS LETTER DATED 5.12.2011, THE CITY PLANNER, NAGAR NIGAM, BHOPAL VI DE HIS LETTER DATED 8.12.2011 HAD STATED THAT NO COMPLETIO N SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 5 5 CERTIFICATE HAD BEEN ISSUED TILL DATE IN RESPECT OF THE IMPUGNED HOUSING PROJECT TO THE ASSESSEE. THEREFORE, IN VIEW OF THE SAME THE AO, DISALLOWED THE CLAIM OF THE ASSESSEE FOR DE DUCTION OF RS. 6,12,670/-, RS. 18,87,227/- AND OF RS. 16,05,45 5/- FOR THE ASSESSMENT YEARS 2006-07, 2007-08 AND 2009-10. 6. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT HON'BLE HIGH COURT OF MADHYA PRADESH IN THE CASE OF CIT VS. M/S. GLOBAL REALITY, I.T.A.NO. 40/2012 AND OTHER HA S DECIDED THE ISSUE AGAINST THE ASSESSEE. THE LD. AUTHORIZED REPRESENTATIVE HAS ALSO FILED THE COPY OF ORDER OF THE I.T.A.T. INDORE BENCH PASSED IN I.T.A.NOS. 276 AND 277/IND/2 015 FOR ASSESSMENT YEARS 2010-11 AND 2011-12 IN THE CASE OF ASSESSEE. 7. THE LD. DR AGREED TO ABOVE. 8. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. WE HAVE GONE THROUGH THE ORDERS OF THE AU THORITIES BELOW. WE HAVE ALSO GONE THROUGH THE ORDER PASSED B Y THE I.T.A.T., INDORE BENCH. IN A RECENT JUDGMENT THE HO N'BLE JURISDICTIONAL HIGH COURT OF MADHYA PRADESH IN THE CASE OF CIT SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 6 6 VS. M/S GLOBAL REALITY; ITA NO. 40/2012 AND OTHERS HAS DECIDED THE ISSUE AGAINST THE ASSESSEE BY HOLDING A S UNDER :- 19. THE PROVISION SUCH AS CLAUSE (A) AS AMENDED, SENSU STRICTO, CANNOT BE CONSIDERED 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 COMPLETED, TO GET THE BENEFIT OF THE PRESCRIBED DEDUCTION. NOTABLY, THE AMENDED SECTION 80IB (10) (A) EXTENDS THE BENEFIT EVEN TO THE HOUSING PROJECTS APPROVED BY THE LOCAL AUTHORITY BEFORE 31.03.2007, INSTEAD OF 31.03.2005 - AS WAS PROVIDED IN THE UNAMENDED PROVISION. THEREFORE, NECESSITY WAS FELT TO MAKE DISTINCTION BETWEEN THE TWO CLASSES OF HOUSING PROJECTS FOR SPECIFYING THE TIME FRAME FOR COMPLETION. THE ONE APPROVED BY THE LOCAL AUTHORITY BEFORE 1ST DAY OF APRIL, SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 7 7 2004; AND THE OTHER CLASS OF HOUSING PROJECT APPROVED BY THE LOCAL AUTHORITY ON OR AFTER 1ST APRIL 2004 TILL 31.03.2007. IN EITHER CASE, THE TIME FRAME FOR COMPLETION OF PROJECT HAS BEEN PRESCRIBED AS FOUR YEARS. IN THAT, THE PROJECT APPROVED BEFORE 1ST APRIL, 2004 HAS BEEN GIVEN TIME TO COMPLETE BEFORE 31.03.2008; AND IN THE LATTER CATEGORY I.T.A.NOS.40/2012, 36/2012 & 35/2012 WITHIN FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT WAS APPROVED BY THE LOCAL AUTHORITY. 