The ACIT- 1(2), Bhopal v. M/s Asnani Builders & Developers, Bhopal

ITA 177/IND/2013 | 2004-2005
Pronouncement Date: 08-10-2013 | Result: Dismissed

Appeal Details

RSA Number 17722714 RSA 2013
Assessee PAN AAFCA5950K
Bench Indore
Appeal Number ITA 177/IND/2013
Duration Of Justice 6 month(s) 3 day(s)
Appellant The ACIT- 1(2), Bhopal
Respondent M/s Asnani Builders & Developers, Bhopal
Appeal Type Income Tax Appeal
Pronouncement Date 08-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 08-10-2013
Assessment Year 2004-2005
Appeal Filed On 04-04-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH J.M. AND SHRI R.C.SHARM A A.M. PAN NO. : AA FCA5950K I.T.A.NO. 1 77 /IND/201 3 A.Y. : 2004-05 ACIT 1(2) BHOPAL VS. M/S.ASNANI BUILDERS & DEVELOPER BHOPAL. APPELLANT RESPONDENT I.T.A.NO. 162/IND/2013 A.Y. : 2005-06 M/S.ASNANI BUILDERS & DEVELOPER BHOPAL VS. ACIT 1(2) BHOPAL APPELLANT RESPONDENT ASSESSEE BY : SHRI H.P.VERMA ADV. AND SHRI GIRISH AGRAWAL C.A. RESPONDENT BY : SHRI R. A. VERMA SR. DR DATE OF HEARING : 27 . 0 9 .201 3 DATE OF PRONOUNCEMENT : 08 . 10 .201 3 -: 2: - 2 O R D E R PER R. C. SHARMA A.M. I.T.A.NO. 177/IND/2013: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER PASSED BY THE CIT(A) DATED 9.1.2013 FOR THE ASSESSMENT YE AR 2004-05 IN THE MATTER OF ORDER PASSED U/S 147/143(3) OF THE INCOME -TAX ACT 1961. 2. FOLLOWING GROUND HAS BEEN TAKEN BY THE REVENUE :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 29 52 969/-/- MADE BY THE ASSESSING OFFICER DISALLO WING DEDUCTION CLAIMED U/S 80IB(10) OF THE INCOME-TAX AC T 1961. 3. THE RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS P ERUSED. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A LIMITED COMPANY ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION DEVE LOPING LAND AND CONSTRUCTING HOUSING PROJECT. THE ASSESSEE HAD FILE D ITS ORIGINAL RETURN OF INCOME ON 29/10/2004 DECLARING INCOME OF RS.21 66 397/- AFTER CLAIMING DEDUCTION U/S 80IB (10) AT RS.29 52 969/-. A SEARCH AND SEIZURE OPERATIONS U/S 132(1) OF THE IT ACT WAS CARRIED OUT ON 02.11.2004. THEREAFTER THE ASSESSMENT WAS COMPLETE D U/S 153A -: 3: - 3 R.W.S. 143(3) OF IT ACT ON 29.12.2006 AFTER ALLOWIN G ASSESSEES CLAIM OF DEDUCTION U/S 80IB(10). THE ASSESSEE FILED AN AP PEAL AGAINST THIS ASSESSMENT ORDER BEFORE CIT (APPEALS)-I BHOPAL WHICH WAS DECIDED VIDE ORDER DATED 16.05.2007 WHEREIN CERTAIN RELIEF WERE ALLOWED AND APPEAL EFFECT WAS GIVEN VIDE ORDER DATED 20.06.2007 DETERMINING TAXABLE INCOME AT RS.21 66 397/-. SUBSEQUENTLY RE- ASSESSMENT PROCEEDINGS WERE INITIATED U/S 147 B Y ISSUING NOTICE U/S 148 OF IT ACT ON 05.03.2011. 4. THE AO COMPLETED THE RE-ASSESSMENT U/S 147 R.W.S. 1 43(3) ON 09.11.2011 DETERMINING TAXABLE INCOME AT RS. 51 19 366 WHEREIN THE APPELLANTS CLAIM OF DEDUCTION U/S 80IB (10) OF RS.29 52 969/- WAS DECLINED. 5. THE ASSESSING OFFICER OBSERVED THAT THE APPELLANT H AD TO COMPLETE THE PROJECT BY 31.03.2008 AND THE COMPLETI ON CERTIFICATE SHOULD HAVE BEEN TAKEN FROM THE MUNICIPAL CORPORATI ON CERTIFYING THE COMPLETION OF PROJECT. THE ASSESSING OFFICER NO TICED THAT THE APPELLANT HAD NOT PRODUCED ANY SUCH CERTIFICATE OF COMPLETION OF PROJECT AND THUS THE PROJECT WAS NOT COMPLETED BY 31.03.2008. IT WAS FURTHER STATED THAT THE MUNICIPAL CORPORATION BHOPAL VIDE LETTER DATED 19.04.2010 CONFIRMED THAT NO SUCH COMPLETION CERTIFICATE HAD -: 4: - 4 BEEN ISSUED TO THE ASSESSEE. THE ASSESSING OFFICER FURTHER OBSERVED THAT ASSESSEE COMPANY WAS REQUIRED TO SUBMIT AUDIT REPORT IN FORM 10CCB ALONG WITH THE RETURN FILED FOR THE ASSESSMEN T YEAR 2004-05 WHICH WAS NOT FURNISHED ALONGWITH THE RETURN OF INC OME FILED. AS THE APPELLANT HAD NOT FULFILLED THESE TWO CONDITIONS FO R CLAIM OF DEDUCTIONS U/S 80IB(10) THE ASSESSING OFFICER DISA LLOWED THE APPELLANT'S CLAIM OF DEDUCTION U/S 80IB (10) AMOUNT ING TO RS.29 52 969/-. 6. BY THE IMPUGNED ORDER THE LD. CIT(A) ALLOWED ASSES SEES CLAIM OF DEDUCTION U/S 80IB(10) AFTER HAVING THE FO LLOWING OBSERVATIONS :- 4.4 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AS ALSO THE OBSERVATION OF THE ASSESSING OFFICER INCLUDING ALL MATERIAL FACTS REGARDING DISALLOWANCE OF CLAIM U/S 80IB(10) THAT AUDIT REPORT IN FORM NO. 10CCB WAS NOT FILED WITH THE RETURN IT MAY BE NOTICED THAT THERE IS NO DISPUTE REGARDING THE FACT THAT AUDIT REPORT IN FORM NO.10CCB WAS FILED DURING THE RE- ASSESSMENT PROCEEDING. IN THIS BACKGROUND -: 5: - 5 KEEPING THE VIEW THE DECISION OF HONORABLE COURTS RELIED UPON BY THE APPELLANT INCLUDING THE JURISDICTIONAL HIGH COURT. IN MY VIEW SIMPLY NOT TILLING THE AUDIT REPORT WITH THE RETURN MAY NOT JUSTIFY REJECTION OF THE CLAIM U/S 80IB(10) OF IT ACT IF THE ASSESSEE HAD FURNISHED AUDIT REPORT IN FORM NO.10CCB DURING ASSESSMENT PROCEEDINGS. