M/s. Rajdhani Land & Housing Corporation, Bhopal V. Pr. CIT -1, Bhopal

ITA 975/Ind/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6411 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-03-2021
• Assessment Year: 2007-2008
• Appeal Filed On: 09-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: GIRISH AGRAWAL; NISHA LAHOTI A RS
• Keywords: Capital asset; Opportunity of being heard; Period of limitation; Competent authority; Prejudicial to interest; Set aside
• Section: 143(3); 80IB; 133(6); 143(2); 13; 119; 22; 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE RAJPAL YADAV, VICE PRESIDENT AND SHRI MANISH BORAD, ACCOUNTANT MEMBER VIRTUAL HEARING ITA NO.975/IND/2019 ASSESSMENT YEAR:2007-08 M /S RAJDHANI LAND & HOUSING CORPORATION, BHOPAL / VS. PR. CIT - 1 , BHOPAL (APPELLANT) (R ESPONDENT ) P.A. NO. AAHFR4618J APPELLANT BY SHRI GIRISH AGRAWAL & MS. NISHA LAHOTI, ARS REVENUE BY SHRI HARSHIT BARI, SR. DR DATE OF HEARING: 05.07.2021 DATE OF PRONOUNCEMENT: 16.08.2021 / O R D E R PER MANISH BORAD, A.M: BY WAY OF THIS APPEAL, THE APPELLANT HAS CHALLENGED THE ASSUMPTION OF JURISDICTION U/S 263 OF THE INCOME TA X ACT 1961( HEREINAFTER REFERRED TO AS THE ACT FOR SHORT) BY LD. PR. CIT-1 BHOPAL VIDE ORDER DATED 20.09.2019. RAJDHANI LAND & HOUSING 2 2. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE R ECORDS ARE THAT THE ASSESSEE IS PROPRIETORSHIP FIRM ENGAGED IN THE BUSI NESS OF CIVIL CONSTRUCTIONS DEVELOPING BUILDING AND HOUSING PROJE CT. RETURN OF INCOME FOR A.Y. 2007-08 WAS FILED ON 15.11.2007 DEC LARING INCOME OF RS. 1,58,470/- AFTER CLAIMING DEDUCTION U/S 80IB(10 ) OF THE ACT AT RS. 1,11,55,537/-. CASE SELECTED FOR SCRUTINY AND N OTICE U/S 263 DULY SERVED UPON THE ASSESSEE. LD. AO EXAMINED THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT BUT WAS NOT CONVI NCED WITH THE SUBMISSIONS AND DOCUMENTS FILED BY THE ASSESSEE. AC CORDINGLY CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT WAS REJECTED A ND INCOME ASSESSED AT RS.1,13,14,007/- U/S 143(3) OF THE ACT VIDE ORDER DATED 27.11.2009. 3. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE LD . CIT(A) AND SUCCEEDED AS LD. CIT(A) AFTER CONSIDERING THE DOCUM ENTS ALLOWED THE DEDUCTION VIDE ORDER DATED 11.05.2010. THEREAFTER T HE REVENUE FILED AN APPEAL BEFORE THIS TRIBUNAL AND VIDE ORDER DATED 25.04.2012 IN ITANO.558/IND/2010, THIS TRIBUNAL AFTER CONSIDERING THE FACTS PLACED AND EVIDENCES FILED RESTORED THE ISSUE TO LD. AO FO R DECIDING AFRESH AND ALSO EXAMINING THE DEDUCTION OF U/S 80IB(10) OF THE ACT. RAJDHANI LAND & HOUSING 3 4. IN COMPLIANCE TO THE ORDER OF THIS TRIBUNAL LD. AO CONDUCTED THE ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S. 254 OF THE ACT AND AFTER CONSIDERING THE FACTS AND THE CLARIFICATION LETTER DATED 29.03.2014 ISSUED BY BHOPAL MUNICIPAL CORPORATION ALLOWED THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT AT RS.1,11,55,537 /-. SUBSEQUENTLY LD. PR. CIT AFTER EXAMINING THE ASSESS MENT RECORDS INVOKED THE PROVISIONS OF SECTION 263 OF THE ACT AN D VIDE ORDER DATED 14.03.2016 HELD THE ASSESSMENT ORDER DATED 31.03.20 14 AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E AND DIRECTED THE LD. AO TO DECIDE IT AFRESH. 5. AGGRIEVED WITH THE ORDER U/S 263 OF THE ACT DATE D 14.03.2016 ASSESSEE PREFERRED AN APPEAL BEFORE THIS TRIBUNAL P RAYING FOR QUASHING THE ORDER U/S 263 OF THE ACT. THIS TRIBUNA L VIDE ITS ORDER 26.10.2018 ITANO.475/IND/2016 OBSERVING THAT THE AS SESSEE WAS NOT AFFORDED SUFFICIENT OPPORTUNITY BY LD. PR. CIT DECIDED TO SET ASIDE THE ORDER U/S 263 OF THE ACT DATED 14.03.2016 AND DIRECTED THE LD. PR. CIT TO DECIDE CASE AFRESH AFTER PROVIDI NG SUFFICIENT OPPORTUNITY TO THE ASSESSEE. RAJDHANI LAND & HOUSING 4 5. IN COMPLIANCE TO THE ORDER OF THIS TRIBUNAL DATE D 20.09.2019 LD. PR. CIT AGAIN CARRIED OUT THE PROCEEDINGS U/S 263 O F THE ACT. DETAILS WERE CALLED FROM THE ASSESSEE TO WHICH IT WAS SUBMI TTED THAT THE DETAILS ALREADY FILED ON 11.03.2016 AND SUBMISSIONS DATED 12.12.2016 MAY BE CONSIDERED. HOWEVER, LD. PR. CIT WAS OF THE VIEW THAT LD. AO HAS ALLOWED THE DEDUCTION U/S 80IB(10) OF THE ACT MERELY BY OBTAINING THE COMPLETION CERTIFICATE BUT WITHOUT CONDUCTING NECESSARY ENQUIRY REGARDING COMPLETION O F HOUSING PROJECT. ACCORDINGLY LD. PR. CIT AFTER PLACING RELI ANCE ON CERTAIN JUDICIAL PRECEDENTS HELD THAT THE ASSESSMENT ORDER U/S 143(3) DATED 31.03.2014 PASSED BY THE LD. AO FOR A.Y. 2007-08 IS SET ASIDE AND DIRECTED TO LD. AO TO MAKE IT DE NOVO, AFTER PROPER EXAMINATION ENQUIRY AND VERIFICATION OF ALL ASPECTS AND GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. 6. AGGRIEVED ASSESSEE IS NOW IN APPEAL BEFORE THIS TRIBUNAL RAISING FOLLOWING GROUNDS: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE & IN LAW, THE ORDER PASSED BY THE LD. PR.CIT IS UNSUSTAINABLE BOT H ON LAW AND FACTS AND THEREFORE THE SAME BE KINDLY QUASHED. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE FINDING OF THE LD. PR. CIT THAT SINCE NO PROPER EN QUIRIES REGARDING COMPLETION OF HOUSING PROJECT HAS BEEN MADE BY THE AO THE ORDER IS PREJUDICIAL TO THE INTEREST OF REVENUE ARE WHOLLY WRONG AND UNJUSTIFIED AND, THEREFORE, SUCH FINDINGS BE QUASHED AND IT BE HELD THAT THE AO HAS PASSED RAJDHANI LAND & HOUSING 5 THE ASSESSMENT ORDER AFTER FULL APPLICATION OF MIND AND AFTER HAVING EXAMINED ALL MATERIAL ON RECORD AND THEREFORE, THE ASSESSMENT ORDER PASSED BY THE AO IS NEITHER ERRONEOUS NOR PREJUDICI AL TO THE INTEREST OF REVENUE. THE ORDER OF THE LD. P. CIT U/S 263, THERE FORE, BE QUASHED. 7. LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED R EFERRING TO THE FOLLOWING WRITTEN SUBMISSIONS AND SUBMITTED THAT TH E LD. AO HAS CONDUCTED SUFFICIENT ENQUIRY AND MADE PROPER APPLIC ATION OF MIND AND IN LIGHT OF THE DOCUMENTARY EVIDENCES ALLOWED T HE CLAIM U/S 80IB(10) OF THE ACT:- 1. ASSESSMENT U/S 143(3) WAS COMPLETED ON 27.11.2009 W HEREIN THE CLAIM OF ASSESSEE U/S 80IB(10) OF RS. 1,11,55,537 WAS DISALL OWED. THE MATTER TRAVELLED BEFORE THE HON'BLE BENCH VIDE ITA NO. 558/LND/2010 AND THE ORDER WAS PRONOUNCED ON 25.04.2012. HON'BLE BENCH SET ASIDE T HE MATTER TO THE FILE OF LD. AO GIVING THE FOLLOWING TWO DIRECTIONS - [PB 04-08, 26-32] A. TO MAKE ENQUIRY WITH REGARDS TO THE INFRASTRUCTU RE FACILITIES DEVELOPED BY THE ASSESSEE IN TERMS OF THE APPROVAL FOR THE HOUSING P ROJECT GRANTED BY THE MUNICIPAL AUTHORITY, BHOPAL. B. TO DECIDE THE ISSUE OF ELIGIBILITY OF THE ASSESSEE FOR DEDUCTION U/S 80IB(10) AS PER THE LAW AFTER CONSIDERING THE COMPLETION CERTIFICAT E ISSUED BY THE MUNICIPAL CORPORATION. 2. IN THE SET-ASIDE PROCEEDINGS, LD. AO AFTER VERIFYIN G THE LETTER DATED 29.03.2014 ISSUED BY THE BHOPAL MUNICIPAL CORPORATION CONCLUDE D THAT THE ENTIRE PROJECT WAS COMPLETED WITHIN THE STIPULATED PERIOD. ACCORDINGLY , THE CLAIM OF ASSESSEE U/S 80IB(10) OF RS. 1,11,55,537 WAS ALLOWED BY THE LD. AO VIDE ORDER DATED 31.03.2014. [PB 33-34] 3. THIS ORDER OF LD. AO DATED 31.03.2014 ARISING OUT O F SET-ASIDE PROCEEDINGS BECAME THE SUBJECT MATTER FOR INVOKING THE PROVISIO NS OF SECTION 263. 4. ORDER U/S 263 WAS PASSED BY LD. PR.CLT ON 14.03.201 6. AGAINST THIS ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE THE HON'BLE BEN CH VIDE ITA NO. 475/LND/2016. HON'BLE BENCH SET ASIDE THE MATTER TO THE FILE OF LD. PR.CIT DIRECTING TO DECIDE THE MATTER AFTER PROVIDING SUFF ICIENT OPPORTUNITY TO THE ASSESSEE VIDE ITS ORDER PRONOUNCED ON 26.10.201B. [PB 35-40, 55-65] 5. PURSUANT TO THE DIRECTION OF THE HON'BLE BENCH OF I TAT, ORDER U/S 263 WAS PASSED BY LD. PR.CLT ON 20.09.2019. AGAINST THIS OR DER OF LD. PR.CLT, THE ASSESSEE IS BEFORE YOUR HONOURS. 6. IT IS SUBMITTED THAT IN THE SET-ASIDE ASSESSMENT PR OCEEDINGS, LD. AD VERIFIED THE LETTER DATED 29.03.2014 WHEREIN IT IS SPECIFICALLY MENTIONED THAT THE ENTIRE PROJECT WAS COMPLETED BY THE ASSESSEE WITHIN THE STIPULATED TIME PERIOD. [PB 71] 7. IN THE LETTER DATED 29.03.2014, IT IS ALSO MENTIONE D THAT A COMPLETION RAJDHANI LAND & HOUSING 6 CERTIFICATE HAS ALREADY BEEN ISSUED VIDE LETTER NO. 275 DATED 12.11.2009 BY THIS OFFICE. THIS COMPLETION CERTIFICATE WAS ALSO P LACED ON RECORD BEFORE THE LD. AD. THE LETTER FURTHER MENTIONS THAT IN FEBRUAR Y 200B A LETTER WAS ALSO ISSUED ON THE BASIS OF PHYSICAL VERIFICATION OF THE PROPERTY, COPY OF WHICH WAS ALSO PLACED ON RECORD BEFORE LD. AD. [PB 68-72] B. LD. AO BASED ON THE DOCUMENTARY EVIDENCES PLACED ON RECORD ALLOWED THE CLAIM OF THE ASSESSEE U/S BO(IB)(10} OF RS. 1,1 1,55,537. ONE OF THE PLAUSIBLE VIEWS WAS TAKEN BY THE LD. AO BASED ON DO CUMENTARY EVIDENCES, APPLICABLE LAW AND THE JURISPRUDENCE AVA ILABLE AT THAT POINT OF TIME. 9. ENQUIRY CONDUCTED BY LD. AD - NO LACK OF ENQUIRY - THE PROCEEDINGS WERE INITIATED BASED ON DIRECTIONS GIVEN BY THE HON'BLE BENCH. IN RESPONSE TO THE NOTICE ISSUED U/S 143(2}, ASSESSEE PLACED ON RE CORD ALL THE NECESSARY DOCUMENTS TO SUBSTANTIATE ITS CLAIM FOR DEDUCTION U /S BOIB(10}. LD. AO VERIFIED AND CONSIDERED THESE DOCUMENTS FOR ALLOWIN G THE CLAIM OF ASSESSEE U/S BOIB(10}. 10.APPLICATION OF MIND BY THE LD. AD IT IS SUBMITTE D THAT IN THE SET-ASIDE ASSESSMENT PROCEEDINGS, LD. AO VERIFIED THE LETTER DATED 29.03.2014 WHEREIN IT IS SPECIFICALLY MENTIONED THAT THE ENTIR E PROJECT WAS COMPLETED BY THE ASSESSEE WITHIN THE STIPULATED TIME PERIOD. [PB 71] 11.THERE IS NOTHING ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF THE REVENUE OWING TO WHICH PROCEEDINGS U/S 263 COULD BE INITIAT ED. 12.LT IS HUMBLY THAT THE INSTANT PROCEEDINGS INITIA TED U/S 263 BE QUASHED. CONSIDERING THE ABOVE FACTS, CIRCUMSTANCES OF THE C ASE, SUBMISSIONS MADE, DOCUMENTS ON RECORD BOTH BEFORE LD. AO AND LD. PR. CIT AND APPLICABLE JUDICIAL PRECEDENT, THE REVISIONARY PROCEEDINGS INV OKED U/S 263 BY THE LD. PR. CIT OUGHT TO BE QUASHED. 8. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEM ENTLY ARGUED SUPPORTING THE ORDER OF LD. PCIT. 9. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THE ASSESSEE HAS CHALLENGED THE ASSUMPTI ON OF JURISDICTION BY LD. PR. CIT U/S 263 OF THE ACT AND HAVE ALSO CHALLENGED THE FINDING OF LD. PR. CIT SET ASIDE THE ASSESSMENT ORDER U/S 143(3) OF THE ACT VIDE ORDER DATED 31.03.2014. RAJDHANI LAND & HOUSING 7 10. TO EXAMINE THIS ASPECT WHETHER LD. PCIT HAS JUS TIFIED IN HOLDING THE ORDER OF LD. A.O AS ERRONEOUS AND PREJU DICIAL TO THE INTEREST OF REVENUE, WE WILL FIRST GO THROUGH THE R ELEVANT PROVISION OF SECTION 263 OF THE ACT:- 263. (1) THE PRINCIPAL COMMISSIONER OR COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING UNDER THIS ACT , AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE ASSESSING OFFI CER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE RE VENUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTE R MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SU CH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSESSMENT, OR CANCELLING THE ASSESSM ENT AND DIRECTING A FRESH ASSESSMENT. EXPLANATION 1.FOR THE REMOVAL OF DOUBTS, IT IS HER EBY DECLARED THAT, FOR THE PURPOSES OF THIS SUB-SECTION, (A) AN ORDER PASSED ON OR BEFORE OR AFTER THE 1 ST DAY OF JUNE, 1988 BY THE ASSESSING OFFICER SHALL INCLUDE (I) AN ORDER OF ASSESSMENT MADE BY THE ASSISTANT COMMISSIONER OR DEPUTY COMMISSIONER OR THE INCOME-TAX OFFICER ON T HE BASIS OF THE DIRECTIONS ISSUED BY THE JOINT COMMISSIONER UNDER SECTION 144A; (II) AN ORDER MADE BY THE JOINT COMMISSIONER IN E XERCISE OF THE POWERS OR IN THE PERFORMANCE OF THE FUNCTIONS OF AN ASSES SING OFFICER CONFERRED ON, OR ASSIGNED TO, HIM UNDER THE ORDERS OR DIRECTIONS ISSUED BY THE BOARD OR BY THE PRINCIPAL CHIEF COM MISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL DIRECTOR GENERAL O R DIRECTOR GENERAL OR PRINCIPAL COMMISSIONER OR COMMISSIONER AUTHORIS ED BY THE BOARD IN THIS BEHALF UNDER SECTION 120; (B) 'RECORD' SHALL INCLUDE AND SHALL BE DEEMED ALW AYS TO HAVE INCLUDED ALL RECORDS RELATING TO ANY PROCEEDING UN DER THIS ACT AVAILABLE AT THE TIME OF EXAMINATION BY THE PRINCI PAL COMMISSIONER OR COMMISSIONER; (C) WHERE ANY ORDER REFERRED TO IN THIS SUB-SECTI ON AND PASSED BY THE ASSESSING OFFICER HAD BEEN THE SUBJECT MATTER OF A NY APPEAL FILED ON OR BEFORE OR AFTER THE 1ST DAY OF JUNE, 1988, THE POWERS OF THE PRINCIPAL COMMISSIONER OR] COMMISSIONER UNDER THIS SUB-SECTION SHALL EXTEND AND SHALL BE DEEMED ALWAYS TO HAVE EX TENDED TO SUCH MATTERS AS HAD NOT BEEN CONSIDERED AND DECIDED IN SUCH APPEAL. EXPLANATION 2.FOR THE PURPOSES OF THIS SECTION, IT IS HEREBY DECLARED THAT AN ORDER PASSED BY THE ASSESSING OFFICER SHALL BE D EEMED TO BE ERRONEOUS RAJDHANI LAND & HOUSING 8 IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, IF, IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER, (A) THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE; (B) THE ORDER IS PASSED ALLOWING ANY RELIEF WITHO UT INQUIRING INTO THE CLAIM; (C) THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WIT H ANY ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE BOARD UNDER SECTION 119 ; OR (D) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE W ITH ANY DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, RENDERED BY THE JURISDICTIONAL HIGH COURT OR SUPREME COURT IN THE CASE OF THE ASS ESSEE OR ANY OTHER PERSON. (2) NO ORDER SHALL BE MADE UNDER SUB-SECTION (1) A FTER THE EXPIRY OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER SOUGHT TO BE REVISED WAS PASSED. (3) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SECT ION (2), AN ORDER IN REVISION UNDER THIS SECTION MAY BE PASSED AT ANY T IME IN THE CASE OF AN ORDER WHICH HAS BEEN PASSED IN CONSEQUENCE OF, OR TO GIVE EFFECT TO, ANY FINDING OR DIRECTION CONTAINED IN AN ORDER OF THE APPELLATE TRIBUNAL, NATIONAL TAX TRIBUNAL, THE HIGH COURT OR THE SUPREME COURT. EXPLANATION.IN COMPUTING THE PERIOD OF LIMITATION FOR THE PURPOSES OF SUB- SECTION (2), THE TIME TAKEN IN GIVING AN OPPORTUNIT Y TO THE ASSESSEE TO BE REHEARD UNDER THE PROVISO TO SECTION 129 AND ANY PERIOD DURING WHICH ANY PROCEEDING UNDER THIS SECTION IS STAYED BY AN ORDER OR INJUNCTION OF ANY COURT SHALL BE EXCLUDED. 11. ON A BARE PERUSAL OF THE SUB-SECTION (1) WOULD REVEAL THAT THE POWERS OF REVISION GRANTED BY SECTION 263 TO THE LEARNED COMMISSIONER HAVE FOUR COMPARTMENTS. IN THE FIRST P LACE, THE LEARNED COMMISSIONER MAY CALL FOR AND EXAMINE THE R ECORDS OF ANY PROCEEDINGS UNDER THIS ACT. FOR CALLING OF THE RECO RD AND EXAMINATION, THE LEARNED COMMISSIONER WAS NOT REQUI RED TO SHOW ANY REASON. IT IS A PART OF HIS ADMINISTRATIVE CONT ROL TO CALL FOR THE RECORDS AND EXAMINE THEM. THE SECOND FEATURE WOULD COME WHEN HE RAJDHANI LAND & HOUSING 9 WILL JUDGE AN ORDER PASSED BY AN ASSESSING OFFICER ON CULMINATION OF ANY PROCEEDINGS OR DURING THE PENDENCY OF THOSE PRO CEEDINGS. ON AN ANALYSIS OF THE RECORD AND OF THE ORDER PASSED BY T HE ASSESSING OFFICER, HE FORMED AN OPINION THAT SUCH AN ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE RE VENUE. BY THIS STAGE THE LEARNED COMMISSIONER WAS NOT REQUIRED THE ASSIS TANCE OF THE ASSESSEE. THEREAFTER THE THIRD STAGE WOULD COME. TH E LEARNED COMMISSIONER WOULD ISSUE A SHOW-CAUSE NOTICE POINTI NG OUT THE REASONS FOR THE FORMATION OF HIS BELIEF THAT ACTION UNDER SECTION 263 IS REQUIRED ON A PARTICULAR ORDER OF THE ASSESSING OFFICER. AT THIS STAGE THE OPPORTUNITY TO THE ASSESSEE WOULD BE GIVE N. THE LEARNED COMMISSIONER HAS TO CONDUCT AN INQUIRY AS HE MAY DE EM FIT. AFTER HEARING THE ASSESSEE, HE WILL PASS THE ORDER. THIS IS THE FOURTH COMPARTMENT OF THIS SECTION. THE LEARNED COMMISSION ER MAY ANNUL THE ORDER OF THE ASSESSING OFFICER. HE MAY ENHANCE THE ASSESSED INCOME BY MODIFYING THE ORDER. 