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TMI Blog2017 (12) TMI 1123X X X X Extracts X X X X X X X X Extracts X X X X ..... ject which is 5940 sq. meter i.e. 1.5 Acres (approximately), date of approval of the project on 29.03.2007 and date of completion of project dated 05.03.2012. The assessee provided the details of built-up area, copy of land purchase agreements, commencement and completion certificate along with copy of plan, return of income for AY 2011-12 and 2012-13 and Auditor’s report. The AO after considering the reply and the documentary evidence furnished by assessee allowed the claim of assessee under section 80IB in the assessment order passed on 30.03.2015. The AO granted the deduction under section 80IB(10). In our view, the AO has made a sufficient enquiry before passing the assessment order. Co-ordinate Bench of Pune Tribunal in Hiraman Nivrutti Bhujbal vs. ITO [2014 (5) TMI 1137 - ITAT PUNE] held that concerned Gram Panchayat is a competent local authority for the purpose of issuing approval and completion certificate for claiming deduction under section 80IB(10) in respect of the profit from sale and eligible flats in the project. In our view, the AO has taken a legally possible view while allowing deduction under section 80IB(10). In our view, the provision of section 263 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... single defect from the details and documents submitted to the satisfaction of the A.O and as per the conditions laid down u/s 80IB(10); ( h) In absence of order being erroneous and also prejudicial to the interest of the revenue, order u/s.143(3) of the Act could not be set-a side on mere suspicion, hypothetical/notional assumptions/presumptions. 3. On the facts and circumstances of the case and in law, the order passed u/s 263 is merely the change of opinion and the assessment order passed by the AO after application of mind is neither erroneous nor prejudicial to the interest of the revenue and accordingly the action of the Pr. CIT in invoking provisions of section 263 of the Act and set- a siding the order be held abinitio and/ or otherwise void and bad-in-law. 4. On the facts and circumstances of the case and in law, the Pr. CIT erred in not passing a speaking order against the submissions of your appellant and raised a new ground which was not mentioned in the show cause notice for initiating action u/s. 263 of the Income Tax, 1961. As such the order passed u/s. 263 is void ab initio. The action of Pr. CIT was wholly unreasonable, uncalled for and bad in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er after conducting detailed queries regarding the eligibility of claim of deduction under section 80IB. 4. We have heard the ld. Authorized Representative (AR) of the assessee and ld. Departmental Representative (DR) for the Revenue and perused the material available on record. The ld. AR of the assessee argued that order passed by AO is neither erroneous nor prejudicial to the interest of Revenue. During the assessment proceeding, the AO examined the issue by making thorough enquiry and taken a correct view that Gram Panchyat, Aadai is a local authority so far as assessee s housing project is concerned. The assessee obtained necessary permission from Gram Panchyat. The project undertaken by assessee fulfilled all condition and criteria prescribed under section 80IB. The order passed by ld. PCIT is merely change of opinion. The AO passed the order after due application of mind and accepted the claim regarding the eligibility under section 80IB of the Act. The order passed by ld. PCIT is bad-in-law. The ld. AR of the assessee further argued that during the assessment proceeding, the AO vide notice dated 27.11.2014 required detailed of the projects. The copy of notice under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with regard to area of project, date of approval of project from local authority, date of commencement, date of completion of the project and if the project is covered under section 80IB(10). The AO also made the enquiry related to size of residential unit, commercial area in project, nature of land holding, commencement certificate from appropriate authority under whose jurisdiction work was carried out along with copy of plan and revised plan, proof of land holding and total proposed construction along with return of income filed for AY 2011-12 and 2013-14 with balance-sheet, computation of income and Auditor s report. The assessee furnished its reply vide reply dated 02.12.2014. The assessee in its reply furnished the information related with total area of the project which is 5940 sq. meter i.e. 1.5 Acres (approximately), date of approval of the project on 29.03.2007 and date of completion of project dated 05.03.2012. The assessee provided the details of built-up area, copy of land purchase agreements, commencement and completion certificate along with copy of plan, return of income for AY 2011-12 and 2012-13 and Auditor s report. The AO after considering the reply and the docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was found that the sanction of the construction of a building being situated within the limits of village, the approval has to be granted by the Panchayat. Because of that reason, it was held that the Village Panchayat is a local authority. Relevant portion of the said order is reproduced below:- 6. As far as the issue whether the Gramp Panchayat is 'local authority' or not, the decision of ITAT, Pune Bench has been cited before us bearing No. 667 /PN/20 13 assessment year 2009-10 in the case of Hiraman Nivrutti Bhujal, order dated 27-05-2014 wherein other decisions were discussed and finally came to the conclusion that the concerned Gram Panchayat was a competent local authority for the purpose of issuing approval and completion certificate for claiming deduction u/s 801B (10) of I. T. Act. Moreover, the respondent-assessee has also placed reliance on a decision of CIT vs. Gwalior Rayon Silk Manufacturing Co. Ltd. 196 ITR 149 (SC) for legal proposition that the provisions for deductions and exemptions should be construed reasonably and in favour of the assessee. In our considered opinion since all the issues in hand have been covered either by the orders of the T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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