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TMI Blog2014 (10) TMI 489X X X X Extracts X X X X X X X X Extracts X X X X ..... ect is 1488 sq.ft thus violating the conditions of 801B(10) of the IT Act 1961. 2.The Ld CIT(A) has erred in allowing deduction u/s 80IB(10) of Rs. 96,72,540/- without appreciating the fact that the area of the commercial units occupied in respect of "Veena Sarang" Project is 4637 sq.ft out of a total area of the project 8040 sq. metres. Thus violating the conditions of 80IB(10) of the IT Act 1961. 3.The Ld. CIT(A) has erred in holding that the deduction u/s 80IB(10) as applicable prior to 1st April 2005 is available to the assessee in respect of profits on shops constructed and sold in its "housing projects." 4.The order of the CIT(A) may be vacated and that of the Assessing Officer be restored. 5.The applicant craves leave to add, alter, amend, and modify any of the above grounds of appeal." 3. The brief facts of the case are that the assessee firm is engaged in the business as builders and developers. For the relevant Assessment Year (AY), the assessee in its return of income declared the total income of Rs. 38,190/- (Rupees Thirty Eight Thousand One Hundred Ninety only) after claiming deduction u/s. 80IB(10) in respect of housing projects "Veena Sur" and "Veena Sarang" amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee's claim of deduction u/s.80IB(10) for the project Veena Sur and Veena Sarang on the ground that the both the projects contained an element of commercial unit violating the conditions of 80IB(10). The assessee preferred an appeal against the above order. The Hon'ble CIT(Appeals) gave proportionate allowance and the Hon'ble ITAT gave a decision completely in favour of the assessee. 11. For the relevant assessment year, the Hon'ble Mumbai High Court has given a decision in favour of the assessee against which the department is in appeal before the Hon'ble Supreme Court. 12. The view of the totality of the facts and circumstances involved in the instant case, the issue of claim of deduction u/s.80IB(10) is under litigation and subjudiced owing to the fact that the identical issue is pending with the Hon'ble Supreme Court. 13. After considering the issue of claim of deduction u/s.80IB(10), the decision of which is pending, deserves to be negated and accordingly, the claim of deduction u/s 80IB(10) at Rs. 1,15,46,950/- of the assessee cannot be entertained and is hereby rejected. Penalty u/s. 271(1)(c) is here by initiated for furnishing of inaccurate particulars in the return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on pending on the date of initiation of search shall abate. Thus, the plain reading of this proviso makes it abundantly clear that only the assessment or reassessment pending on the date of search will abate. (ii) The CBDT has issued a circular No.7 of 2003 dt.05.09.2003 explaining provision of Finance Act and para no.65.5 of this Circular clarifies that the appeal, revision or rectification proceedings pending on the date of initiation of search shall not abate. Thus, in view of this circular also, the pending appeal proceedings as on the date of the search will not abate. (iii) The Hon'ble Allahabad High Court in the case of CIT(central), Kanpur vs. Smt. Shaila Agarwal (2011) 16 Taxmann.com 232 (All.)has also considered the provisions of section 153A and not the pending appeal against the assessment or reassessment which has been completed. It has also been held that regular assessment proceedings which have become final will not also abate. (iv) Hon'ble judicial ITAT in the case of Guru Prerna Enterprices vs. ACIT(2011) 57 DTR 465 (Mum) (Trib) as also considered the similar issue and held that only the assessment pending before the A.O. for completion shall abate and u/s.153A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the Revenue by the earlier decision of the Hon'ble High Court in the case of "CIT v/s Brahma Associates" and accordingly the appeal of the Revenue was dismissed. After going through the said orders, we felt that this case was of gross misuse of powers by the lower authorities. Accordingly it was directed that the AO should personally appear and explain the position. The matter was posted for 4.6.2014. However, on 4.6. 2014, the concerned AO did not appear, hence the following order was passed: "Date: 04.06.14 On the last date of hearing i.e. 02.06.14, the ld. A.R. brought to the knowledge of the bench that the issue in dispute relating to the allowability of deduction under section 80IB(10) of the Income Tax Act had already been decided by the Tribunal and thereafter upheld by the Hon'ble Jurisdictional Bombay High Court in assessee's own case for the very same assessment year in favour of the assessee. The Assessing Officer in complete disregard and disobedience to the orders of the Tribunal as well as of the Hon'ble High Court again confirmed the disallowance while framing assessment under section 153A of the Act without any incriminating material being found during th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r filing the second round of appeal in the same case ignoring and in complete disregard and disobedience to the orders of the Tribunal as well as of the Hon'ble High Court vide which the issue in dispute has already been settled. The Hon'ble Bombay High Court in a very recent case "CIT vs. Sairang Developers and Promoters Pvt. Ltd." in ITA No.2603 of 2011 decided on 28.04.14 has strongly discouraged the attitude of the authorities in filing the appeals without application of mind resulting in the pendency of the frivolous appeals before the Hon'ble High Court. The Hon'ble High Court has strongly disapproved the irresponsible attitude of the officers in not applying their mind while approving for the filing of the appeals, which benefits no one and rather defeats larger public interest. The Hon'ble High Court taking strong note of such an act has imposed cost of Rs. 50,000/- upon the Revenue. In another case "CIT vs. M/s. Kishan Ratilal Choksey Share & Securities Pvt. Ltd." in ITA No.1001 of 2011 decided on 17th April, 2014 the Hon'ble High Court strongly discouraged the attitude of the Revenue for filing appeals on the issues which have already been settled and decided in the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that there was no intention to disrespect or disobey the orders of higher judicial authorities and further that the additions/approval for filing the appeal were made on the basis of suggestions, directions and recommendations of other concerned officials for the purpose of protecting the interest of the Revenue and to maintain the consistency in the stand of the Revenue and keep the issue alive. In view of the submissions made by the above named officials, we feel that it will not be proper to proceed further against them as it was not only their decision, but it was the overall opinion of the team of officials to act in the above stated manner and also in view of their submission that there was no intention to disobey and disrespect the orders of their higher judicial authorities. http 7. However we deem it necessary to point out here that once an issue is adjudicated and settled by the higher judicial authority, it is not open to the lower income tax authorities to reopen, make assessment or reassessment on the basis of same facts and circumstances and in the absence any incriminating or new material, information or evidence or of a contrary decision of superior judicia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eopening. If the AO comes into the knowledge of any new material from which he has reason to believe that certain income of the assessee has escaped assessment, he can reopen the assessment." 8. In the facts of the present case, if such an act of making additions u/s 153A on the alleged ground of maintaining consistency in the stand of the Revenue and for keeping the issue alive, is allowed or not condemned, it may lead continuous harassment of assessee and never ending litigation on the same issue, such as, if the said additions are deleted by the higher judicial authorities even up to the level of Apex Court, the AO still would reopen the assessment and make additions on the same issue and on the basis of same facts u/s 147 of the Act. If the further appeals also meet the same fate of setting aside of such additions, then the ld. Commissioner would step into to make the same additions on the same issue again, by way of invoking the provisions of section 263 of the Act and so on. In such circumstances, there will not be any end to litigation on the same issue in the case and also to the harassment, loss and agony of the assessee. No doubt, under the Income Tax Act, vast powers h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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