M/S. D.V. REALTORS ,MUMBAI V. INCOME TAX OFFICER, WARD-2(3), THANE

ITA 3951/MUM/2024

AI Insights

The case involves M/s. D.V. Realtors appealing against a penalty imposed by the Income Tax Officer (ITO) under section 271(1)(c) following a disallowance made under section 80IB(10) for the Assessment Year 2012-13. The primary issues were the disallowance related to the allotment of three flats to a single family and the built-up area exceeding the prescribed limit. The CIT(A) had restricted the disallowance to proportionate amounts concerning the three flats after finding no violation regarding the area limit. The Tribunal, after reviewing the facts and previous rulings, concluded that the penalty was not justified as the assessee had acted under a bona fide belief that the law was not violated.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 26526 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Laws Referred To: Section 271(1)(c), Section 80IB(10)
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R.R. MAKWANA
• Assessee Lawyers: TARANG MEHTA
• Keywords: Bonafide belief
• Section: 271(1)(c); 80IB

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, ‘D’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No.3951/Mum/2024 (Assessment Year :2012-13) M/s. D.V. Realtors Ground Floor Shree Shashwat Opp. Sai Mansarovar Complex Near Pleasant Park Mira Bhayandar Road Mira Road East Thane Vs. ITO Ward-2(3), Thane PAN/GIR No.AAFFD1308P (Appellant) .. (Respondent) Assessee by Shri Tarang Mehta Revenue by Shri R.R. Makwana Date of Hearing 28/01/2025 Date of Pronouncement 28/02/2025 आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the assessee against order dated 12/06/2024 passed by NFAC, Delhi in relation to the penalty proceedings u/s. 271(1)(c) for the A.Y.2012-13. ITA No.3951/Mum/2024 D.V. Realtors 2 2. The assessee is mainly aggrieved by levy of penalty of Rs.11,60,640/- u/s.271(1)(c) on disallowance made u/s.80IB(10). The reason for disallowance of the ld. AO was that the three flats bearing No.701, 704 and 705 were allotted to one individual and his family members and thereby following the provisions of Section 80IB(10)(f) entire claim has to be disallowed; and secondly, the built-up area for 18 flats has exceeded the prescribed limit violating the provisions of Section 80IB(10)(c). The ld. CIT(A) in his detailed order held that only proportionate disallowance can be made with respect to the three flats only and the entire deduction u/s.80IB(10) cannot be disallowed and therefore, he restricted the disallowance of deduction. In so far as observation regarding 18 flats exceeding the area of per flat more than 1000 sq. ft. u/s.80IB(10)(c), after calling for remand report, ld. CIT(A) gave a categorical finding that none of the flats had exceeded limit of 1000 sq. ft, and there is no such violation. It is also brought on record that the Revenue’s appeal filed before the Tribunal has been dismissed after discussing each and every issue raised by the department. 3. Now penalty has been levied on part disallowance of Rs.11,60,640/-. The contention of the assessee was that clause ‘f’ of Section 80IB (10) was inserted w.e.f. 19/08/2009 and assessee had received all the payments in respect of three flats had also issued allotment letters prior to the insertion of this provision. These flats were allotted to three members of family separately and therefore, assessee was under a bonafide belief that there is no breach of condition as at that time there was no ITA No.3951/Mum/2024 D.V. Realtors 3 such provision under the Act. Accordingly, it has been contended that in these facts, no penalty should be levied. 4. After hearing both the parties and on perusal of the facts and material on record, we find that all the allegations made by the ld. AO to disallow the claim of deduction u/s.80IB(10) has been dealt and reversed by the ld. CIT(A) and the Tribunal. The only issue was proportionate disallowance with respect to three flats on which penalty has been levied. Once it has been brought on record that these flats were allotted and part payment was received prior to insertion of Clause ‘f’ of Section 80IB(10) as these flats were allotted to three different members of the family then, it cannot be held that assessee had concealed any particulars of income or there was any inaccurate particulars of income. Thus, penalty cannot be levied on these facts and accordingly, same is deleted. 5. In the result, appeal of the assessee is allowed. Order pronounced on 28th February, 2025. Sd/- (GIRISH AGRAWAL) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 28/02/2025 KARUNA, sr.ps ITA No.3951/Mum/2024 D.V. Realtors 4 Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// "