20. THUS UNDERSTOOD, SIMILAR TIME FRAME FOR COMPLETION OF HOUSING PROJECT HAS BEEN GIVEN TO BOTH CLASS OF HOUSING PROJECTS. MOREOVER, THE EXPLANATION BELOW CLAUSE (A), IN PARTICULAR (II), APPLIES TO BOTH CLASS OF HOUSING PROJECTS UNIFORMLY. IT POSTULATES THAT 'THE DATE OF COMPLETION OF CONSTRUCTION SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 8 8 OF HOUSING PROJECT' SHALL BE TAKEN TO BE 'THE DATE ON WHICH COMPLETION CERTIFICATE' IN RESPECT OF SUCH HOUSING PROJECT 'IS ISSUED BY THE LOCAL AUTHORITY'. IF EXPLANATION (II) IS SUPERIMPOSED ON THE EXPRESSION 'COMPLETES SUCH CONSTRUCTION' IN CLAUSE (A) OF SECTION 80IB(10) , IT WOULD MEAN THAT THE HOUSING PROJECTS COMMENCED ON OR AFTER 01.10.1998 MUST POSSESS COMPLETION CERTIFICATE ISSUED BY THE LOCAL AUTHORITY ON OR BEFORE THE CUT OFF DATE, AS MAY BE APPLICABLE - TO BECOME ELIGIBLE FOR TAX DEDUCTION. AS PER EXPLANATION (II), THEREFORE, THE SYNONYM OF 'COMPLETES SUCH CONSTRUCTION' WOULD BE THE DATE ON WHICH COMPLETION CERTIFICATE IS ISSUED BY THE LOCAL AUTHORITY. NO MORE AND NO LESS. THUS, ENOUGH INDICATION AND ALSO SUFFICIENT TIME HAS I.T.A.NOS.40/2012, 36/2012 & 35/2012 BEEN GIVEN TO BOTH THE CLASS OF HOUSING PROJECTS TO FULFILL THAT SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 9 9 CONDITION. THE PROVISION IS IN THE NATURE OF LIMITING THE BENEFIT OF DEDUCTION TO THE SPECIFIED HOUSING PROJECTS, AND NOT TO THOSE WHO FAIL TO FULFILL THE REQUIREMENT OF COMPLETION OF CONSTRUCTION IN TIME FRAME SPECIFIED FOR THE RESPECTIVE CATEGORY OF HOUSING PROJECTS. THIS HAS BEEN DONE IN LARGER PUBLIC INTEREST - TO ENSURE THAT THE BENEFIT IS GIVEN ONLY TO SUCH PROJECTS WHO WOULD FURTHER THE GOAL OF PROVIDING LOW COST ECONOMIC HOUSES TO THE DESERVING PERSONS IN REASONABLE TIME. 21. CONCEDEDLY, IT IS WITHIN THE DOMAIN OF PARLIAMENT TO EXTEND BENEFIT OR PRIVILEGE TO CERTAIN CLASS OF PERSONS AND ALSO TO WITHDRAW THE SAME FOR JUST REASONS. THAT CANNOT BE QUESTIONED, UNLESS SHOWN TO BE UNCONSTITUTIONAL IN FORM OR ITS SUBSTANCE. IT WAS THUS OPEN TO THE PARLIAMENT, TO PROVIDE FOR A CUT OFF DATE FOR COMPLETION OF THE SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 10 10 HOUSING PROJECTS, AS A CONDITION PRECEDENT TO AVAIL BENEFIT OF DEDUCTION. IN THE PAST, SUCH STIPULATION WAS IN PLACE, BUT, LATER ON, IT WAS DONE AWAY WITH. HOWEVER, BY AMENDMENT WHICH CAME INTO EFFECT FROM 1ST APRIL, 2005, THE CONDITION FOR COMPLETION OF PROJECT WITHIN SPECIFIED TIME HAS I.T.A.NOS.40/2012, 36/2012 & 35/2012 BEEN REINTRODUCED, WHILE GIVING SUFFICIENT TIME (FOUR YEARS) TO THE ASSESSEE TO COMPLY FOR BEING ENTITLED TO GET DEDUCTION. 