2020 (3) TMI 506 - HC - Income Tax

Deduction u/s 80IB(10) - Whether building was completed within the stipulated time? - HELD THAT - Tribunal noted that respondent-assessee had furnished the commencement certificate issued by the Bombay Municipal Corporation dated 10.09.2007 and, occupation certificate issued by the Municipal Corporation of Greater Mumbai dated 26.02.2013, besides other documents which clearly shows that there were approvals which cover full occupation / permission for all the blocks of the building project. In view of the above facts, Tribunal vide the order dated 03.11.2016, accepted the contention of the respondent-assessee that the building was completed on 31.03.2013 and occupation in respect of all the blocks of the project were obtained within the stipulated time limit on 31.03.2013. There being no violation of any of the conditions mentioned in Section 80IB(10)of the Act, the above claim of the respondent-assessee was allowed by the Tribunal. When the completion / occupation certificate was handed over to the respondent-assessee, the same was produced before the Tribunal. We see no harm in the Tribunal taking cognizance of this certificate. In so far reference to Rules 29 and 30 of the Income Tax (Appellate Tribunal) Rules, 1963 is concerned, it is trite that rules and procedures are the handmaid of justice which are required to be applied to advance the cause of justice and not to frustrate the same. Conclusion reached by the Tribunal that the building was completed within the stipulated time on 31.03.2013 is a finding of fact. Revenue has not questioned that this finding is incorrect or has not questioned the veracity of the completion / occupation certificate produced before the Tribunal. If that be so than it is merely an objection on procedure - No substantial question of law.

Summary

Issues:
1. Acceptance of additional evidence by the Tribunal without following procedural rules.
2. Tribunal's decision on the completion date of the building project for deduction under Section 80IB(10) of the Income Tax Act.

Issue 1: Acceptance of additional evidence
The appeal raised concerns regarding the Tribunal's acceptance of additional evidence without adhering to the procedural rules laid down in Rules 29 and 30 of the Income Tax (Appellate Tribunal) Rules, 1963. The standing counsel for the appellant contended that the Tribunal should have directed the respondent to present the additional evidence before the Assessing Officer instead of admitting it directly. The failure to follow this procedure was argued to have led to the two substantial questions of law presented in the appeal.

To address this issue, a detailed examination of the orders passed by the authorities below was conducted. The respondent, a partnership firm engaged in real estate, had claimed deductions under Section 80IB of the Act. During the assessment, the completion certificate for the building project was a point of contention. The Assessing Officer did not allow the deduction, leading to subsequent appeals. The Commissioner of Income Tax (Appeals) and the Tribunal both considered the issue of the completion certificate. The Tribunal, in its order, accepted the additional evidence provided by the respondent, including certificates from municipal authorities, to establish the completion date of the project. The Tribunal's decision to admit this evidence was challenged, citing procedural irregularities.

Issue 2: Tribunal's decision on completion date for deduction
The Tribunal's decision on the completion date of the building project was a crucial aspect of the appeal. The Tribunal, based on the evidence presented, concluded that the project was completed within the stipulated time frame, making the respondent eligible for the deduction under Section 80IB(10) of the Act. The Tribunal considered the commencement and occupation certificates provided by the municipal authorities as sufficient proof of completion within the specified period. The Tribunal's finding was based on factual evidence and not disputed by the revenue.

In response to the standing counsel's objections, the Court emphasized that the completion certificate was issued by a relevant authority, and the respondent promptly presented it before the Tribunal. The Court highlighted that procedural rules should serve the cause of justice and not impede it. The Court concluded that the Tribunal's factual finding on the completion date was valid, and no substantial question of law arose from the order. Therefore, the appeal was dismissed as lacking merit, with no costs awarded.

In summary, the High Court of Bombay upheld the Tribunal's decision regarding the acceptance of additional evidence and the determination of the completion date for the building project, dismissing the appeal raised by the revenue.