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TMI Blog2008 (2) TMI 458X X X X Extracts X X X X X X X X Extracts X X X X ..... basis by the Assessing Officer which is a subject-matter of appeal can be sustained on the basis of other provisions not invoked by him, the Tribunal can invoke the said provisions to sustain the said disallowance. It is no doubt true that the Tribunal's jurisdiction in an appeal before it is restricted only to passing orders on the subject-matter of the appeal. However, the words 'as it thinks fit' in section 254(1) even then will have to observe the prohibitions of the Income-tax Act and do not mean that the Tribunal can think 'fit' to disregard the clear mandates of the Statute. We, therefore, overrule the objection raised by the ld. Counsel for the assessee for entertaining the new plea sought to be raised by the ld. DR and proceed to consider and decide the same on merits now. Entitlement for the benefit of section 80-IB(10) - It is pertinent to note here that the period of commencement of the said projects in order to become eligible for benefits of section 80-IB(10) was also simultaneously specified as up to 31-3-2001 as against the period earlier prescribed as on or after 1-10-1998 which clearly means that the intention of the Legislature was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s preferred by the Revenue against the order of the learned Commissioner of Income-tax (Appeals)-I, New Delhi, dated September 15, 2003, and its grievance is projected in the following grounds raised therein : (a) On the facts and circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in deleting addition of Rs. 3,89,47,635 made on account of additional notional letting value of flats. (b) On the facts and circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in allowing relief of Rs. 12,35,19,715 on account of the provision of expenses for completion of project. (c) On the facts and circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in deleting disallowance of Rs. 1,81,37,291 on account of expenses on completed project. (d) On the facts and circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in granting relief of Rs. 1,64,38,558 on account of deduction under section 80-IB(10) of the Income-tax Act, 1961. 1* * * * 2. As regards ground No. 4 relating to the assessee' s claim for deduction under section 80-IB(10), the facts releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rove that the concerned housing project had been completed prior to March 31, 2003. When the remand report received by the Assessing Officer was confronted by the learned Commissioner of Income-tax (Appeals) to the assessee, it was submitted on its behalf that the application for occupation certificate was submitted to the Director, Town and Country Planning, Haryana on February 25, 2003 itself and the said authority having issued the occupation certificate with reference to the said application, the claim of the assessee for having completed the said project as claimed in the application was accepted. The learned Commissioner of Income-tax (Appeals) found the stand of the assessee to be acceptable and after admitting the fresh evidence filed by the assessee as well as relying thereon, he held that the requisite condition for grant of deduction under section 80-IB(10) was duly satisfied by the assessee-company. Accordingly, he deleted the disallowance made by the Assessing Officer on account of the assessee' s claim for deduction under section 80-IB(10). 3. At the time of hearing before us, the learned Departmental representative has not made any submissions to challenge the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by Finance Act, 2000 in the provisions of section 80-IB(10), the date of completion of project was extended up to March 31, 2003, and this new date was substituted in the statute with effect from April 1, 2001, just because the period available for completion of project prior to that was up to March 31, 2001. He contended that it cannot be concluded on the basis of the said date that the benefit of extended date was available to the assessee only for and from the assessment year 2001-02 as sought to be contended by the learned Departmental representative especially when the legislative intention was to extend the benefits available under the provisions of section 80-IB(10) even to the projects completed within the extended period. He also contended that the interpretation sought to be given by the learned Departmental representative to the amendment made by the Finance Act, 2000 thus is not logical and the same is likely to result in absurdity. 5. We have considered the rival submissions and also perused the relevant material on record. In so far as the new plea sought to be raised by the learned Departmental representative for the first time before us, it is observed that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducts Ltd. [1994] 208 ITR 740 cited by learned counsel for the assessee thus cannot be of any help to the assessee' s case. On the other hand, the same supports the Revenue' s case. The decision of the hon' ble Madras High Court in the case of CIT v. Indian Auto Stores [1981] 129 ITR 554 also further supports this stand wherein it was held that the Tribunal can uphold the order of the first appellate authority on ground not raised or argued before it if the said ground involves a pure question of law. 6. It is no doubt true that the Tribunal' s jurisdiction in an appeal before it is restricted only to passing orders on the subject-matter of the appeal. However, the words as it thinks fit in section 254(1) even then will have to observe the prohibitions of the Income-tax Act and do not mean that the Tribunal can think fit to disregard the clear mandates of the statute. The Tribunal as such as any other authority has to carry out the dictates of the statute. As clarified and explained by the hon' ble Supreme Court in the case of Hukumchand Mills Ltd. v. CIT [1967] 63 ITR 232, the rule is that the subject-matter of the appeal must be ascertained and a clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endment in the provisions of section 80-IB(10) extending the period for completion of eligible projects was made with effect from April 1, 2001, apparently because as per the pre-amended provisions, such period was prescribed up to March 31, 2001. According to him, the date of April 1, 2001, given as an effective date for the said amendment therefore cannot be read in a manner to say that the same was applicable only for the assessment year 2001-02 and the subsequent years. The learned Departmental representative however has contended that the said amendment was specifically made applicable only to the assessment year 2001-02 and subsequent years. In support of this contention, he has relied on the Explanatory Note reported in [2000] 242 ITR (St.) 100-101 explaining the legislative intention behind the aforesaid amendments made in section 80-IB(10) which reads as under : Clause 36 seeks to amend section 80-IB of the Income-tax Act relating to deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development under takings. Under the existing provisions, . . . . . . Under the existing provisions contained in sub-section (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll projects which had already commenced on or after October 1, 1998. In this backdrop, if the interpretation to the said amendments as sought to be given by the learned Departmental representative is accepted, the housing project commenced on or after October 1, 1998, but before March 31, 2001 and completed after March 31, 2001, would not be eligible for the benefits of section 80-IB especially in respect of profits derived from the said projects during the previous year relevant to the assessment years 1999-2000 and 2000-01 which is not certainly in consonance with the legislative intention. Moreover, the profits derived from the same project for the assessment year 2001-02 and subsequent years would be eligible for the said benefits which cannot be accepted as logical interpretation going by the common sense. It may also lead to absurd results even in the cases of the assessee' s following two different methods of accounting to recognize the income derived from the projects eligible for benefits under section 80-IB. In a case where the assessee follows a project completion method, he will be able to avail the benefit of section 80-IB in respect of entire profits of the projec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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