12. IT IS WELL SETTLED LAW THAT FOR INVOKING THE PR OVISIONS OF SECTION 263 OF THE ACT BOTH THE CONDITIONS THAT THE ORDER M UST BE ERRONEOUS RAJDHANI LAND & HOUSING 10 AND PREJUDICIAL TO THE INTEREST OF REVENUE NEEDS TO BE SATISFIED. THIS RATIO STANDS LAID DOWN BY VARIOUS HON'BLE COURTS. 13. HON'BLE JURISDICTIONAL HIGH COURT OF MADHYA PRA DESH IN THE CASE OF H.H. MAHARAJA RAJA POWER DEWAS (1983) 15 TAXMAN 363 IN PARA 10 OF THIS ORDER HELD THAT HOWEVER, THE FIRST ARGUMENT, VIZ., THAT AN ASSESSMENT ORDER WITHOUT COMPLIANCE WITH THE PROCED URE LAID DOWN IN SECTION 144B IS ERRONEOUS BUT NOT PREJUDICIAL TO TH E INTERESTS OF THE REVENUE CONFERRING REVISIONAL JURISDICTION ON THE C OMMISSIONER UNDER SECTION 263(1), HAS FORCE. UNDER SECTION 263(1) TWO PRE-REQUISITES MUST BE PRESENT BEFORE THE COMMISSIONER CAN EXERCISE THE REVISIONAL JURISDICTION CONFERRED ON HIM. FIRST IS THAT THE OR DER PASSED BY THE ITO MUST BE ERRONEOUS. SECOND IS THAT THE ERROR MUST BE SUCH THAT IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF THE ORDER IS ERRONEOUS BUT IT IS NOT PREJUDICIAL TO THE INTERESTS OF THE REVEN UE, THE COMMISSIONER CAN NOT EXERCISE THE REVISIONAL POWERS UNDER SECTIO N 263(1) OF THE ACT. THERE CANNOT BE ANY PREJUDICE TO THE REVENUE ON ACC OUNT OF THE ITO'S FAILURE TO FOLLOW THE PROCEDURE PRESCRIBED UNDER SE CTION 144B, AND UNLESS THE PREJUDICE TO THE INTERESTS OF THE REVENU E IS SHOWN, THE JURISDICTION UNDER SECTION 263(1) CANNOT BE EXERCIS ED BY THE RAJDHANI LAND & HOUSING 11 COMMISSIONER, EVEN THOUGH THE ORDER IS ERRONEOUS. T HE ARGUMENT THAT SUCH AN ORDER MAY POSSIBLY BE CHALLENGED IN APPEAL BY THE ASSESSEE, AND FOR THIS REASON IT IS PREJUDICIAL TO THE INTERE STS OF THE REVENUE, HAS NO MERIT. SECTION 263(1) CLEARLY CONTEMPLATES THAT THE ORDER OF ASSESSMENT ITSELF SHOULD BE PREJUDICIAL TO THE INTE RESTS OF THE REVENUE AND THIS PREJUDICE HAS TO BE PROVED BY REFERENCE TO THE ASSESSMENT ORDER ONLY. IT CANNOT BE ARGUED THAT THERE IS SOME POSSIBILITY OF THE ASSESSMENT ORDER BEING CHALLENGED OR REVISED IN APP EAL AND, THEREFORE, ON ACCOUNT OF THIS CONTINGENCY, THE ORDE R BECOMES PREJUDICIAL TO THE INTERESTS OF THE REVENUE. [EMPH ASIS SUPPLIED] 14. HONBLE APEX COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. [2000] 243 ITR 83 ORDER PRONOUNCED ON 10.02.2000 HEAD NOTE 'SECTION 263 OF THE INCOME-TAX ACT, 1961 - REVISION - OF ORDERS PREJUDICIAL TO INTERESTS OF REVENUE - ASSESSMENT YE AR 1983-84 - WHETHER IN ORDER TO INVOKE SECTION 263 ASSESSING OF FICER'S ORDER MUST BE ERRONEOUS AND ALSO PREJUDICIAL TO REVENUE AND IF ONE OF THEM IS ABSENT, I.E., IF ORDER OF INCOME-TAX OFFICER IS ERR ONEOUS BUT IS NOT PREJUDICIAL TO REVENUE OR IF IT IS NOT ERRONEOUS BU T IS PREJUDICIAL TO REVENUE, RECOURSE CANNOT BE HAD TO SECTION 263(1) - HELD, YES - RAJDHANI LAND & HOUSING 12 WHETHER IF DUE TO AN ERRONEOUS ORDER OF ITO, REVENU E IS LOSING TAX LAWFULLY PAYABLE BY A PERSON, IT WILL CERTAINLY BE PREJUDICIAL TO INTERESTS OF REVENUE - HELD, YES - ASSESSEE-COMPANY ENTERED INTO AGREEMENT FOR SALE OF ESTATE OF RUBBER PLANTATION - AS PURCHASER COULD NOT PAY INSTALLMENTS AS SCHEDULED IN AGREEMENT, EXT ENSION OF TIME FOR PAYMENT OF INSTALLMENTS WAS GIVEN ON CONDITION OF V ENDEE PAYING DAMAGES FOR LOSS OF AGRICULTURAL INCOME AND ASSESSE E PASSED RESOLUTION TO THAT EFFECT - ASSESSEE SHOWED THIS RE CEIPT AS AGRICULTURAL INCOME - RESOLUTION PASSED BY ASSESSEE WAS NOT PLAC ED BEFORE ASSESSING OFFICER - ASSESSING OFFICER ACCEPTED ENTR Y IN STATEMENT OF ACCOUNT FILED BY ASSESSEE AND ACCEPTED SAME - COMMI SSIONER UNDER SECTION 263 HELD THAT SAID AMOUNT WAS NOT CONNECTED WITH AGRICULTURAL ACTIVITIES AND WAS LIABLE TO BE TAXED UNDER HEAD 'INCOME FROM OTHER SOURCES' - WHETHER, WHERE ASSESSING OFFI CER HAD ACCEPTED ENTRY IN STATEMENT OF ACCOUNT FILED BY ASSESSEE, IN ABSENCE OF ANY SUPPORTING MATERIAL WITHOUT MAKING ANY ENQUIRY, EXE RCISE OF JURISDICTION BY COMMISSIONER UNDER SECTION 263(1) W AS JUSTIFIED - HELD, YES 15. HONBLE GUJARAT HIGH COURT IN THE CASE OF SMT. MINALBEN S. PARIKH [1995] 215 ITR 81 ORDER PRONOUNCED ON 17.10.1994 PARA RAJDHANI LAND & HOUSING 13 12 FROM THE AFORESAID, IT CAN WELL BE SAID THAT THE W ELL-SETTLED PRINCIPLE IN CONSIDERING THE QUESTION AS TO WHETHER AN ORDER IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE OR NOT IS TO ADDRESS ONESELF TO THE QUESTION WHETHER THE LEGITIMATE REVENUE DUE TO THE EXCHEQUER HAS BEEN REALISED OR NOT OR CAN BE REALISED OR NOT IF HIS ORDERS UNDER CONSIDERATION ARE ALLOWED TO STAND. FOR ARRIVING AT THIS CONCLUSION, IT BECOMES NECESSARY AND RELEVANT TO CONSIDER WHETHER THE INCOME IN RESPECT OF WHICH TAX IS TO BE REALISED, HAS BEEN SU BJECTED TO TAX OR NOT OR IF IT IS SUBJECTED TO TAX, WHETHER IT HAS BEEN S UBJECTED TO TAX AT A RATE AT WHICH IT COULD YIELD THE MAXIMUM REVENUE IN ACCORDANCE WITH LAW OR NOT. IF INCOME IN QUESTION HAS BEEN TAXED AN D