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS PANAMA CHEMICAL WORKS (2007) 292 ITR 197 HELD THAT IF THE ASSESSEE FAILS TO FILE SUCH REPORT ALON G WITH THE RETURN BUT FILES IT SUBSEQUENTLY BEFORE COMPLET ION OF ASSESSMENT ORDER IT MAY NOT BE FATAL TO THE CLA IM OF THE ASSESSEE OF DEDUCTION AND THE ASSESSING OFFICER SHOULD ACCEPT THE SAME. IT IS ALSO NOTICED THAT THE REQUISITE REPORT I.E. FORM NO. 10CCB WAS FILED BY T HE APPELLANT BEFORE COMPLETION OF THE ASSESSMENT. THEREFORE IN MY OPINION THIS CAN NOT BE A VALID GROUND FOR REJECTION OF CLAIM U/S 80IB (10) OF IT ACT. THIS FINDING IS FURTHER SUPPORTED BY FOLLOWING DECISIONS:- -: 6: - 6 (I) CIT V/S. RAMCO INTERNATIONAL (2009) 180 TAXM AN 584 (P 8; 11;) (II) ZENIT PROCESSING MILLS VS. CIT (1996) 219 I TR 21 (III) CIT V/S. SHIVA NAND ELECTRONICS (1994) 209 ITR 63 (MUMBAI) (IV) CIT V/S. MAHALAXMI RICE FACTORY (2007) 293 I TR 631(P& H) 4.4.1 THE ANOTHER GROUND FOR REJECTION OF CLAIM OF DEDUCTION U/S 80IB(10) WAS THAT THE APPELLANT HAD NOT COMPLETED THE PROJECT BY 31/03/2008 IN AS MUCH AS NO COMPLETION CERTIFICATE ISSUED BY MUNICIPAL CORPORATION LOCAL AUTHORITY DATED ON OR BEFORE 31.03.2008 WAS FILED. AS PER THE AO THE APPELLANT COMMENCED ITS PROJECT BEFORE 31/03/2001 AND AS PER THE AMENDMENTS MADE IN SECTION 80IB(10) VIDE FINANCE (NO.2) ACT 2004 W.E.F. 01/04/2005 THE APPELLANT WAS TO COMPLETE THE PROJECT BY 31/03/2008 AND THE DATE OF COMPLETION OF PROJECT WOULD HE THE DATE ON WHICH COMPLETION CERTIFICATE WAS ISSUED BY MUNICIPAL AUTHORITY. ADMITTEDLY NO COMPLETION -: 7: - 7 CERTIFICATE WAS ISSUED BY THE MUNICIPAL CORPORATION BEFORE 31.03.2008. THE APPLICANT HOWEVER CLAIMED THAT PROJECT WAS COMPLETED BEFORE 31/O3/2008 AND THAT I NTIMATION OF SUCH COMPLETION WAS ALSO GIVEN TO THE MUNICIPAL AUTHORITY. THESE FACTS WERE ALSO STATED BEFORE THE ASSESSING OFFICER. THE CONTENTION OF THE APPELLANT WAS THAT T HE REQUIREMENT OF COMPLETION CERTIFICATE FROM THE MUNICIPAL CORPOR ATION CAME INTO EXISTENCE W.E.F. 01/04/2005 I.E. FROM A.Y. 2005-06 AND THAT THERE WAS NO SUCH REQUIREMENT IN RESPECT OF A.Y. 20 04-05 UNDER CONSIDERATION. IT WAS STATED THAT THE AMENDMENTS MA DE IN SECTION 80IB(10) W.E.F 01/04/2005 ARE PROSPECTIVE A ND NOT RETROSPECTIVE IN NATURE. THE APPELLANT ALSO RELIED UPON THE JUDGMENT OF JURISDICTIONAL ITAT INDORE IN THE C ASE OF ESSARJEE CONSTRUCTIONS PVT. LTD. IN APPEAL NO.116/2009 WHEREIN IT WAS HELD THAT AMENDMENT MADE W.E.F 01/04/2005 ARE PROSPECTIVE AND CAN BE APPLIED IN RESPECT OF A.Y. 2005-06 AND SUBSEQUENT YEARS ONLY. SINCE THE ASSESSMENT YEAR INVOLVED IN T HE CASE OF THE APPELLANT UNDER CONSIDERATION IS AY 200 4- 05 AND HENCE THE PROVISIONS OF THE AMENDED SECTION -: 8: - 8 80IB(10) ARE NOT APPLICABLE IN THE CASE OF THE APPE LLANT FOR A.Y. 2004-05. 4.4.2 IT MAY BE NOTED THAT THE LAW APPLICABLE WILL BE THE LAW AS ON 1ST APRIL OF THE ASSESSMENT YEAR IS UNIVERSALLY ACCEPTED PROPOSITION AS HAD BEEN POINTE D OUT IN A NUMBER OF CASES E.G. IN RELIANCE JUTE & INDUSTRIES LTD. VS. CIT (1979) 120 ITR 921 (SC) IT IS HELD THAT 'ASSESSMENT FOR ONE ASSESSMENT YEAR NOT T O BE AFFECTED BY LAW IN FORCE IN ANOTHER ASSESSMENT YEAR. IT IS CARDINAL PRINCIPLE OF LAW THAT THE LAW TO BE APPLIED IS THAT IN FORCE IN THE ASSESSMENT YEAR UNL ESS OTHERWISE PROVIDED EXPRESSLY OR BY NECESSARY IMPLICATION.' THE HON'BLE MADRAS HIGH COURT ALSO OBSERVED IN OM SINDHOORI CAPITAL INVESTMENTS LTD. VS. JOINT CIT (2005) 272 ITR 427 (MAD) THAT THE LAW THAT GOVERNS THE 'ASSESSMENT IS THE LAW THAT IS PREVAILING ON APRIL 1 OF THE ASSESSMENT YEAR IN QUESTION.' IT WOULD BE RELEVANT TO REPRODUCE THE PROVISIONS OF SUB-SECTION (10) OF SECTION 80IB AS W ERE -: 9: - 9 ON STATUTE FOR A.Y. 2004-05 AS UNDER:- (10) THE AMOUNT OF PROFITS IN CASE OF AN UNDERTAK ING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 31 ST DAY OF MARCH. 