2014 (8) TMI 393 - HC - Income Tax

Deduction u/s 80IB(10) Project not completed within stipulated time - Held that - Assessee have not completed the project within stipulated time i.e. on or before 31 March 2010 and therefore, they are unable to qualify for deduction u/s 80IB (10) of the Act - the issue of certificate is of the local authority and conclusion is a matter of interpretation of Section 80IB of the Act - Section 80IB (10) of the Act does not state that the Certificate of the Gram Vikas Adhikari i.e. local authority is conclusive in nature Decided against Assessee.

Summary

Issues:
Challenging notices issued under Section 148 of the Income Tax Act 1961 for reopening assessments for A.Y. 2006-07, 2007-08, 2008-09, and 2009-10 based on incomplete housing project completion.

Analysis:
The judgment deals with challenges against notices seeking to reopen assessments for multiple assessment years due to incomplete housing project completion. The notices were issued under Section 148 of the Income Tax Act 1961. The grounds for reopening assessments for all four years were identical, focusing on the non-completion of a housing project within the stipulated time for claiming deductions under Section 80IB(10) of the Act. The Assessing Officer found discrepancies during scrutiny assessment proceedings for A.Y. 2010-11, leading to the belief that income had escaped assessment for A.Y. 2006-07. The petitioner's objections were disposed of similarly for all notices, emphasizing the non-completion of the project within the prescribed timeline.

The petitioner contended that the completion certificate provided by the Sarpanch of the Gram Panchayat should be considered valid, contrary to the Assessing Officer's interpretation. It was argued that the certificate issued by the Gram Vikas Adhikari should prevail and entitle the petitioner to the deduction under Section 80IB(10) of the Act. However, the court noted that the factual determination of project completion and the interpretation of the local authority's certificate fell within the purview of the assessing authorities. The court highlighted that Section 80IB(10) does not explicitly state the conclusive nature of the Gram Vikas Adhikari's certificate, leaving room for assessment proceedings to clarify these issues.

Ultimately, the court dismissed the petitions, stating that the issues raised could be addressed during reassessment proceedings before the assessing authority. The judgment clarified that their observations were limited to the decision on entertaining the petitions under Article 226 of the Constitution of India and would not influence the application of law by the Assessing Officer. All contentions were left open, and the petitions were dismissed without any costs awarded.