LEGITIMATE REVENUE DUE IN RESPECT OF THAT INCOME HAD BEEN REAL ISED, THOUGH AS A RESULT OF ERRONEOUS ORDER HAVING BEEN MADE IN THAT RESPECT, IN OUR OPINION, THE COMMISSIONER CANNOT EXERCISE POWERS FO R REVISING THE ORDER UNDER SECTION 263 MERELY ON THE BASIS THAT TH E ORDER UNDER CONSIDERATION IS ERRONEOUS. IF THE MATERIAL IN THAT REGARD IS AVAILABLE ON THE RECORD OF THE ASSESSEE CONCERNED, THE COMMIS SIONER CANNOT EXERCISE HIS POWERS BY IGNORING THAT MATERIAL WHICH LINKS THE INCOME CONCERNED WITH THE TAX REALIZATION MADE THEREON. TH E TWO QUESTIONS ARE INTER-LINKED AND THE AUTHORITY EXERCISING POWER S UNDER SECTION RAJDHANI LAND & HOUSING 14 263 IS UNDER AN OBLIGATION TO CONSIDER THE ENTIRE M ATERIAL ABOUT THE EXISTENCE OF INCOME AND THE TAX WHICH IS REALIZABLE IN ACCORDANCE WITH LAW AND FURTHER WHAT TAX HAS IN FACT BEEN REALISED UNDER THE ALLEGED ASSESSMENT ORDERS.[EMPHASIS SUPPLIED] 16. AT THIS STAGE, BEFORE CONSIDERING THE MULTI-FOL D CONTENTIONS OF THE LEARNED REPRESENTATIVES, WE DEEM IT PERTINENT T O TAKE NOTE OF THE FUNDAMENTAL TESTS PROPOUNDED IN VARIOUS JUDGMENTS R ELEVANT FOR JUDGING THE ACTION OF THE COMMISSIONER OF INCOME-TA X TAKEN UNDER SECTION 263. THE INCOME-TAX APPELLATE TRIBUNAL IN T HE CASE OF MRS. KHAIIZA S. OOMERBHOY V. ITO [2006] 101 TIJ 1095 (MUM), ANALYSED IN DETAIL VARIOUS AUTHORITATIVE PRONOUNCEMENTS INCLUDI NG THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. V. CIT [2000] 243 ITR 83 (SC) AND HAS PROPOUNDED THE FOLLOWING BROADER PRINCIPLE TO JUDGE THE ACTION OF THE COMMIS SIONER OF INCOME- TAX TAKEN UNDER SECTION 263. (I) THE COMMISSIONER OF INCOME-TAX MUST RECORD SA TISFACTION THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. BOTH THE CONDITIONS MUST BE FULFILLED. (II) SECTION 263 CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE ASSESSING OFFI CER AND IT WAS ONLY WHEN AN ORDER IS ERRONEOUS THAT THE SECTIO N WILL BE ATTRACTED. (III) AN INCORRECT ASSUMPTION OF FACTS OR AN INCOR RECT APPLICATION OF LAW WILL SUFFICE THE REQUIREMENT OF ORDER BEI NG ERRONEOUS. (IV) IF THE ORDER IS PASSED WITHOUT APPLICATION OF MIND, SUCH ORDER RAJDHANI LAND & HOUSING 15 WILL FALL UNDER THE CATEGORY OF ERRONEOUS ORDER. (V) EVERY LOSS OF REVENUE CANNOT BE TREATED AS PRE JUDICIAL TO THE INTERESTS OF THE REVENUE AND IF THE ASSESSING OFFICER HAS ADOPTED ONE OF THE COURSES PERMISSIBLE UNDER L AW OR WHERE TWO VIEWS ARE POSSIBLE AND THE ASSESSING OFFICER H AS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER OF INCOME-TAX DOES N OT AGREE. IF CANNOT BE TREATED AS ERRONEOUS ORDER, UNLESS THE VIEW TAK EN BY THE ASSESSING OFFICER IS UNSUSTAINABLE UNDER LAW . (VI) IF WHILE MAKING THE ASSESSMENT, THE ASSESSING OFFICER EXAMINES THE ACCOUNTS, MAKES ENQUIRIES, APPLIES HIS MIND TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND DE TERMINE THE INCOME, THE COMMISSIONER OF INCOME-TAX, WHILE EXE RCISING HIS POWER UNDER SECTION 263 IS NOT PERMITTED TO SUBSTITUTE HIS ESTIMATE OF I NCOME IN PLACE OF THE INCOME ESTIMATED BY THE ASSESSING OFFICER. (VII) THE ASSESSING OFFICER EXERCISES QUASI-JUDICI AL POWER VESTED IN HIM AND IF HE EXERCISES SUCH POWER IN ACCORD ANCE WITH LAW AND ARRIVE AT A CONCLUSION, SUCH CONCLUSION CANNOT BE TERMED TO BE ERRONEOUS SIMPLY BECAUSE THE COMMISSIONER OF INCOM E-TAX DOES NOT FEEL SATISFIED WITH THE CONCLUSION. (VIII) THE COMMISSIONER OF INCOME-TAX, BEFORE EXER CISING HIS JURISDICTION UNDER SECTION 263 MUST HAVE MATERIAL ON RECORD TO ARRIVE AT A SATISFACTION. (IX) IF THE ASSESSING OFFICER HAS MADE ENQUIRIES DURING THE C OURSE ASSESSMENT PROCEEDINGS ON THE RELEVANT ISSUES AND T HE ASSESSEE HAS DETAILED EXPLANATION BY A LETTER IN WRITING AND THE ASSESSING ALLOWS THE CLAIM ON BEING SATISFIED WIT H THE EXPLANATION OF THE ASSESSEE, THE DECISION OF THE ASSESSING OF FICER CANNOT BE HELD TO BE SIMPLY BECAUSE IN HIS ORDER HE DOES NOT MAKE AN ELABORATE DISCUSSION IN THAT REGARD. 17. NOW EXAMINING THE FACTS IN LIGHT OF SETTLED JUD ICIAL PRECEDENTS REFERRED HEREINABOVE. WE OBSERVE THAT THE ISSUE OF SECTION 80IB(10) OF THE ACT RAISED IN THE INSTANT CASE HAS COME UP B EFORE THIS TRIBUNAL AND THE SAME ARE DECIDED VIDE ORDER DATED 25.04.2012 DIRECTING THE LD. AO TO DECIDE THE ISSUE AFRESH IN LIGHT OF VARIOUS DOCUMENTS FURNISHED. THE RELEVANT EXTRACT OF THE OR DER OF TRIBUNAL IS MENTIONED BELOW: RAJDHANI LAND & HOUSING 16 RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSE D. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION, DEVELOPMENT AND BUILDING HOUSING PROJ ECTS. DURING THE YEAR, UNDER CONSIDERATION, THE RETURN WAS FILED AT AN INC OME OF RS. 1,58,470/- AFTER CLAIMING DEDUCTION U/S 80IB(10) OF THE ACT FO R RS.1,11,55,537/-. IN THE COURSE OF ASSESSMENT U/S 143(3) OF THE ACT, THE AO DECLINED THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT WHICH WAS FURTHER CONFIRMED BY THE LEARNED CIT(A) AND THE ASSESSEE IS IN FURTHER APPEA L BEFORE US. 3. FROM RECORD WE FIND THAT DURING THE YEAR, UNDER CONSIDERATION, THE ASSESSEE HAS UNDERTAKEN A HOUSING PROJECT UNDER THE NAME OF VARDHMAN GREEN PARK AT KHASRA NOS. 36, 38 AND 41, KITONIYA K ACHIYAN, GRAM SHERMA KALA, BHOPAL. THE APPROVAL FOR THE PROJECT W AS OBTAINED FROM THE MUNICIPAL CORPORATION ON 13.12.2004 AND 10.5.2005. THE ASSESSEE APPLIED FOR ISSUANCE OF COMPLETION CERTIFICATE TO THE MUNIC IPAL CORPORATION ON 29.11.2007. HOWEVER, THE COMPLETION CERTIFICATE WAS ISSUED ON 6.6.2009. 