2022 (4) TMI 745 - HC - Income Tax

Dis-allowance u/s.80IB(10) - assessee had failed to file his return of income within the stipulated time under Section-139(1) and the project namely The Venus Parkland Project was not completed within the period of 05 years from the end of the year in which the approval was granted by the local authority u/s 80IB(10) - HELD THAT - The ratio in the case of Saket Corporation 2015 (6) TMI 460 - GUJARAT HIGH COURT appears to be that in a case where the assessee completes the construction of its entire housing project and thereafter applied for the BU Permission within the prescribed time-limit, then irrespective of the fact whether such BU permission has been granted or not before the prescribed date, the assessee would be entitled to deduct under Section-80IB(10) As regards the delay in filing the returns under Section- 139 of the Act is concerned, the finding recorded by the tribunal as above is that in view of the provisions of Section-92E, the assessee was required to get the transfer pricing report in the Form 3CEB. In such circumstances, the assessee had the benefit of the extended period of the due date for filing of the return. Thus, in our opinion, no error not to speak of any error of law could be said to have been committed by the tribunal in affirming the order passed by the CIT(A) and thereby dismissing the appeal filed by the revenue.

Summary

Issues:
1. Disallowance under Section-80IB(10) of the Income Tax Act, 1961 for a housing project completion.
2. Eligibility for deduction under Section-80IB(10) based on the timely filing of the return of income.

Analysis:
1. The appellant, the revenue, challenged the order of the Income Tax Appellate Tribunal regarding the disallowance under Section-80IB(10) of the Act for a housing project. The appellant argued that the project was not completed before the deadline, and certain conditions were not met. The Assessing Officer disallowed the deduction due to late filing of the return and incomplete project. However, the CIT(A) allowed the deduction relying on a High Court decision. The Tribunal upheld the CIT(A)'s decision, emphasizing that the project was substantially completed before the deadline, even if some permissions were pending. The High Court noted previous judgments supporting completion based on substantial progress and dismissed the appeal.

2. The second issue involved the eligibility for deduction under Section-80IB(10) based on the timely filing of the return of income. The Tribunal found that due to an international transaction, the assessee needed a transfer pricing report, extending the return filing deadline. The High Court agreed with the Tribunal's reasoning, stating that the assessee had the benefit of the extended deadline under Section-92E. Therefore, the Tribunal's decision to dismiss the appeal and uphold the CIT(A)'s order was deemed correct, and the appeal was dismissed.