2016 (11) TMI 1306 - AT - Income Tax

Deduction u/s. 80IB(10) - Held that - In the present case the project has been approved by the local authority before 01.04.2005 within the meaning of clause (a) of section 80-IB(10) of the Act and therefore the ratio of the judgement of the Hon ble High Court in the case of CIT vs. CHD Developers Ltd. (2014 (1) TMI 1542 - DELHI HIGH COURT ) squarely applies. However it would be required to establish by the assessee that the construction of the project as sanctioned was completed before the stipulated date. On this aspect assessee has been consistently pointing out before the Assessing Officer CIT(A) as well as before the Tribunal that the construction was completed before the stipulated date. The flats have been sold and are occupied by the respective customers. It has also been pointed out that in some of the cases the local authority has issued individual completion certificates to the respective flat owners. Other document viz. property tax assessment of some individual flat owners electricity bills showing occupation of the flats etc. have been referred to in the course of hearing. We find that the said material was placed before the lower authorities and the same has not been repudiated at all. The denial of deduction has been solely on non-obtaining of completion certificate which in the present case is not a requirement to be insisted upon in view of the judgement of the Hon ble Delhi High Court in the case of CIT vs. CHD Developers Ltd. - Decided in favour of assessee

Summary

Issues Involved:
1. Condonation of delay in filing appeals.
2. Dismissal of appeals for non-prosecution by the Commissioner of Income Tax (Appeals).
3. Entitlement to claim relief under section 80IB(10) of the Income Tax Act.

Detailed Analysis:

1. Condonation of Delay in Filing Appeals:
The appeals were filed with a delay of 1224 days. The assessee's representative submitted an application for condonation of delay supported by an affidavit. The delay was attributed to the negligence of the office peon who received the ex-parte orders from the Commissioner of Income Tax (Appeals) but failed to inform the partners or office staff. The assessee was under the impression that the appeals for the years 2005-06 and 2007-08 were still pending, awaiting the Tribunal's decision for the year 2006-07. Upon realizing the orders were dismissed for non-prosecution, the assessee took time to locate the orders due to the peon's departure from the job. The Tribunal accepted the reasons for the delay, citing the Supreme Court's principles that "sufficient cause" should be liberally construed to advance substantial justice, and condoned the delay.

2. Dismissal of Appeals for Non-Prosecution by the Commissioner of Income Tax (Appeals):
The Tribunal noted that the Commissioner of Income Tax (Appeals) dismissed the appeals for non-prosecution in ex-parte orders. It was highlighted that Section 250(6) of the Income Tax Act mandates that the Commissioner must dispose of appeals by stating points for determination, decisions, and reasons. The Tribunal emphasized that the Commissioner, being a quasi-judicial authority, is duty-bound to decide appeals on merits rather than dismissing them for non-prosecution. This view was supported by precedents from the Mumbai and Chennai Benches of the Tribunal, which held that the Commissioner has no power to dismiss appeals for non-prosecution and must examine each ground on merits.

3. Entitlement to Claim Relief under Section 80IB(10) of the Income Tax Act:
The Tribunal addressed the merits of the assessee's claim for deduction under section 80IB(10) for assessment years 2005-06 and 2007-08. The assessee had undertaken a construction project and claimed deductions for the first time in the assessment year 2004-05. The Assessing Officer denied the deduction for the year 2006-07 due to the absence of a completion certificate from the Pune Municipal Corporation, despite the project being completed and occupied. The Tribunal referred to the Delhi High Court's ruling in CIT vs. CHD Developers Ltd., which held that the requirement for a completion certificate was not applicable to projects approved before 01.04.2005. The Tribunal found that the assessee had completed the project within the stipulated time and provided sufficient evidence of occupancy and ancillary certificates. Consequently, the Tribunal directed the Assessing Officer to allow the deduction under section 80IB(10), following the precedent set in the assessee's appeal for the year 2006-07.

In conclusion, the Tribunal condoned the delay in filing the appeals, set aside the ex-parte dismissal orders of the Commissioner of Income Tax (Appeals), and allowed the assessee's claim for deduction under section 80IB(10) for the assessment years 2005-06 and 2007-08. The appeals were admitted and disposed of on merits, with the Tribunal emphasizing the need for substantial justice over technicalities.