4. THE AO STATED THAT THE ASSESSEE IS MERELY A CONT RACTOR AND HAS NOT DEVELOPED ANY HOUSING PROJECT. HE OBSERVED THAT NO REGISTRY WAS MADE FOR THE CONSTRUCTION WORK DONE BY THE ASSESSEE FIRM, TH ERE WAS REGISTRY OF LAND ONLY AND AFTER COMPLETING THE CONSTRUCTION WORK AS PER THE AGREEMENT, THE HOUSES WERE HANDED OVER TO THE CUSTOMERS. THUS, AS PER THE AO, NO PROJECT, AS A WHOLE, WAS COMPLETED BY THE ASSESSEE FIRM. THE AO ALSO OBSERVED THAT THE COMPLETION CERTIFICATE WAS TO BE OBTAINED BY 31.3.2009 WHICH WAS NOT OBTAINED THOUGH A CERTIFICATE DATED 6.6.2009 WA S PRODUCED LATER DURING THE ASSESSMENT PROCEEDINGS. 5. WE ALSO FIND THAT THE LANDS ON WHICH THE ASSESSE E HAS DEVELOPED THE HOUSING PROJECT WERE BUSINESS ASSETS OF THE FIRM. I T HAS ENTERED INTO A PARTNERSHIP AGREEMENT DATED 6.2.2003 WITH FOUR PART IES MENTIONED THEREIN. OUT OF THESE FOUR PARTIES, SHRI PUNITA GODHA AND SA NGITA GODHA WERE PARTNERS OF THE ASSESSEE FIRM. THE LAND SO CONTRIBU TED WAS CREDITED TO THE CAPITAL ACCOUNT OF THE PARTNERS. LATER ON, THE AGRE EMENT DATED 2ND APRIL, 2004 WAS EXECUTED WHICH WAS SUPPLEMENT TO THE PREVI OUS PARTNERSHIP AGREEMENT MADE ON 6.2.2003. THE SAID LAND SO CONTRI BUTED WAS TO BE TREATED AS ABSOLUTE PROPERTY OF THE PARTNERSHIP FIR M. ON THIS LAND, THE ASSESSEE HAS CONSTRUCTED THE HOUSES FOR WHICH APPRO VAL WAS TAKEN FROM MUNICIPAL CORPORATION ON 13.12.2004 AND 10.5.2005. THEREAFTER, THE ASSESSEE FIRM ENTERED INTO AGREEMENT FOR SALE OF PL OTS OF LAND TO THE RESPECTIVE BUYERS ON WHICH AS PER THE AGREEMENT CON STRUCTION WAS TO BE DONE BY THE ASSESSEE FIRM. THIS AGREEMENT WAS ENTER ED INTO BY THE ASSESSEE JUST TO ENABLE THE BUYERS TO HAVE LOAN FRO M THE FINANCIAL INSTITUTIONS. HOWEVER, THE POSSESSION AND FIRST LIE N OVER THE PLOTS OF LAND SO SOLD REMAINED WITH THE ASSESSEE TILL SUCH TIME THE COMPLETE SALE VALUE WAS RECEIVED BY IT. THEREAFTER, THE ASSESSEE CONSTRUCTE D HOUSES THEREON AND RAJDHANI LAND & HOUSING 17 POSSESSION WAS HANDED OVER TO THE RESPECTIVE BUYERS AFTER RECEIVING THE SALE CONSIDERATION. THUS, THE MODUS OPERANDI ADOPTE D BY THE ASSESSEE FOR SALE OF HOUSE NOWHERE STANDS IN THE WAY FOR CLAIM O F DEDUCTION U/S 80IB(10) OF THE ACT. THE CONTENTION OF THE LEARNED CIT DR WAS THAT THE ASSESSEE HAS MERELY SOLD PLOTS TO THE BUYERS AND TH E BUYERS HAVE PAID STAMP DUTY ON PURCHASE OF SUCH PLOTS OF LAND WHICH FALLS U/S 17(1 A) OF THE REGISTRATION ACT , 1908, THEREFORE, TRANSFER OF LAND HAS TAKEN PLACE ON THE DATE OF REGISTRATION AND THE ASSESSEE HAS RECEIVED CONSIDERATION FOR THE SAME. AS PER THE LEARNED CIT DR IN SUCH A SITUATION , THE ASSESSEE WAS NO MORE THE OWNER OF THE LAND. THE WORK OF CONSTRUCTIO N WAS DONE BY THE ASSESSEE ACCORDING TO THE REQUIREMENTS OF EACH LAND BUYER AND AS SUCH IT WAS MERELY IN THE CAPACITY OF WORKS CONTRACTOR. THE REAFTER, RELYING ON THE DECISION IN THE CASE OF B.D. PATIL & SONS; 35 SOT 1 71 HE CONTENDED THAT THE ASSESSEE WAS NOT ELIGIBLE FOR CLAIM OF DEDUCTION U/ S 80IB(10) OF THE ACT IN TERMS OF EXPLANATION SO INSERTED. WE HAVE CAREFULLY GONE THROUGH THE DECISION IN THE CASE OF B.D. PATIL & SONS (SUPRA), THE FACTS OF WHICH ARE ENTIRELY DIFFERENT WHEREIN THE CLAIM WAS MADE FOR D EDUCTION U/S 80-IA IN RESPECT OF DEVELOPMENT, MAINTENANCE AND OPERATION O F INFRA-STRUCTURE FACILITIES. HOWEVER, IN THE INSTANT CASE BEFORE US, THE CLAIM OF THE ASSESSEE U/S 80IB(10) IS WITH RESPECT TO THE HOUSING PROJECT AND NOT FOR ANY INFRA- STRUCTURE FACILITY. ACCORDINGLY, THE PROPOSITION LA ID DOWN THEREIN CANNOT BE APPLIED TO THE ASSESSEE'S CASE. THERE IS NO DISPUTE TO THE WELL SETTLED PROPOSITION TO THE EFFECT THAT THE CLAIM OF DEDUCTI ON UNDER SECTION 80IB(10) OF THE ACT IS ONLY AVAILABLE TO THE DEVELOPERS AND NOT TO THE CONTRACTORS, MEANING THEREBY THAT IN ADDITION TO TH E CONSTRUCTION OF THE HOUSES, THE ASSESSEE IS ALSO REQUIRED TO UNDERTAKE DEVELOPMENT OF INFRA- STRUCTURE FACILITIES LIKE SEVERAGES, ELECTRICITY, R OADS, ETC. THUS, MERE CONSTRUCTION OF THE HOUSES DOES NOT COME UNDER THE PURVIEW OF THE DEFINITION OF 'DEVELOPER'. IN THE INSTANT CASE, IT IS NOT CLEAR AS TO WHAT INFRA- STRUCTURE FACILITIES HAVE BEEN DEVELOPED BY THE ASS ESSEE FIRM IN RESPECT OF THE HOUSING PROJECT FOR WHICH APPROVAL HAS BEEN OBT AINED FROM THE MUNICIPAL CORPORATION ON 13.12.2004 AND 10.5.2005. IN THE LETTER DATED 12.11.2009 THE MUNICIPAL AUTHORITY, BHOPAL, HAD INT IMATED THE AO VIDE ITS LETTER NO. 275 THAT IN RESPECT OF PERMISSION NO. 27 9 DATED 10.5.2005, KHASRA NOS. 36, 41 AND 44, THE ASSESSEE HAD CONSTRU CTED THE HOUSES. THERE IS NO MENTION AS TO COMPLETION OF PROJECT AS A WHOLE. IN THE INTEREST OF JUSTICE, WE RESTORE THIS ISSUE TO THE FILE OF THE A O FOR DECIDING IT AFRESH AFTER MAKING FULL INQUIRY WITH REGARD TO THE INFRA-STRUCT URE FACILITIES DEVELOPED BY THE ASSESSEE IN TERMS OF APPROVAL FOR THE HOUSING P ROJECT SO GRANTED BY MUNICIPAL AUTHORITY, BHOPAL, IN ADDITION TO THE CON STRUCTION OF THE HOUSES AND MORE PRECISELY IN TERMS OF OUR ABOVE OBSERVATIO N. WE DIRECT ACCORDINGLY. 