2005 BY A LOCAL AUTHORITY SHALL HE HUNDRED PER CENT OF THE PROFITS DERIVED IN ANY PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF - (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1 ST DAY OF OCTOBER 1998; (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHICH HAS A MINIMUM AREA OF ONE ACRE: -AND (C) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP AR EA OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI OR MUMB AI OR WITHIN TWENTY-FIVE KILOMETERS FROM THE MUNICIPAL LI MITS -: 10: - 10 OF THESE CITIES AND ONE THOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE. ' FROM THE ABOVE PROVISIONS OF SECTION 80IB(10) AS APPLICABLE TO A.Y. 2004-05 IT IS CLEAR THAT THERE WAS NO CONDITION FOR FURNISHING COMPLETION CERTIFICATE FROM A LOCAL AUTHORITY TO CLAIM DEDUCTION U/S 80IB(10) IN A.Y.2004-05. THE AMENDED PROVISIONS OF SECTION 80IB BY THE FINANCE (NO.2) ACT 2004 W.E.F. 01.04.2005 A RE APPLICABLE PROSPECTIVELY IN RESPECT OF A.Y. 2005-06 AND SUBSEQUENT ASSESSMENT YEARS. HENCE THE APPELLANT'S CLAIM OF DEDUCTION U/S 80IB(10) COULD N OT BE DISALLOWED ON THE GROUND THAT THE APPELLANT HAD NOT FURNISHED COMPLETION CERTIFICATE FROM LOCAL AUTHORITY ON OR BEFORE 31.03.2008. THEREFORE IN VI EW OF THE ABOVE DISCUSSION THE DISALLOWANCE MADE BY T HE ASSESSING OFFICER OF APPELLANT'S CLAIM OF DEDUCTION U/S 80IB(10) OF RS.29 52 969/- IS HEREBY DELETED. THUS THE GROUNDS OF APPEAL NOS. 1.2 AND 6 TO 8 ARE ALLOWED. -: 11: - 11 7. AGAINST THE ABOVE ORDER OF CIT(A) THE REVENUE IS I N FURTHER APPEAL BEFORE US. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE G ONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOU ND FROM RECORD THAT THE ASSESSING OFFICER HAS DECLINED ASSESSEES CLAIM U/S 80IB ON TWO FOLDS; FIRST ASSESSEE DID NOT FILE AUDIT REPORT ALONGWITH THE RETURN; SECOND THE ASSESSEE HAS NOT FURNISHED COMPLETION C ERTIFICATE OF HOUSING PROJECT. 9. WITH REGARD TO FILING OF AUDIT REPORT THE ISSUE IS SQUARELY COVERED BY THE ORDER OF JURISDICTIONAL HIGH COURT I N THE CASE OF PANAMA CHEMICALS WORKS 292 ITR 197 WHEREIN IT HAS BEEN HELD THAT SINCE THE ASSESSEE HAS FAILED TO FILE SUCH REP ORT ALONGWITH THE RETURN BUT FILES IT SUBSEQUENTLY BEFORE COMPLETION OF ASSESSMENT ORDER IT CANNOT BE FATAL TO CLAIM OF THE ASSESSEE AND DEDUCTION AND ASSESSING OFFICER SHOULD ACCEPT THE SAME. IN THE IN STANT CASE BEFORE US THE REQUISITE REPORT IN FORM 10CCB WAS FILED BY THE ASSESSEE BEFORE COMPLETION OF ASSESSMENT. ACCORDINGLY WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DISREGARDING A SSESSING OFFICERS OBSERVATION REGARDING FILING OF AUDIT REPORT ALONGW ITH RETURN OF INCOME. -: 12: - 12 10. WITH REGARD TO FILING OF COMPLETION CERTIFICATE WE FOUND THAT THE ASSESSMENT YEAR UNDER CONSIDERATION IS 2004-05 WHEREAS AMENDMENT WAS BROUGHT IN STATUTE BY THE FINANCE ACT 2004 W.E.F. ASSESSMENT YEAR 2005-06. UP TO THE ASSESSMENT YEAR 2004-05 THE FILING OF COMPLETION CERTIFICATE WAS NOT A PRE-REQU ISITE CONDITION OF CLAIM OF DEDUCTION U/S 80IB. THE AMENDED PROVISIONS OF SECTION 80IB BY THE FINANCE ACT NO.2 OF 2004 W.E.F. 1.4.200 5 ARE APPLICABLE PROSPECTIVELY IN RESPECT OF ASSESSMENT YEAR 2005-06 AND SUBSEQUENT ASSESSMENT YEARS. I.T.A.T. INDORE BENCH HAVE TAKE N A CONSISTENT VIEW THAT CONDITION WITH REGARD TO FILING OF COMPLE TION CERTIFICATE IS APPLICABLE FROM ASSESSMENT YEAR 2005-06 AND NOT PRI OR TO IT. IN ASSESSEES OWN CASE IN I.T.A.NO. 6/IND/2012 VIDE OR DER DATED 19.12.2004 THE TRIBUNAL HAS HELD THAT AMENDMENT TO SECTION 80IB(10) WAS BROUGHT BY THE STATUTE W.E.F. ASSESSME NT YEAR 2005-06 ACCORDINGLY ASSESSEES CLAIM FOR DEDUCTION ON THE PLEA OF FOR NON- FILING OF COMPLETION CERTIFICATE CANNOT BE DECLINED IN THE ASSESSMENT YEAR 2003-04 UNDER CONSIDERATION. 11. IN VIEW OF THE ABOVE DISCUSSION WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR ALLOWING ASSESSEES CLAI M OF DEDUCTION U/S 80IB(10). -: 13: - 13 12. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISS ED. I.T.A.NO. 162/IND/2013: 13. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 22.1.2013 FOR THE ASSESSMENT YEAR 200 5-06. 14. IN THIS APPEAL FOLLOWING GROUNDS HAVE BEEN TAKEN B Y THE ASSESSEE :- 1. THE LEARNED C. I. T. (APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE REJECTION OF THE CLAIM OF DEDUCTION OF RS.55 50 202 /- U/S 80IB (10) FROM THE TOTAL RETURN ED INCOME OF THE APPELLANT. 2. THAT THE PROCEEDINGS U/S 148 ARE BAD IN LAW AS IT H AS BEEN INITIATED BEYOND 4 YEARS WITHOUT ANY FAILURE ON TH E PART OF THE APPELLANT TO DISCLOSE FULLY AND TRULY ALL THE M ATERIAL FACTS FOR THE A.Y. 2005-06. 3. THAT THE PROCEEDING INITIATED BY A.G. U/S 148 IS ME RELY A CHANGE OF OPINION AND IT IS NOT BASED ON ANY TANGIB LE MATERIAL HAVING LIVE-LINK TO FORM AN OPINION THAT I NCOME HAS ESCAPED ASSESSMENT. 4. THAT THE ORDER OF LEARNED A.G. DISPOSING OBJECTIONS RAISED BY THE APPELLANT IS NOT THE REASONED ONE AND IS FACTUA LLY INCORRECT. -: 14: - 14 5. 