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TMI Blog2014 (3) TMI 761X X X X Extracts X X X X X X X X Extracts X X X X ..... ve satisfaction is with regard to material particulars - How one gets these material particulars, could be from the documents produced by the assessee and if a doubt or suspicion arises in the mind of the assessing officer he has to make an enquiry and secure material which dispels his doubt or suspicion - The doubt expressed is a genuine one because of two reasons, that is, 'A' type flat is just 3 sq.ft.less than maximum measurement of the apartment and same family members had purchased adjacent apartments. Unless this is factually verified by spot inspection, it remains a doubt - When deductions are allowed under Section 80-1B several checks and balances are indicated - In order to give concession or benefit of deduction, the officer has to take into account whether there is any attempt to evade payment of tax - This is the primary duty of the department - In order to discharge this duty, the subjective satisfaction of the officer is very relevant – thus, the Tribunal was not justified in setting aside the orders of the Commissioner and the Commissioner was justified in initiating proceedings u/s 263 of the Act – Decided in favour of Revenue. - ITA. No. 179 of 2011 - - - D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 80-IB(10) of the Act. So far as the first assessment year, a notice under Section 148 of the Act came to be issued on 11.03.2008, after recording reasons for re-opening the assessment. By letter dated 25.03.2008 the assessee requested to treat the return filed on 31.10.2005 as one filed in response to the notice under Section 148 of the Act. However, on 02.04.2008 assessee filed a return of income for the assessment year 2005-06 along with Audit Reports, Financial Statements and other Report in the required forms. However, so far as income is concerned, there was no change in the income in this revised return. 3. Then coming to the assessment year 2006-07, it was a regular assessment and as on the date of taking up computation of tax for the assessment year 2006-07, assessment for the previous year was not yet over, therefore, the officer opined that both should be taken up and disposed of on the same day. So far as stand of the assessee, for both the assessment years in a land consisting of 1.76 acres, apartments were put up, maximum built up area in respect of the A type flats is 1497 sq. feet which is below 3 feet maximum area of 1500 sq.feet to extend benefit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opined, the information was not sufficient to decide or were not satisfactory to support the claim of deduction under Section 80IB(10) claimed by the assessee. However, surprisingly the assessing officer opining that assessment for both years was getting time barred proceeded to complete the assessment and allowed the deductions claimed by the assessee. This became the subject matter of proceedings on the file of Commissioner of Income Tax who initiated suo motu proceedings under Section 263 of the Act. 7. After issuing show cause notice dated 23.06.2009 and considering the response of the assessee through its representative, Commissioner, after referring to the factual situation with reference to sub-section 10 of Section 80-IB, proceeded to form its opinion at paragraphs 3 and 4 which read as under:- 3. I have carefully considered the submissions of the assessee and perused the records of the case. During the course of assessment proceedings, field enquires were made and it was noticed that in respect of the project 'Marine Plaza' there was some violation made against the approved plan in the construction of the apartment and hence this project was not eligible fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the limited purpose of verification of the deduction claimed under Section 80-IB(10) of the Act. The Assessing Officer was directed to recompute the deduction allowable under Section 80-IB afresh. 9. This order came to be challenged before the Appellate Tribunal by the assessee. The Tribunal, after considering the facts and circumstances in which notice under Section 263 of the Act came to be given, ultimately opined that there was no justification for the Commissioner to invoke its jurisdiction under Section 263 of the Act and proceeded to quash the impugned order dated 27.8.2009 passed under Section 263 of the Act. This is the subject matter in the appeals before us. 10. Learned Standing Counsel for the Department contended that previous assessing officer, i.e. predecessor to the officer who completed the assessment, had noted the defects or doubts so far as the measurement or area of apartment, in the light of factual situation, that is, A type apartment 1497 sq.ft. i.e. just 3sq.ft less than the maximum measurement to go out of benefit of deduction and possibility of removal of common wall between two apartments, making as single unit as the purchase was by same family ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfying or clearing the doubts noted by previous assessing officer as inspecting officers were not able to secure complete picture of the factual situation. Having opined inability of the department to get sufficient material and in the light of the fact that assessee was unable to have key of the apartments that were locked, as much earlier to that date, possession of the buildings were handed over to the respective allottees/purchasers, nothing else was available within the power of the assessee to furnish the material, therefore, there was nothing else assessee could do. Therefore the assessing officer based on the available material, that is, approved plan etc. has proceeded with the assessment. Having proceeded with the assessment, allowing the claim of deductions, it has to be presumed that the material available as on the date of completing the assessment proceedings satisfied the assessing officer that the claim was justified. Hence, initiation of proceedings under Section 263 of the Act by Commissioner of Income Tax, according to learned senior counsel was erroneous. When it was possible for the assessing officer to reject the claim of deduction but on the other hand having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, he proceeded to pass the orders on the available material. 15. The subjective satisfaction of the officer while proceeding with computation of tax payable, it is not successive officer's subjective satisfaction with which we are concerned, we are concerned with both the assessing officers as found in the files. If the assessing officer did not make an attempt to collect material in spite of a note by earlier officer, probably it would have been a different situation altogether. Having opined that there need to be further inspection to ascertain the factual situation in spite of several documents like approved plan, occupancy certificate building tax assessment proceedings in the file, proceeded ahead with collection of material fact. This would clearly indicate assessing authority who was passing orders factually was not satisfied with the material available therefore attempted to collect material; but failed. 16. Having discussed the entire details with reference to incomplete material, in one sentence he proceeds to pass the orders on the available material. This very available material was incomplete according to him. This is the subjective satisfaction of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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