22. A PRIORI, IT IS NOT A CASE OF IMPOSING NEW CONDITION, MUCH LESS, WITH RETROSPECTIVE EFFECT AS HAS BEEN ARGUED BEFORE US; UNLIKE INTRODUCTION OF NEW CONDITION IN THE SHAPE OF CLAUSE (D) - WHICH OBVIOUSLY COULD BE APPLIED ONLY PROSPECTIVELY, AS HELD BY THE SUPREME COURT IN THE AFORESAID DECISIONS. CLAUSE (A) STANDS ON A COMPLETELY DIFFERENT PEDESTAL. IT CANNOT BE TREATED AS A NEW SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 11 11 CONDITION LINKED TO THE APPROVAL AND CONSTRUCTION OR HAVING RETROSPECTIVE EFFECT AS SUCH. FOR, IT GIVES AT LEAST FOUR YEARS' TIME FRAME TO BOTH CLASS OF HOUSING PROJECTS; TO WIT, HOUSING PROJECTS APPROVED PRIOR TO 1ST APRIL, 2004 OR AFTER 1ST APRIL, 2004. THE FOUR YEARS PERIOD OBVIOUSLY HAS PROSPECTIVE EFFECT, ALBEIT LIMITING THE PERIOD FOR COMPLETION OF THE PROJECT, TO AVAIL OF THE BENEFIT. FOUR YEARS' TIME FRAME FOR COMPLETION OF THE PROJECT, BY NO STANDARDS, CAN BE SAID TO BE UNREASONABLE, HARSH, ABSURD OR INCAPABLE OF COMPLIANCE. IT IS ALSO NOT A CASE OF WITHDRAWAL OF VESTED RIGHT OF THE DEVELOPER, AS SUCH. NO DEVELOPER CAN CLAIM VESTED RIGHT TO COMPLETE THE HOUSING PROJECT I.T.A.NOS.40/2012, 36/2012 & 35/2012 IN INDEFINITE PERIOD. THE RIGHT ARISING FROM SECTION 80IB , IS COUPLED WITH THE OBLIGATION OR DUTY TO COMPLETE THE PROJECT SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 12 12 IN SPECIFIED TIME FRAME. IF THE DEVELOPER DOES NOT COMPLETE THE HOUSING PROJECT WITHIN SPECIFIED TIME, WILL NOT RECEIVE THAT BENEFIT. THERE IS NO COMPULSION ON HIM TO COMPLETE THE PROJECT IN FOUR YEARS. NOTABLY, EVEN THE APPROVALS 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 DEVELOPER 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 DEDUCTION FROM PROFITS, CAN CERTAINLY PRESCRIBE FOR REASONABLE CONDITIONS AND MORE SO TIME FRAME FOR COMPLETION OF THE PROJECT, IN LARGER PUBLIC INTEREST. SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 13 13 23. SUFFICE IT TO OBSERVE THAT, NO COMPARISON CAN BE DRAWN BETWEEN THE NEW CONDITION PRESCRIBED IN TERMS OF CLAUSE (D) AND THAT OF CLAUSE (A). CONDITION IN CLAUSE (A), NEITHER OPERATES RETROSPECTIVELY NOR CAN BE SAID TO BE ABSURD, UNJUST OR EXPECTING I.T.A.NOS.40/2012, 36/2012 & 35/2012 THE ASSESSEE TO COMPLY WITH SOMETHING WHICH IS IMPOSSIBLE TO ACHIEVE. 24. THE NEXT QUESTION THAT NEEDS TO BE ANSWERED, IS, WHETHER THE STIPULATION IN SECTION 80IB(10)(A) CAN BE SAID TO BE DIRECTORY. CONSIDERING THE PRODIGIOUS BENEFIT OFFERED IN TERMS OF SECTION 80IB TO THE ASSESSEE (HUNDRED PER CENT OF THE PROFITS DERIVED IN ANY PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR); AND THE PURPOSE UNDERLYING THE SAME - WHICH IS INTER ALIA BURDEN ON THE PUBLIC EXCHEQUER DUE TO WAIVER OF COMMENSURATE REVENUE - SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 14 14 THE STIPULATION FOR OBTAINING COMPLETION CERTIFICATE FROM THE LOCAL AUTHORITY BEFORE THE CUT OFF DATE, MUST BE CONSTRUED AS MANDATORY. THE FACT THAT COMPLIANCE OF 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 PRECONDITION TO GET THE BENEFIT OF TAX DEDUCTION. ELSE, IT WILL THEN BE OPEN TO THE ASSESSEE TO RELY ON OTHER CIRCUMSTANCES OR I.T.A. NOS. 40/2012, 36/2012 & 35/ 2012 EVIDENCE TO PLEAD THAT THE HOUSING PROJECT IS COMPLETE - REQUIRING ENQUIRY INTO THOSE MATTERS BY THE TAX AUTHORITIES - SANS A COMPLETION CERTIFICATE ISSUED BY THE LOCAL AUTHORITY IN SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 15 15 THAT BEHALF. A PRIORI, THE ARGUMENT OF SUBSTANTIAL COMPLIANCE IS SUFFICIENT, WOULD LEAD TO UNCERTAINTY ABOUT THE DATE OF COMPLETION OF THE PROJECT WHICH IS THE HALLMARK FOR AVAILING OF THE BENEFIT OF TAX DEDUCTION. ONLY WITH THIS INTENT THE LEGISLATURE IN ITS WISDOM HAS PREDICTED THAT, 'THE COMPLETION OF CONSTRUCTION' OF THE HOUSING PROJECT IS TAKEN TO BE 'THE DATE ON WHICH' THE COMPLETION CERTIFICATE 'IS ISSUED' BY THE LOCAL AUTHORITY. TO INTERPRET IT TO INCLUDE AN EX POST FACTO CERTIFICATE OR SUCH CERTIFICATE ISSUED BY THE LOCAL AUTHORITY AFTER THE CUT OFF DATE, WOULD NOT ONLY RESULT IN REWRITING OF THE EXPRESS PROVISION AND RUN CONTRARY TO THE UNAMBIGUOUS 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 CONSTRUCTION OF THE SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 16 16 HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE AS CERTIFIED BY THE LOCAL AUTHORITY IN THAT BEHALF', IRRESPECTIVE OF THE DATE OF ISSUANCE OF SUCH CERTIFICATE BY THE I.T.A.NOS.40/2012, 36/2012 & 35/2012 LOCAL AUTHORITY. INDEED, IN A GIVEN CASE IF THE ASSESSEE IS ABLE TO SUBSTANTIATE THAT THE COMPLETION 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 ARGUMENT OF SUBSTANTIAL COMPLIANCE OF THE PROVISION CAN BE TESTED. ANY OTHER INTERPRETATION WOULD RESULT NOT ONLY IN UNCERTAINTY (IN FINALIZATION OF ASSESSMENT PROCEEDINGS 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 SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 17 17 SUBJECTIVE SATISFACTION OF THE ASSESSING AUTHORITY AND OF INVESTING WIDE DISCRETION 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 COMPLETION CERTIFICATE FROM THE LOCAL AUTHORITY BEFORE THE CUT OFF DATE, HE MUST TAKE THE CONSEQUENCE THEREFOR AND OF DENIAL OF THE BENEFIT OF TAX DEDUCTION OFFERED TO HIM ON THAT COUNT. 