'THAT THE DEDUCTION U/S 80IB(10) CANNOT BE DENIED I N RESPECT OF A.Y. 2005-06 FOR THE NEED OF COMPLETION CERTIFIC ATE AS THIS PROJECT WAS APPROVED BEFORE 01.04.2005 (THE DATE OF AMENDMENT) AND ANY AMENDMENT WHICH IS NOT RETROSPE CTIVE SHALL NOT BE APPLICABLE TO THE YEAR PRECEDING TO TH E YEAR FROM WHICH THE AMENDMENT IS EFFECTIVE AND ANY NEW CONDIT ION INSERTED SUBSEQUENTLY SHALL NOT BE BINDING ON THE P ROJECTS APPROVED PRIOR TO THE AMENDMENT AND THE SAME CAN NO T BE THE REASON FOR REASSESSMENT PROCEEDINGS U/S 148. 15. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUS ED. THE ASSESSING OFFICER HAS DISALLOWED THE ASSESSEES CLA IM OF DEDUCTION U/S 80IB(10) ON THE PLEA OF NON-FILING OF COMPLETIO N CERTIFICATE. THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT IS A LIMITED COMPANY ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION DEVELOPING L AND AND CONSTRUCTING HOUSING PROJECT. THE APPELLANT HAD FILED ITS ORIGIN AL RETURN OF INCOME FOR A.Y. 2005-06 ON 30/10/2005 DECLARING INCOME OF RS. 33 02 470/- AFTER CLAIMING DEDUCTION U/S 80IB (10) AT RS. 55 50 202/-. SEARCH AND SEIZURE OPERATIONS U/S 132(1) OF THE IT ACT WERE CARRIED O UT ON 02.11.2004. THEREAFTER THE ASSESSMENT WAS COMPLETED U/S 153A R .W.S. 143(3) OF IT ACT ON 29.12.2006 IN WHICH APPELLANT'S CLAIM OF DEDUCTI ON U/S 80IB(10) WAS ALLOWED. THE APPELLANT FILED AN APPEAL AGAINST THIS ASSESSMENT ORDER BEFORE -: 15: - 15 CIT (APPEALS)-I BHOPAL WHICH WAS DECIDED VIDE ORDE R DATED 16.05.2007 WHEREIN CERTAIN RELIEF WERE ALLOWED AND APPEAL EFFE CT WAS GIVEN VIDE ORDER DATED 20.06.2007 DETERMINING TAXABLE INCOME AT RS. 33 02 470/-. SUBSEQUENTLY RE-ASSESSMENT PROCEEDINGS WERE INITIA TED U/S 147 BY ISSUING NOTICE U/S 148 OF IT ACT ON 05.03.2011 WHICH WAS SERVED UPON THE APPELLANT ON 07.03.2011. IN RESPONSE TO NOTICE U/S 148 THE APPELLANT SUBMITTED BEFORE THE AO THAT THE ORIGINAL RETURN FI LED ON 30.10.2005 MAY BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE U/S 148. THE REASONS RECORDED WERE ALSO SUPPLIED TO THE APPELLANT. THE A PPELLANT HAD FILED OBJECTIONS ON THE REASONS RECORDED FOR RE-OPENING O F THE ASSESSMENT. THE AO REJECTED THE OBJECTIONS RAISED BY THE APPELLANT VIDE HIS OFFICE LETTER DATED 03.11.2011. THE AO OBSERVED THAT THERE WAS NO CHANGE OF OPINION AND THE PROCEEDINGS U/S 147 WERE RIGHTLY INITIATED BY ISSUING NOTICE U/S 148. AFTER ISSUING NOTICES U/S 143(2) & 142( 1) AND CONSIDERING THE REPLY OF THE APPELLANT THE AO COMPLETED THE REASSESSMENT U/S 147 R.W.S. 143(3) ON 09.11.2011 DETERMINING TAXABLE INCOME AT RS. 88 52 672/- WHEREIN THE APPELLANT'S CLAIM OF DEDUCTION U/S 80IB(10) OF RS.5 5 50 202/- WAS DISALLOWED. 16. BY THE IMPUGNED ORDER THE LD. CIT(A) UPHELD THE AC TION OF THE REOPENING U/S 147 AFTER HAVING THE FOLLOWING OB SERVATIONS :- -: 16: - 16 3.4 I HAVE CAREFULLY CONSIDERED THE SUBMISSION O F THE APPELLANT AND FACTS OF THE CASE. IN THIS CASE THE AO IN THE SUBSEQUENT ASSESSMENT YEARS FOUND THAT THE APPELLANT HAD NOT COMPLETED THE CONSTRUCTION OF THE HOUSING PROJECT ON OR BEFORE 31.03.2008 ON WHICH DEDUCTION U/S 80IB(10) WAS CLAIMED IT WAS ALSO NOTICED BY THE AO THAT THE APPELLANT HAD NOT FURNISHED AUDIT REPORT IN FOR M NO. 10CCB ALONGWITH THE RETURN OF INCOME TILED FOR A. Y. 2005- 06 AND AS PER THE PROVISIONS OF SECTION 80IB(10) R.W.S. 80IB(13) & 80IA (7) THE DEDUCTION U/S 80IB(10) IS NOT ADMISSIBLE UNLESS THE ASSESSEE FURNISHES AUDIT REPO RT IN FORM NO. 10CCB ALONGWITH THE RETURN. THE AO REOPENED THE ASSESSMENT FOR A. Y. 2005-06 AFTER RECORDING THE FOLLOWING REASONS: 'THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME ON 30/10/2005 FOR A. Y 2005-06 DECLARING TOTAL INCOME OF RS 33 02 470/- AFTER CLAIMING DEDUCTION U/S 80IB (10) OF RS.55 50 202/-. THE ASSESSMENT WAS COMPLETED U/S 143(1) ON 29/12/12006. THEREAFTER SEARCH AND SEIZURE -: 17: - 17 ACTION WAS CONDUCTED ON THE ASSESSEE ON 29/11/2004 AND ASSESSMENT U/S 153A R.W.S 143(3) WAS COMPLETED ON 29/12/2006 WHEREIN THE CLAIM OF 80IB (10) WAS ALLOWED. THE ASSESSEE COMPANY DEALS IN THE BUSINESS OF DEVEL OPING & BUILDING HOUSING PROJECT. AS PER PROVISION OF SEC TION 80 IB (10) R.W.S. 80IA (7) THE DEDUCTION U/S 80IB (10 ) SHALL NOT BE ADMISSIBLE UNLESS BE ASSESSEE FURNISHES THE AUDIT ACCOUNTS ALONG WITH 10CCB REPORT. HOWEVER THE ASSESSEE COMPANY HAS NOT FILED THE 10CCB REPORT ALO NG WITH THE RETURN WHICH IS EVIDENT FROM THE RETURN FI LED. FURTHER THE ASSESSEE HAS COMMENCED ITS PROJECT BEF ORE 31/03/2001. THEREFORE ASSESSEE WAS REQUIRED TO COMPLETE ITS PROJECT BY 31/03/2008. HOWEVER THE ASSESSEE