6. SO FAR AS THE PERMISSION OF THE PROJECT GIVEN IN THE NAMES OF PARTNERS OF THE FIRM IS CONCERNED, AS PER OUR CONSIDERED VIEW, THAT DOES NOT STAND IN RAJDHANI LAND & HOUSING 18 THE WAY OF ALLOWING THE CLAIM OF DEDUCTION U/S 80IO B(10) OF THE ACT. EVEN WHERE THE APPROVAL IS GIVEN IN THE NAMES OF PARTNER S WHO HAVE CONTRIBUTED LAND TO THE FIRM FOR EXECUTION OF THE HOUSING PROJE CT, THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT CANNOT BE DECLINED PROVIDED OTHER CONDITIONS OF SECTION 80IB(10) OF THE ACT ARE FULFILLED BY THE ASSESSEE. THUS, WE DO NOT FIND ANY MERIT IN THE OBSERVATION OF THE AO FOR DEC LINING THE CLAIM OF DEDUCTION ON THE PLEA OF THE PROJECT APPROVAL BEING ISSUED IN THE NAMES OF PARTNERS OF THE FIRM IN PLACE OF THE FIRM ITSELF. 7. WITH REGARD TO THE COMPLETION CERTIFICATE, WE FI ND THAT THE ASSESSEE HAS APPLIED TO THE OFFICE OF THE MUNICIPAL CORPORATION, BHOPAL, VIDE LETTER DATED 29.11.2007 WHICH WAS DULY ACKNOWLEDGED VIDE THEIR R UBBER STAMP DATED 26.12.2007. VIDE THIS LETTER, THE ASSESSEE HAS INFO RMED THE CORPORATION REGARDING COMPLETION OF WORK AND FURTHER REQUESTED FOR ISSUE OF COMPLETION CERTIFICATE. THE MUNICIPAL CORPORATION, BHOPAL, ISS UED THE COMPLETION CERTIFICATE DATED 6.6.2009 WITH RESPECT TO ITS PERM ISSION NO. 1343 DATED 13.12.2004 WHICH WAS ALSO FURNISHED BEFORE THE AO. IN RESPECT OF THE COMPLETION CERTIFICATE FOR PERMISSION NO. 0279 A LE TTER DATED 12.11.2009 WAS ISSUED DIRECTLY ADDRESSING TO THE AO WHEREIN CO MPLETION OF THE HOUSES WAS CONFIRMED THOUGH THE COMPLETION CERTIFICATE FOR THE HOUSING PROJECT WAS NOT ISSUED. THE ASSESSEE HAS ALSO PLACED THIS LETTE R ALONG WITH SYNOPSIS WHICH HAS BEEN OBTAINED UNDER RTI ACT FROM THE OFFICE OF THE MUNICIPAL CORPORATION, BHOPAL. THE ISSUE WITH REGARD TO THE D ATE ON WHICH COMPLETION CERTIFICATE IS REQUIRED TO BE ISSUED HAS BEEN DEALT WITH BY THE COORDINATE BENCH OF THE TRIBUNAL VIDE ITS ORDER DATED 6.12.201 0 IN THE CASE OF D.K. CONSTRUCTION, ITA NO. 243/IND/2010 30.11.2011, WHER EIN FOLLOWING WAS THE PRECISE OBSERVATION OF THE BENCH :- '7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREF ULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND RELEVANT MATERI AL PLACED ON RECORD TOWARDS WHICH OUR ATTENTION WAS INVITED DURING THE COURSE OF HEARING BY THE LD. AUTHORIZED REPRESENTATIVE AND THE LD. SENIOR D.R. P ROVISIONS OF SECTION 80IB ALLOWS CLAIM FOR DEDUCTION IN RESPECT OF HOUSING P ROJECT, WHICH HAS BEEN APPROVED PRIOR TO 1.4.2004 AND ALSO COMPLETED BEFORE 31.3.2008. DURING THE COURSE OF ASSESSMENT WITH REGARD TO ASSE SSEE'S CLAIM OF DEDUCTION U/S 80IB IN RESPECT OF ITS D.K.HONEY HOME S PROJECT, THE AO HAS ASKED THE ASSESSEE TO FURNISH THE CERTIFICATE OF CO MPLETION OF THIS PROJECT M/S. D.K. HONEY HOMES. THE AO ALSO DIRECTLY CALLED INFORMATION FROM LOCAL AUTHORITIES BY ISSUING SUMMONS U/S 133(6) AND A LET TER WAS ISSUED BY THE COMPETENT AUTHORITY DATED 11TH NOVEMBER, 2008, CONF IRMING THAT NO COMPLETION CERTIFICATE HAS BEEN ISSUED BY THIS OFFI CE. ACCORDINGLY, THE ASSESSEE'S CLAIM FOR DEDUCTION U/S 80-IB WAS DECLIN ED. SECTION 80IB CLEARLY DEFINES THE DATE OF COMPLETION AS 'DATE OF COMPLETI ON OF CONSTRUCTION OF THE RAJDHANI LAND & HOUSING 19 HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WH ICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS I SSUED BY THE LOCAL AUTHORITIES', IT MEANS LOCAL AUTHORITIES IS COMPETE NT TO CERTIFY THE DATE OF COMPLETION OF HOUSING PROJECT. THE DATE OF ISSUE OF SUCH LETTER BY THE LOCAL AUTHORITIES IS NOT SO CRUCIAL BUT IT SHOULD HAVE CL EARLY MENTIONED THE DATE OF COMPLETION OF PROJECT. WHEN THE PROJECT IS COMPLETE D ON 31.3.2008 AND THE ASSESSEE HAS INFORMED REGARDING SUCH COMPLETION, TH E LOCAL AUTHORITIES MAY TAKE ITS OWN TIME FOR ISSUE OF CERTIFICATE, WHI CH MAY BE EVEN AFTER 6- 7 MONTHS, BUT THE LETTER SO ISSUED BY THE LOCAL AUT HORITIES SHOULD CLEARLY MENTION THE DATE OF COMPLETION OF SUCH PROJECT. MER ELY BECAUSE SUCH CERTIFICATE IS ISSUED AFTER GAP OF 8-9 MONTHS OR EV EN ONE YEAR, WILL NOT ADVERSELY AFFECT THE ASSESSEE IF IT HAS MENTIONED C LEARLY THE DATE OF COMPLETION OF PROJECT PRIOR TO 31.3.2008. ONCE THE LETTER FOR COMPLETION OF PROJECT IS GIVEN BY THE ASSESSEE TO THE LOCAL AUTHO RITY, IT IS THE DUTY OF THE LOCAL AUTHORITY TO VERIFY PHYSICALLY THE PROJECTS S TATED TO BE COMPLETED FROM ITS OWN PARAMETERS. THIS PROCESS MAY TAKE TIME AND, THEREFORE, THE DATE OF ISSUE OF LETTER IS NOT SO CRUCIAL TO DETERMINE THE ASSESSEE'S ELIGIBILITY FOR CLAIM OF DEDUCTION AS PER EXPLANATION (II) OF SECTION 80IB(10)(A) OF THE INCOME-TAX ACT, 1961. WHAT IS CRUCIAL IS DATE MENTI ONED IN THE LETTER SO ISSUED CERTIFYING COMPLETION OF THE PROJECT. THUS, THE DATE OF ISSUE OF LETTER IS NOT IMPORTANT, BUT THE DATE MENTIONED IN THE LETTER CERTIFYING COMPLETION OF PROJECT IS IMPORTANT. WE, THEREFORE, DO NOT FIND AN Y MERIT IN THE OBSERVATION OF THE LOWER AUTHORITIES TO THE EFFECT THAT THE DAT E OF COMPLETION SHALL BE TAKEN THE DATE ON WHICH CERTIFICATE IS PHYSICALLY I SSUED BY THE LOCAL AUTHORITIES. 