25. WE CANNOT BE OBLIVIOUS OF THE FACT THAT THE MUNICIPAL LAWS OF DIFFERENT STATES ARE NOT UNIFORM IN RESPECT OF PROCEDURE FOR I.T.A.NOS.40/2012, 36/2012 & 35/2012 ISSUANCE OF COMPLETION CERTIFICATE. TO WIT, IN SOME STATES, THE DISPENSATION PROVIDED IS TO ISSUE PARTIAL OR FULL OCCUPATION CERTIFICATE; AND THEREAFTER ISSUE COMPLETION CERTIFICATE AFTER REMOVAL OF ALL THE SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 18 18 DEFICIENCIES POINTED OUT BY THE LOCAL AUTHORITY. IN SOME STATES, THE MUNICIPAL LAW MAY PROVIDE FOR ISSUING PARTIAL OR FULL COMPLETION CERTIFICATE. THE REQUIREMENT OF COMPLETION CERTIFICATE ISSUED BY THE LOCAL AUTHORITY, AS ENVISAGED IN SECTION 80IB(10)(A) OF THE INCOME TAX ACT, WHICH IS A CENTRAL ENACTMENT DEALING WITH THE SPECIAL SUBJECT OF TAXATION, HOWEVER, IS, OF ONLY ONE CERTIFICATE - WHICH IS FULL COMPLETION CERTIFICATE ISSUED BY THE LOCAL AUTHORITY BEFORE THE CUT OFF DATE. THAT IS TO LEND CREDENCE TO THE FACTUM OF COMPLETION OF THE ENTIRE HOUSING PROJECT IN ALL RESPECTS AS PER THE APPROVAL GRANTED BY THE LOCAL AUTHORITY. IT CAN BE SAFELY ASSUMED THAT THE LEGISLATURE WAS CONSCIOUS OF THIS POSITION, FOR WHICH, EXPRESS PROVISION HAS BEEN MADE AS TO THE MEANING OF THE DATE OF COMPLETION OF THE HOUSING PROJECT LINKED TO THE 'DATE ON SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 19 19 WHICH' COMPLETION CERTIFICATE 'IS ISSUED' BY THE 'LOCAL AUTHORITY', AS PREDICATED IN EXPLANATION (II) THEREUNDER. 26. WE ACCORDINGLY HOLD THAT ISSUANCE OF COMPLETION CERTIFICATE, AFTER THE CUT OFF DATE BY THE LOCAL AUTHORITY BUT, MENTIONING THE DATE OF COMPLETION OF PROJECT BEFORE THE CUT OFF DATE DOES NOT FULFILL THE CONDITION SPECIFIED IN CLAUSE (A) OF SECTION 80IB (10) READ WITH EXPLANATION (II) THEREUNDER. WE REJECT THE ARGUMENT OF THE ASSESSEE THAT THE EFFECT OF AMENDED CLAUSE (A) OF SUB-SECTION 10 OF SECTION 80IB, WHICH HAS COME INTO FORCE WITH EFFECT FROM 1 ST APRIL, 2005 ,HAS RETROSPECTIVE EFFECT OR THAT IT IS UNJUST IN ANY MANNER OR INCAPABLE OF COMPLIANCE AT ALL. SIMILARLY, THE REQUIREMENT OF SECURING COMPLETION CERTIFICATE ISSUED BY THE LOCAL AUTHORITY BEFORE THE CUT OFF DATE IS NOT DIRECTORY, IN VIEW OF THE EXPRESS PROVISION IN SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 20 20 SECTION 80IB(10)(A) AND THE EXPLANATION (II) THEREUNDER. THE COMPLETION CERTIFICATE GRANTED BY THE LOCAL AUTHORITY MUST BEAR THE DATE OF HAVING BEEN ISSUED BEFORE THE CUT OFF DATE. 27. THAT TAKES US TO THE ARGUMENT OF THE ASSESSEE THAT THE STIPULATION IN SECTION 80IB(10)(A) OF COMPLETION CERTIFICATE ISSUED BY THE LOCAL AUTHORITY BEFORE THE CUT OFF DATE, CANNOT BE APPLIED IN THE CASE OF ASSESSEE FOLLOWING THE WORK IN PROGRESS ACCOUNTING METHOD. IN OUR OPINION, THE PROVISION IN THE FORM OF SECTION 80IB (10)(A), APPLIES UNIFORMLY TO ALL THE ASSESSEES - BE IT