2022 (1) TMI 34 - AT - Income Tax

Disallowance made u/s 80IB - Claim of the assessee was rejected by the A.O. on two reasons as return filled beyond due date of filing of return of income and assessee failed to submit the completion certificate - HELD THAT - Although there was delay of 27 days on the part of assessee for filing the return of income but audit report was filed by the assessee in time and this fact has not been disputed by the ld. DR. We have further noticed that delayed filing of return of income was within the time limit prescribed u/s 139(4) of the Act which according to us is a sufficient compliance for the purpose of Section 80AC of the Act - See case of Trustee of Tulsidas Gopalji Charitable and Chaleshwar Temple Trust 1993 (9) TMI 75 - BOMBAY HIGH COURT . The submission of return within time as specified under sub-section (4) of Section 139 has to be taken as sufficient compliance in the provisions of the Act as it was expounded that sub-section (1) and sub-section (4) of Section 139 have to be read together. Thus, keeping in view the above settled provisions of law, we reach to an inevitable conclusion that the return of income so filed by the assessee in the present case within the time specified in sub-section (4) of Section 139 of the Act has to be considered as filed within the time prescribed in sub-section (1) of Section 139 of the Act. Thus, on this ground, no disallowance U/s 80IB of the Act was warranted. Thus, the assessee succeeds on this account. Non-submissions of completion certificate - We found from the record that the approval of the construction of the said project was granted in favour of the assessee on 31/01/2006 i.e. in A.Y. 2006-07 and thus, in this way, the construction ought to have been completed till A.Y. 2011-12. Since the assessee could not place on record the completion certificate, therefore, in absence of the said completion certificate, the claim of the assessee was denied u/s 80IB We found that the ld. CIT(A) under the identical facts and circumstances on the basis of completion certificate of the architect and other circumstantial evidences, allowed the appeal of the assessee by relying upon the decision of case of New High Rise Construction 2017 (3) TMI 1329 - ITAT NAGPUR . Thus, in our view, as far as the completion of projection is concerned, the issue is no more resintgra as the Revenue in the subsequent assessment year have thus admitted that the project of the assessee in question was completed in 2011 and the assessee had complied with all the conditions of Section 80IB. Thus, considering the totality of facts and circumstances of the case, we restore this issue back to the file of the A.O. with direction to consider architect s certificate and other circumstantial and indirect evidences put forth by the assessee and in case, the assessee fulfills the conditions as laid down by the Coordinate Bench of the Tribunal in the case of New High Rise Construction Vs. ITO (supra) then the A.O. is directed to allow deduction U/s 80IB(10) of the Act. We direct accordingly.

Summary

Issues Involved:
1. Delay in filing the appeal.
2. Disallowance of deduction under Section 80IB due to late filing of return.
3. Disallowance of deduction under Section 80IB due to non-submission of completion certificate.

Issue-wise Detailed Analysis:

1. Delay in Filing the Appeal:
The appeal was delayed by 363 days. The assessee attributed the delay to the sudden demise of his counsel and his own accident, which resulted in a fractured leg. The Tribunal acknowledged these reasons and cited the Supreme Court's ruling in *Collector, Land Acquisition, Anantnag & Anr. Vs Mst. Katiji and others (1987) 2 SCC 107*, which emphasized that 'sufficient cause' should be interpreted liberally to serve the ends of justice. The Tribunal found no culpable negligence or malafide on the part of the assessee and concluded that there was sufficient cause for the delay. Consequently, the delay was condoned under Section 253(5) of the Income Tax Act, 1961, and the appeal was admitted for adjudication on merits.

2. Disallowance of Deduction Under Section 80IB Due to Late Filing of Return:
The assessee filed the return of income on 27/10/2009, beyond the due date of 30/09/2009, but within the extended period under Section 139(4). The Tribunal considered the audit report, which was filed on time, and noted that the delay was due to the ill health of the assessee's advocate. The Tribunal relied on several judicial precedents, including *Trustee of Tulsidas Gopalji Charitable and Chaleshwar Temple Trust Vs CIT (207 ITR 368) (Bom)(HC)* and *Sukhkarta Developers and Builders Vs PCIT (Nagpur) (Trib) 596 & 597/Nag/2016*, which held that returns filed within the time specified under Section 139(4) should be treated as sufficient compliance for the purpose of Section 80AC. The Tribunal concluded that the return filed within the time limit prescribed under Section 139(4) is sufficient compliance, and thus, no disallowance under Section 80IB was warranted on this ground.

3. Disallowance of Deduction Under Section 80IB Due to Non-Submission of Completion Certificate:
The assessee's housing project was approved on 31/01/2006, and the construction was to be completed by 31/03/2011. For the assessment year 2009-10, the project was not completed, and no completion certificate was obtained. The Tribunal noted that in the subsequent assessment year 2010-11, the CIT(A) allowed the deduction based on the architect's completion certificate and other circumstantial evidence, relying on the Nagpur Tribunal's decision in *New High Rise Construction Vs. ITO ITA No. 285/Nag/2015*. The Tribunal found that the issue of project completion was no longer res integra, as the revenue had accepted the project's completion in the subsequent year. To maintain consistency, the Tribunal restored the issue to the file of the A.O. with directions to consider the architect's certificate and other evidences. If the conditions laid down by the Tribunal in *New High Rise Construction* were met, the A.O. was directed to allow the deduction under Section 80IB(10).

Conclusion:
The appeal was partly allowed. The delay in filing the appeal was condoned, and the disallowance of deduction under Section 80IB due to late filing of return was overturned. The issue of non-submission of the completion certificate was remanded to the A.O. for reconsideration based on the architect's certificate and other circumstantial evidence.