HAS NOT COMPLETED ITS PROJECT BY 31/03/200 8 OR NEITHER ANY PROJECT COMPLETION CERTIFICATE HAS BEEN ISSUED BY LOCAL AUTHORITY TO THE ASSESSEE NOR THE ASSESSEE HAS FURNISHED IT. THEREFORE THE DEDUCTION U/S 80 IB (10) OF RS.55 50 202/- WRONGLY CLAIMED BY THE ASSESSEE NEEDS TO BE WITHDRA WN. -: 18: - 18 THE ESCAPEMENT A INCOME AFORESAID OCCURRED BECAUSE OF REASON OF THE FAILURE ON THE PART OF THE ASSESSEE T O DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR ITS ASSESSMENT. IN VIEW OF ABOVE I HAVE REASON TO BELI EVE THAT INCOME CHARGEABLE TO TAX AMOUNTING TO RS. 55 50 202/- HAS ESCAPED ASSESSMENT FOR A.Y. 2005-06 WITHIN THE MEANING OF SECTION 147 OF THE INCOME INC OME- TAX ACT 1961. FROM THE ABOVE REASONS IT IS EVIDENTLY CLEAR THAT THE AO HAD SPECIFICALLY MENTIONED THAT INCOME HAD ESCAPED ASSESSMENT FOR A.Y. 2005-06 ON ACCOUNT OF FAILURE O F THE APPELLANT TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT I.E. NOT FURNISHING THE AU DIT REPORT IN FORM NO. 10CCB ALONGWITH THE RETURN OF IN COME AS WELL AS NOT COMPLETING THE CONSTRUCTION OF THE HOUS ING PROJECT WITHIN THE SPECIFIED PERIOD UPTO 31.03.2008 AND NOT FURNISHING PROJECT COMPLETION CERTIFICATE FROM THE LOCAL AUTHORITY AS REQUIRED U/S 8018(10) TO CLAIM DEDUCTI ON FOR A. Y.2005-06. IT IS NOT CASE OF MERE CHANGE OF OPINION . IT MAY BE RELEVANT TO REFER HERE THE BOARD'S INSTRUCTION N O.4 OF -: 19: - 19 2009 DATED 30.06.2009 WHEREIN IT WAS CLARIFIED REG ARDING DEDUCTION U/S 80IB( 10) AS UNDER :- '3. THE ABOVE ISSUE HAS BEEN CONSIDERED BY THE BOARD AND IT IS CLARIFIED AS UNDER .- (A) THE DEDUCTION CAN BE CLAIMED ON A YEAR-TO-YEA R BASIS WHERE THE ASSESSEE IS SHOWING PROFIT FROM PAR TIAL COMPLETION OF THE PROJECT IN EVERY YEAR. (B) IN CASE IT IS LATE FOUND THAT THE CONDITION OF COMPLETING THE PROJECT WITHIN THE SPECIFIED TIME-LI MIT OF 4 YEARS AS STATED IN SECTION 80-IB(10) HAS NOT BEEN S ATISFIED THE DEDUCTION GRANTED TO THE ASSESSEE IN THE EARLIE R YEARS SHOULD BE WITHDRAWN. ' IN THE INSTANT CASE DEDUCTION U/S 80IB(10) WAS ALL OWED TO THE APPELLANT IN EARLIER ASSESSMENT FOR A.Y. 2005-0 6 AS THE APPELLANT HAD SHOWN PROFITS FROM PARTIAL COMPLETION OF THE PROJECT IN THAT YEAR. BUT WHEN SUBSEQUENTLY IT WAS FOUND THAT THE APPELLANT HAD NOT COMPLETED THE CONSTRUCTI ON WITHIN SPECIFIED TIME LIMIT UPTO 31.03.2008 THE AO HAD RIGHTLY INITIATED RE-ASSESSMENT PROCEEDINGS TO WITH DRAW THE DEDUCTION U/S 80IB( 10) ALLOWED EARLIER ON ACCOUNT OF -: 20: - 20 FAILURE OF THE APPELLANT TO FURNISH COMPLETION CERT IFICATE FROM THE LOCAL AUTHORITY . THE LD. CIT(A) FURTHER OBSERVED AS UNDER :- 3.7 IN THE INSTANT CASE THE AO GATHERED FRESH MATE RIAL SUBSEQUENT TO THE COMPLETION OF ASSESSMENT THAT THE APPELLANT HAD NOT FURNISHED COMPLETION CERTIFICATE ISSUED BY THE LOCAL AUTHORITY TO DEMONSTRATE THAT CONSTRUCTION OF THE HOUSING PROJEC T WAS COMPLETED ON OR BEFORE 31.03.2008 AND THUS THERE WAS A FAIL URE ON THE PART OF THE APPELLANT TO FULFILL CONDITIONS LAID DOWN UNDER SECTION 80IB(10) AND THE APPELLANT WAS NOT ELIGIBLE FOR DEDUCTION U/ S 80IB (10) IN A.Y. 2005-06. THIS ACTION OF THE ASSESSING OFFICER WAS A LSO FORTIFIED BY THE BOARDS INSTRUCTION NO. 4 OF 2009 DATED 30.06.2 009 AS DISCUSSED ABOVE. 17. ON MERIT ALSO THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER FOR DECLINE OF CLAIM OF DEDUCTION U/S 80IB(10) AFTER HAVING THE FOLLOWING OBSERVATIONS :- -: 21: - 21 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AND FACTS OF THE CASE. AS REGARDS THE FIR ST GROUND OF DISALLOWANCE OF CLAIM U/S 80IB(10) THAT AUDIT REPORT IN FORM NO. 10CCB WAS NOT FILED WITH T HE RETURN IT MAY BE NOTICED THAT THERE IS NO DISPUTE REGARDING THE FACT THAT AUDIT REPORT IN FORM 10CCB WAS FILED DURING RE-ASSESSMENT PROCEEDING. IN THIS BACK GROUND KEEPING IN VIEW THE DECISIONS OF HON'BLE COURTS INCLUDING THE JURISDICTIONAL HIGH COURT IN MY VIEW SIMPLY NOT FILLING THE AUDIT REPORT WITH THE R ETURN MAY NOT JUSTIFY REJECTION OF THE CLAIM U/S 80IB(10) OF INCOME-TAX ACT 1961 IF THE ASSESSEE HAD FURNISHED AUDIT REPORT IN FORM NO. 10CCB DURING ASSESSMENT PROCEEDINGS. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. PANAMA CHEMICAL WORKS (2007) 292 ITR 197 HELD THAT IF THE ASSESSEE FAILS TO FILE SUCH REPORT ALONG WITH THE RETURN BUT FILES IT SUBSEQUEN TLY BEFORE COMPLETION OF ASSESSMENT ORDER IT MAY NOT B E FATAL TO THE CLAIM OF THE ASSESSEE OF DEDUCTION AND THE ASSESSING OFFICER SHOULD ACCEPT THE SAME. IT IS ALS O -: 22: - 22 NOTICED THAT THE REQUISITE REPORT I.E. FORM NO. 10 CCB WAS FILED BY THE APPELLANT BEFORE COMPLETION OF THE ASSESSMENT. THEREFORE IN MY OPINION THIS CAN NOT BE A VALID GROUND FOR REJECTION OF CLAIM U/S 80IB(10 OF INCOME-TAX ACT 1961 . THIS FINDING IS FURTHER SUPPORTED BY FOLLOWING DECISIONS:- (I) CIT VS. RAMCO INTERNATIONAL (2009) 180 TAXMAN 584 (P 8; LL;) (II) ZENIT PROCESSING MILLS VS. CIT (1996) 219 ITR 721 (III) CIT VS. SHIVA NAND ELECTRONICS (1994) 209 ITR 63(MUMBAI) (IV) CIT VS. MAHALAXMI RICE FACTORY (2007) 293 ITR 631 (P& H) 4.5 THE ANOTHER GROUND FOR REJECTION OF CLAIM OF DEDUCTION U/S 80IB(10) WAS THAT THE APPELLANT HAD NOT COMPLETED THE PROJECT BY 31-03-2008 IN AS MUCH AS NO COMPLETION CERTIFICATE ISSUED BY MUNICIPAL CORPORATION LOCAL AUTHORITY ON OR BEFORE 31.03.20 08 WAS FILED. AS PER THE AO THE APPELLANT COMMENCED I TS PROJECT BEFORE 31.03.2001 AND AS PER THE -: 23: - 23 AMENDMENTS MADE IN SECTION 80IB(10) VIDE FINANCE ( N 0.2) ACT 2004 W.E.F. 01/04/2005 THE APPELLANT WAS TO COMPLETE THE PROJECT BY 31 /03/2008 AND THE DATE OF COMPLETION OF PROJECT WOULD BE THE DATE ON WHICH COMPLETION CERTIFICATE WAS ISSUED BY MUNICIPA L AUTHORITY. ADMITTEDLY NO COMPLETION CERTIFICATE WAS ISSUED BY THE MUNICIPAL CORPORATION BEFORE 31.03.2008. THE APPLICANT HOWEVER CLAIMED THAT PROJECT WAS COMPLETED BEFORE 31 /03/2008 AND THAT INTIMATION OF SUCH COMPLETION WAS ALSO GIVEN TO THE MUNICIPAL AUTHORITY. THESE FACTS WERE ALSO STATED BEFORE THE ASSESSING OFFICER. THE CONTENTION OF THE APPELLANT WAS THAT THE REQUIREMENT OF COMPLETION CERTIFICATE FROM THE MUNICIPAL CORPORATION CARNE IN TO EXISTENCE W.E.F. 01/04/2005 AND NOT APPLICABLE IN THE CASE OF THE APPELLANT AS THE PROJECT WAS APPROVED BEFORE 01.04.2005. THIS CONTENTION OF THE APPELLANT IS NOT TENABLE. 4.6 IT MAY BE NOTED THAT THE LAW APPLICABLE WILL BE THE LAW AS ON 1 ST APRIL OF THE ASSESSMENT YEAR IS -: 24: - 24 UNIVERSALLY ACCEPTED PROPOSITION AS HAD BEEN POINTE D OUT IN A NUMBER OF CASES E.G. IN RELIANCE JUTE & INDUSTRIES LIMITED VS. CIT (1979) 120 ITR 921 (S.C .) IT IS HELD THAT ASSESSMENT FOR ONE ASSESSMENT YEAR NO T TO BE AFFECTED BY LAW IN FORCE IN ANOTHER ASSESSMEN T YEAR. IT IS CARDINAL PRINCIPLE OF LAW THAT THE LAW TO BE APPLIED IS THAT IN FORCE IN THE ASSESSMENT YEAR UNL ESS OTHERWISE PROVIDED EXPRESSLY OR BY NECESSARY IMPLIC ATION. THE HON'BLE MADRAS HIGH COURT ALSO OBSERVED IN OM SINDHOORI CAPITAL INVESTMENTS LTD. VS. JOINT CIT (2005) 272 ITR 427 (MAD) THAT THE LAW THAT GOVERNS THE 'ASSESSMENT IS THE LAW THAT IS PREVAILING ON APRIL 1 OF THE ASSESSMENT YEAR IN QUESTION.' IT WOULD BE RELEVANT TO REPRODUCE THE RELEVANT PROVISIONS OF SUB-SECTION (10) OF SECTION 80IB AS WERE ON STATUTE FOR A. Y. 2005-06 AS UNDER :- '(10) THE AMOUNT OF DEDUCTION IN THE CASE OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECT S APPROVED BEFORE THE 1ST DAY OF MARCH 2007 BY A LOCAL AUTHORITY SHALL BE HUNDRED PER CENT OF THE -: 25: - 25 PROFITS DERIVED IN ANY PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF - (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE I' DAY OF OCTOBER 1998 AND COMPLETE S UCH CONSTRUCTION -; (I) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY BEFORE THE 1ST DAY OF APRIL 2004 ON OR BEFORE THE 31ST DAY OF MARCH 2008; (II) IN A CASE WHERE A HOUSING PROJECT HAS BEEN OR IS APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF APRIL 2004 WITHIN FOUR YEARS FROM THE END OF T HE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPR OVED BY THE LOCAL AUTHORITY. EXPLANATION. - FOR THE PURPOSES OF THIS CLAUSE -- (I) IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HOUSING PROJECT IS OBTAINED MORE THAN ONCE SUCH HOUSING PR OJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE O N WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY: -: 26: - 26 (II) 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 ; (B) (C) . (D) . FROM THE ABOVE PROVISIONS OF SECTION 80IB(10) IT MAY BE NOTED THAT IN CLAUSE (A)( I) OF SECTION 80IB(10) IT IS CLEARLY MENTIONED THAT WHERE THE PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY ON OR AFTER 1 ST DAY OCTOBER 1998 AND BEFORE THE 1 ST DAY OF APRIL 2004 THE ASSESSEE HAS TO COMPLETE CONSTRUCTION OF SUCH P ROJECT ON OR BEFORE 31 ST DAY OF MARCH 2008. THUS THIS PROVISION CLEARLY ENVISAGES THAT THE PROVISIONS OF AMENDED SECTION 80 IB(10) WOULD BE APPLICABLE ON THE PROJECTS WHICH HAVE BEE N APPROVED EVEN BEFORE 1 ST APRIL 2004 AND ARE CONTINUING AFTER 01.04.2005. MOREOVER THE APPELLANT HAD CLAIM ED DEDUCTION U/S 80IB(10) FOR A. Y. 2005-06 AND