FOLLOWING WORK IN PROGRESS ACCOUNTING METHOD OR OTHERWISE. THE BENEFIT OF DEDUCTION UNDER THIS PROVISION CAN BE AVAILED BY THE ASSESSEE FOLLOWING THE WORK IN PROGRESS ACCOUNTING METHOD, PROVIDED HE HAS COMPLIED WITH SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 21 21 THE STIPULATION OF HAVING PRODUCED COMPLETION CERTIFICATE ISSUED BY THE LOCAL AUTHORITY BEFORE THE CUT OFF DATE, AS MAY BE APPLICABLE IN HIS CASE. IN OTHER WORDS, IF THE HOUSING PROJECT WAS APPROVED BY THE LOCAL AUTHORITY BEFORE 1 ST APRIL, 2004, HE MUST SUBMIT COMPLETION CERTIFICATE ISSUED BY THE AUTHORITY HAVING BEEN ISSUED BEFORE THE 31 ST MARCH, 2008. WHEREAS, IN THE CASE OF HOUSING PROJECT APPROVED ON OR AFTER 1 ST APRIL, 2004, THE ASSESSEE CAN AVAIL OF THE BENEFIT PROVIDED COMPLETION 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 IS NOT FULFILLED, THE ASSESSEE WHO MAINTAINS WORK IN PROGRESS ACCOUNTING METHOD AND HAS CLAIMED DEDUCTION UNDER SECTION SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 22 22 80IB(10)(A) MUST SUFFER THE CONSEQUENCE OF DISALLOWANCE OR WITHDRAWAL OF THE BENEFIT CLAIMED BY HIM ON THAT COUNT. 28. ACCORDINGLY, THESE APPEALS SUCCEED. THE IMPUGNED JUDGMENT OF THE TRIBUNAL IS SET ASIDE; AND IN THE FACTS OF THE PRESENT CASE, THE DECISION OF THE ASSESSING OFFICER TO DISALLOW DEDUCTION UNDER SECTION 80IB(10)(A) OF THE INCOME TAX ACT IS UPHELD. NO ORDER AS TO COSTS. 7. THE HON'BLE JURISDICTIONAL HIGH COURT HAS CONSIDERE D THE SWEEP OF AMENDED CLAUSE (A) OF THE PROVISION UNDER SUB- SECTION (10) OF SECTION 80IB OF THE ACT AND HELD TH AT THE PROVISIONS OF CLAUSE (A), AS AMENDED, SEN SUSTRICTO CANNOT BE CONSIDERED AS NEW CONDITION AND THAT TOO INCAPABLE OF COMPLIANCE. THE CLAUSE DEALS WITH THE TIME FRAME WI THIN WHICH THE HOUSING PROJECT WAS EXPECTED TO BE COMPLETED TO GET THE BENEFIT OF PRESCRIBED DEDUCTION. THE HON'BLE HIGH C OURT HAS HELD THAT ISSUANCE OF COMPLETION CERTIFICATE AFTER THE CUT OFF DATE BY THE LOCAL AUTHORITY BUT MENTIONING IN THE D ATE OF THE SMT. SUDHA SIMHAL, BHOPAL VS. ITO,1(1), BHOPAL I. T.A.NOS. 734 TO 736/IND/2015 A.YS. 2006- 07, 2007-08 & 2009-10 23 23 COMPLETION OF PROJECT BEFORE CUT OFF DATE, DOES NOT FULFIL THE CONDITION SPECIFIED IN CLAUSE (A) OF SECTION 80IB(1 0) READ WITH EXPLANATION 2 THEREUNDER. IN VIEW OF THIS FINDING, WE FIND NO MERIT IN THE APPEALS OF THE ASSESSEE. WE, RESPECTFU LLY, FOLLOWING THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT, DISMISS THE APPEALS OF THE ASSESSEE. 9. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 14 TH MARCH, 2016. SD/- (B.C.MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 14 TH MARCH, 2016. CPU* 14.3