8. IN VIEW OF THE ABOVE DISCUSSION, WE RESTORE THE MATTER BACK TO THE FILE OF AO AND ASSESSEE IS AT LIBERTY TO PROCURE THE REQUIR ED LETTER/CERTIFICATE FROM THE LOCAL AUTHORITY CLEARLY MENTIONING THEREIN THE DATE OF COMPLETION OF THE PROJECT. THE AO IS TO DECIDE THE ISSUE AFRESH AS PE R LAW AFTER CONSIDERING THE LETTER OF COMPLETION IF ANY FURNISHED BY THE AS SESSEE. WE DIRECT ACCORDINGLY. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ' 8. IN VIEW OF THE ABOVE, WE RESTORE THE MATTER TO T HE FILE OF THE AO FOR DECIDING THE SAME AFRESH IN TERMS OF OUR ABOVE DECI SION AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE 18. WE FURTHER OBSERVE THAT LD. AO COMMENCED THE AS SESSMENT PROCEEDINGS AFRESH ON THE DIRECTION OF THIS TRIBUNA L AND ISSUED A RAJDHANI LAND & HOUSING 20 NOTICE U/S 143(2) OF THE ACT DATED 20.01.2014 ALONG WITH QUERY LETTER CALLING FOR VARIOUS DETAILS AND DOCUMENTS IN ORDER TO VERIFY THE DEDUCTION U/S 80IB(10) OF THE ACT. RELEVANT DETAILS WERE FILED AND ALL THE EVIDENCES WERE EXAMINED. THIS FACT IS DISCERNAB LE FROM PARA 1.3 OF THE ASSESSMENT ORDER DATED 31.03.2014 WHEREIN LD . AO HAS MADE FOLLOWING OBSERVATION: 1.3THE CASE WAS TRANSFERRED TO THIS OFFICE BY THE O RDER OF THE HON'BLE COMMISSIONER OF INCOME TAX BHOPAL U/S 127(1) OF THE INCOME TAX ACT, 1961 DATED 29.03.2014. A NOTICE U/S 143(2) WAS ISSU ED ON 29.03.2014 ITSELF FIXING THE CASE FOR HEARING ON 30.03.2014. S HRI RAKESH NEMA, ADVOCATE ATTENDED HEARING OF THE CASE HELD ON 30.03 .2014 AND STATED THAT ALL THE DETAILS REQUIRED VIDE QUESTIONNAIRE ISSUED TO THE ASSESSEE HAVE ALREADY BEEN FURNISHED DURING THE COURSE OF ASSESSM ENT PROCEEDINGS BEFORE THE DCIT-1(1), BHOPAL AND ARE AVAILABLE ON RECORD A ND AS PER DIRECTION OF HON'BLE I.T.A.T.S DIRECTION THE ASSESSEE HAS FURNI SHED ALL NECESSARY DOCUMENTS ALONG WITH SUBMISSION WHICH IS PLACED ON RECORD. ON VERIFICATION OF CLARIFICATION LETTER DATED 29.03.2014 ISSUED BY BHOPAL MUNICIPAL CORPORATION, IT IS FOUND THAT ENTIRE PROJECT OF THE ASSESSEE WAS COMPLETED WITHIN STIPULATED PERIOD IS FOUND CORRECT. HENCE CL AIM OF THE ASSESSEE U/S 80IB(10) IS CONSIDERED AND ALLOWED DEDUCTION U/S 1, 11,55,537/-. 2.1 IN VIEW OF THE ABOVE FACTS, INCOME OF THE ASSES SEE AS OFFERED IN ITS RETURN IS HEREBY ACCEPTED. 19. THE ABOVE FINDING OF THE LD. AO EXAMINING THE C OMPLETION CERTIFICATE ISSUED BY BHOPAL MUNICIPAL CORPORATION DATED 06.06.2009 AND AGAIN A CLARIFICATION LETTER DATED 2 9.03.2014 WHICH WAS DIRECTLY CALLED BY THE LD. AO ASSERT THE FACT T HAT THE HOUSING PROJECT WAS COMPLETED WITHIN THE STIPULATED TIME AS PROVIDED U/S 80IB(10) OF THE ACT AND ACCORDINGLY CLAIM U/S 80IB( 10) OF THE ACT RAJDHANI LAND & HOUSING 21 WAS ALLOWED. WE FURTHER FIND THAT THE IMPUGNED ORDE R LD. PR. CIT HAS NOT MADE ANY INDEPENDENT ENQUIRY EVEN AFTER OBS ERVING THAT THE LD. AO HAS ALLOWED THE DEDUCTION U/S 80IB(10) OF TH E ACT AFTER OBTAINING THE COMPLETION CERTIFICATE, STILL HELD TH AT NO ENQUIRIES WERE CONDUCTED TO EXAMINE THE GENUINENESS OF COMPLETION OF HOUSING PROJECT. IN OUR OPINION UNDER THE PROVISION OF SECT ION 80IB(10) ASSESSEE HAS TO OBTAIN A COMPLETION CERTIFICATE FRO M A COMPETENT AUTHORITY WHICH IN THIS CASE IS THE BHOPAL MUNICIP AL CORPORATION WHICH IS A STATUTORY BODY WORKING UNDER A SEPARATE ACT. ONCE THE BHOPAL MUNICIPAL CORPORATION HAS GIVEN A CERTIFICAT E THAT HOUSING PROJECT HAS BEEN COMPLETED ON A CERTAIN DATES, REVE NUE AUTHORITIES CANNOT DENY THE DEDUCTION U/S 80IB(10) OF THE ACT A LLEGING THAT THE HOUSING PROJECT IS NOT COMPLETE. IN CASE THEY ARE N OT SATISFIED WITH THE CONTENTS OF THE COMPLETION CERTIFICATE ISSUED B Y BHOPAL MUNICIPAL CORPORATION, THEY HAVE OPTION TO FILE A W RIT BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT BUT CERTAINLY THE Y CANNOT DENY THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT WHICH TH E ASSESSE HAS CLAIMED AFTER OBTAINING ALL NECESSARY CERTIFICATE A S WELL AS THE CERTIFICATE FROM THE CHARTERED ACCOUNTANT AND HAVIN G FULFILLED ALL THE REQUIREMENTS OF THE PROVISIONS OF SECTION 80IB(10) OF THE ACT. RAJDHANI LAND & HOUSING 22 20. WE, THEREFORE, UNDER THE GIVEN FACTS AND CIRCUM STANCES OF THE CASE ARE OF THE CONSIDERED VIEW THAT THE LD. AO HAS CONDUCTED SUFFICIENT ENQUIRY, CALLED FOR ALL NECESSARY DETAIL S AND MADE PROPER APPLICATION OF MIND AND THUS IT CAN BE SAFELY CONCL UDED THAT THE ORDER U/S 143(3) DATED 31.03.2014 IS NEITHER ERRONE OUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE. WE, THUS, Q UASH THE IMPUGNED ORDER OF LD. PR. CIT FRAMED U/S 263 OF THE ACT AND RESTORE THE ASSESSMENT ORDER U/S 143(3) DATED 31.03.2014 AND AL LOW THE GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL. 21. IN THE RESULT, GROUNDS RAISED BY THE ASSESSEE A RE ALLOWED AND APPEAL FILED BY THE ASSESSEE IN ITANO.975/IND/2019 IS ALLOWED. ORDER PRONOUNCED AS PER RULE 34 OF I.T.A.T. RULES 1 963 ON 16.08.2021. SD/- (RAJPAL YADAV) SD/- (MANISH BORAD) VICE PRESIDENT A CCOUNTANT MEMBER INDORE; DATED : 16.08.2021 PATEL/PS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER ASSISTANT REGISTRAR, INDORE