THERE FORE THE PROVISIONS WHICH WERE ON STATUTES AS ON 1ST DAY OF APRIL OF THE ASSESSMENT YEAR WOULD BE APPLICABLE. HENCE THE -: 27: - 27 CONTENTION OF THE APPELLANT THAT AMENDED PROVISIONS OF SECTION 80IB(10) W.E.F. 01.04.2005 WERE NOT APPLICA BLE IN THE APPELLANT'S CASE BECAUSE THE PROJECT WAS APPROV ED BEFORE 01.04.2005 HAS NO FORCE. IN THIS CASE THE H OUSING PROJECT WAS APPROVED BY THE LOCAL AUTHORITY BEFORE 01.04.2004 AND THEREFORE THE APPELLANT WAS REQUIR ED TO COMPLETE THE CONSTRUCTION OF THE HOUSING PROJECT ON OR BEFORE 31.03.2008. AS PER EXPLANATION-(II) THE DATE OF CO MPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAK EN TO BE THE DATE ON WHICH THE COMPLETION CERTIFICATE IS ISS UED BY THE LOCAL AUTHORITY. THE ADMITTED FACT IN THIS CASE IS THAT THE LOCAL AUTHORITY HAD NOT ISSUED ANY COMPLETION CERTI FICATE TILL DATE IN THIS CASE. IN THE ABSENCE OF COMPLETION CER TIFICATE ISSUED BY THE LOCAL AUTHORITY IT CANNOT BE SAID TH AT CONSTRUCTION OF THE HOUSING PROJECT WAS COMPLETED B Y THE APPELLANT WITHIN THE STIPULATED TIME I.E. ON OR BEF ORE 31.03.2008 AS ENVISAGED IN THE PROVISIONS OF SECTIO N 80IB(10)(A)(I) OF THE ACT. SINCE THE CONDITION OF COMPLETING CONSTRUCTION WITHIN THE SPECIFIED TIME PERIOD WAS N OT FULFILLED BY THE APPELLANT THE APPELLANT WAS NOT E LIGIBLE FOR -: 28: - 28 DEDUCTION U/S 80IB(10). IT MAY BE NOTED THAT HON'BLE SUPREME COURT IN THE CASE OF PETRON ENGINEERING CONSTRUCTION (PVT.) LTD. VS. CENTRAL BOARD OF DIRECT TAXES (1989) 175 ITR 523 (S C) HELD IN THE CONTEXT OF CLAIM DEDUCTION U/S 80-0 AS UNDER :- 'FULFILLMENT OF THE OBJECTIVES OF THE PROVISIONS O F SECTION 80-0 WITHOUT FULFILLING THE CONDITIONS LAID DOWN IN PLAIN AND CLEAR LANGUAGE WILL NOT ENABLE THE ASSESS EE TO HAVE THE BENEFIT OF THE SECTION. IT IS TRUE THAT AN EXEMPTION PROVISION SHOULD BE L IBERALLY CONSTRUCTED BUT THIS DOES NOT MEAN THAT SUCH LIBER AL CONSTRUCTION SHOULD BE MADE EVEN BY DOING VIOLENCE TO THE PLAIN MEANING OF SUCH EXEMPTION PROVISION. LIBE RAL CONSTRUCTION WILL BE MADE WHEREVER IT IS POSSIBLE T O BE MADE WITHOUT IMPAIRING THE LEGISLATIVE REQUIREMENT AND THE SPIRIT OF THE POSITION. THEREFORE CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND LEGAL POSITION ON THE ISSUE INVOLVED I AM OF T HE CONSIDERED OPINION THAT SINCE THE APPELLANT HAD NOT FULFILLED THE CONDITION -: 29: - 29 LAID DOWN IN PLAIN AND CLEAR LANGUAGE OF CLAUSE (A) (I) READ WITH EXPLANATION-(II) OF SECTION 80IB(10) THE APPELLANT WAS NOT ELIGIBLE TO HAVE BENEFIT OF DEDUCTION U/S 80IB(10) FOR ASSESSMENT YEAR 2005-06. ACCORDINGLY THE DISALLOWANCE OF THE APPELLANTS CLAIM OF DEDUCTION U/S 80IB(10) OF RS. 55 50 202/- MADE BY THE ASSESSING OFFICER FOR ASSESSMENT YEAR 2005-06 IS CO NFIRMED. THUS THESE GROUNDS OF APPEAL ARE REJECTED. 18. AGAINST THE ABOVE ORDER OF CIT(A) THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 19. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORDS PERUSED. WE HAD ALSO DELIBERATED ON THE CASE LAWS CITED BY T HE LD. AUTHORIZED REPRESENTATIVE AND LD. SENIOR DR WITH REFERENCE TO VALIDITY OF REOPENING OF ASSESSMENT AFTER COMPLETION OF FOUR YE ARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. WE HAD ALSO DELIBE RATED ON THE CASE LAWS WITH RESPECT TO THE MERIT OF DISALLOWANCE OF D EDUCTION U/S 80IB(10) FOR NON-FURNISHING OF COMPLETION CERTIFICA TE. 20. FROM THE RECORD WE FOUND THAT AFTER COMPLETION OF ASSESSMENT U/S 153A READ WITH SECTION 143(3) ON 29. 12.2006 ASSESSMENT FOR ASSESSMENT YEAR 2005-06 WAS REOPENED U/S 147 FOR WITHDRAWAL OF DEDUCTION ALLOWED U/S 80IB(10) AS THE ASSESSEE HAS -: 30: - 30 NOT FURNISHED COMPLETION CERTIFICATE IN RESPECT OF PROJECT WHICH WAS REQUIRED TO BE COMPLETED BY 31 ST MARCH 2008. THEREAFTER REASSESSMENT ORDER WAS FRAMED U/S 147/143(3) AND DE DUCTION ALREADY ALLOWED U/S 80IB(10) WAS WITHDRAWN. THE BAS IC GRIEVANCE OF THE LD. AUTHORIZED REPRESENTATIVE WAS THAT THERE WA S NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRUE AND CORRE CT PARTICULARS IN THE RETURN OF INCOME WHICH ARE NECESSARY FOR ASSES SMENT ACCORDINGLY THE ASSESSING OFFICER WAS NOT JUSTIFIE D IN REOPENING THE ASSESSMENT WHICH WAS COMPLETED AFTER SEARCH U/S 15 3A READ WITH SECTION 143(3) OF THE INCOME-TAX ACT 1961. IT WAS ALSO PLEA OF THE LD. AUTHORIZED REPRESENTATIVE THAT WHILE FRAMING ASSESS MENT U/S 143(3) THE ASSESSING OFFICER HAS EXAMINED IN DETAIL THE AS SESSEES ELIGIBILITY FOR DEDUCTION U/S 80IB(10) AND AFTER DISALLOWING SO ME PART OF EXPENDITURE WHICH WERE NOT PERTAINING TO 80IB RECE IPTS WERE PROPORTIONATELY DISALLOWED. ACCORDINGLY REOPENING WAS NOT JUSTIFIED AS PER PRIVOSO TO SECTION 147 SINCE THERE WAS MERE LY CHANGE OF OPINION WHICH IS NOT PERMISSIBLE FOR REOPENING OF A SSESSMENT AFTER COMPLETION OF FOUR YEARS FROM THE END OF RELEVANT A SSESSMENT YEAR I.E. 31 ST MARCH 2005 WHEN THE ORIGINAL ASSESSMENT WAS FRAM ED U/S 143(3). FROM THE ORDER OF CIT(A) WE FOUND THAT ASS ESSING OFFICER -: 31: - 31 HAS CLEARLY MENTIONED THE REASONS FOR REOPENING THE ASSESSMENT WHEREIN IT WAS OBSERVED THAT THERE WAS FAILURE ON T HE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR ITS ASSESSMENT. AS THE ASSESSEE HAD NOT FURNISHED THE C OMPLETION CERTIFICATE OF THE PROJECT WHICH WAS A CONDITION P RECEDENT FOR ALLOWABILITY OF DEDUCTION U/S 80IB THE ASSESSING O FFICER WAS HELD TO BE JUSTIFIED IN REOPENING THE ASSESSMENT FOR WITHDR AWAL OF DEDUCTION CLAIMED AND ALLOWED U/S 80IB(10) OF THE INCOME-TAX ACT 1961 EVEN AFTER COMPLETION OF FOUR YEARS. THERE IS NO DISPUTE TO THE WELL SETTLED LEGAL PROPOSITION THAT DEDUCTION CLAIMED IN THE RET URN U/S 80IB WITH RESPECT TO PARTIAL COMPLETION OF PROJECT IS REQUIRE D TO BE ALLOWED IF ALL THE CONDITIONS ARE SATISFIED WHICH INTER ALIA ME NTIONS THAT THE ASSESSEE WILL COMPLETE THE PROJECT WITHIN A PERIOD OF FOUR YEARS. IN THE INSTANT CASE THE ASSESSEES CLAIM OF DEDUCTION U/S 80IB(10) WAS ALLOWED WHILE FRAMING ASSESSMENT U/S 143(3). ASSESS EE WAS REQUIRED TO COMPLETE THE PROJECT ON 31 ST MARCH 2008 AND FURNISH THE COMPLETION CERTIFICATE BEFORE DEPARTMENTAL AUTHORIT IES. HOWEVER NO SUCH COMPLETION CERTIFICATE WAS FILED. THERE IS A C LEAR FINDING IN THE ORDER OF BOTH THE LOWER AUTHORITIES THAT TILL DATE NO COMPLETION CERTIFICATE WAS FURNISHED BY THE ASSESSEE. IT IS AL SO NOT THE CASE OF -: 32: - 32 THE ASSESSEE THAT HE HAS PROCURED AND FURNISHED THE COMPLETION CERTIFICATE. THE ONLY PLEA OF THE ASSESSEE WAS THAT HE HAS APPLIED FOR THE COMPLETION CERTIFICATE BUT THE SAME WAS NOT IS SUED BY THE COMPETENT AUTHORITIES. WHEN THE COMPLETION CERTIFIC ATE ITSELF HAS NOT BEEN FURNISHED THEN DEDUCTION CLAIMED AND ALLOWED U/S 80IB IS LIABLE TO BE WITHDRAWN NOTWITHSTANDING THE MODE OF ASSESSMENT FRAMED WHILE ALLOWING THE DEDUCTION U/S 80IB(10) W HETHER U/S 143(1) OR 143(3). AS PER C.B.D.T. INSTRUCTIONS ASS ESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S 80IB ON THE BASIS OF PROGRESS O F THE PROJECT AND WITHOUT WAITING FOR ITS COMPLETION AND ASSESSING OF FICER IS ALSO REQUIRED TO CONSIDER ASSESSEES CLAIM WHILE FRAMING ASSESSMENT U/S 143(3)/143(1). IF THE ASSESSING OFFICER FINDS THAT ALL THE CONDITIONS OF SECTION 80IB HAS BEEN COMPLIED WITH EXCEPT THE COMP LETION CERTIFICATE WHICH CAN BE FURNISHED ONLY AFTER COMP LETION OF PROJECT WITHIN STIPULATED PERIOD THE ASSESSING OFFICER IS REQUIRED TO ALLOW THE PROPORTIONATE CLAIM ATTRIBUTABLE TO THE COMPLET ION OF PROJECT BY THE END OF RELEVANT FINANCIAL YEAR. IF SUBSEQUENTLY THE ASSESSING OFFICER FINDS THAT AFTER COMPLETION OF STATUTORY PE RIOD THE ASSESSEE HAS FAILED TO FURNISH THE COMPLETION CERTIFICATE T HE DEDUCTION SO ALLOWED KNOWINGLY IS LIABLE TO BE WITHDRAWN. ACCORD INGLY WE DO NOT -: 33: - 33 FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR UPHOL DING THE REOPENING OF ASSESSMENT FOR THE PURPOSE OF WITHDRAWAL OF DEDU CTION CLAIMED AND ALLOWED U/S 80IB(10). 21. ON MERIT OF ADDITION WE FOUND THAT THE I.T.A.T. INDORE BENCH HAS TAKEN A CONSISTENT VIEW THAT FURNISHING O F COMPLETION CERTIFICATE IS MANDATORY W.E.F. ASSESSMENT YEAR 200 5-06 WHICH IS MANDATE OF AMENDMENT BROUGHT IN BY THE FINANCE ACT NO.2 OF 2004 W.E.F. 1.4.2005. IN VIEW OF THE CONSISTENT VIEW TAK EN BY THE I.T.A.T. INDORE BENCH NO COMPLETION CERTIFICATE IS REQUIRED UP TILL ASSESSMENT YEAR 2004-05 HOWEVER CONSIDERING THE AMENDMENT AS PROSPECTIVE VIEW HAS BEEN TAKEN THAT FROM ASSESSMENT YEAR 2005- 06 THE COMPLETION CERTIFICATE IS A CONDITION PRECEDENT FOR ALLOWABILITY OF CLAIM OF DEDUCTION U/S 80IB. RESPECTFULLY FOLLOWING THE SAME WE DO NOT FIND ANY INFIRMITY IN THE ORDERS OF LOWER AUTHO RITIES FOR WITHDRAWAL OF CLAIM OF DEDUCTION ALLOWED U/S 80IB(1 0)WHILE FRAMING ASSESSMENT U/S 143(3) DUE TO NON-FURNISHING OF COM PLETION CERTIFICATE AFTER COMPLETION OF STIPULATED PERIOD OF FOUR YEARS WHICH EXPIRED ON 31.03.2008. 22. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DISMIS SED. -: 34: - 34 THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 8 TH OCTOBER 2013. SD/- SD/- (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 8 TH OCTOBER 2013. CPU* 304.7.10