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TMI Blog2012 (3) TMI 687X X X X Extracts X X X X X X X X Extracts X X X X ..... itrary and baseless. 4. That ld. CIT s upholdings the ld. Assessing Officer s findings on the basis of impugned photograph of a house forming part of the assessment order are erroneous, materially incorrect, bad on facts, baseless and therefore unsustainable in law. 5. That in the face of prevailing legal standards the ld. Assessing Officer has erred in holding that the assessee has failed in completing the project within the stipulated time period. 3. Rival contentions have been heard and records perused. Facts of the case in the assessment year 2006-07 are that the assessee is a Private Limited Company engaged in the business of building. During the relevant assessment year under consideration, the assessee has undertaken development and building of housing project for which deduction was claimed u/s 80IB(10). The Assessing Officer declined claim of deduction on the plea that the assessee has not obtained completion certificate. He also observed that house no.84 was not complete, therefore, the project as a whole was not completed before the specified date. 4. By the impugned order, the ld. CIT(A) confirmed the disallowance of deduction claimed by observing as under : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall given to the Commissioner all necessary facilities for the inspection of such work. (2) Within seven days after the receipt of the said notice the Commissioner shall depute an officer to commence the inspection of such work. (3) Within seven days from the date of commencement of such inspection the Commissioner shall- (a) give permission for the occupation of the building erected or for the use of the part of the building re-erected; or (b) refuse such permission in case such erection, construction or reconstruction is in contravention of any provision of this Act or any rule or byelaw made there under or any other enactment for the time being in force. (4) No person shall occupy or permit to be occupied any such building or use or permit to be used any part affected by the re-erection of such building - (a) unit the permission referred to in clause (a) of sub-section (3) has been granted in the [manner prescribed by bye laws]; (b) unless the Commissioner has failed for fifteen days after the receipt of notice of completion to intimate his refusal to grant the said permission. The permission certificate PB 112 condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e legal effect of that, as has often been held, is to write those sections into the new Act as if they had been actually written in it with the pen, or printed in it. In view of the provisions of the I.T. Act, 1961 read with section 301 of the M.P. Municipal Corporation Act, 1956, as the certified has not been issued, it has to be deemed that the date of completion is the same as the date claimed by the assessee. 39. The ld. Authorized Representative further argued that explanation (ii) to Section 80 IB(10)(a) reads as under :- (ii) the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority. A statute should be read as a whole to ascertain its true meaning and content. Whenever a statute comes up for consideration, it must be remembered that it is not within human powers to foresee the manifold sets of facts which may arise, and, even if it were, it is not possible to provide for them in terms free from all ambiguity. A judge cannot simply fold his hands and blame the draftsman. He must set to work on the constructive task of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been intended by the legislature, the court may modify the language used by the legislature or even do some violence to it, so as to achieve the obvious intention of the legislature and produce a rational construction. The court may also in such a case read into the statutory provisions a condition which, though not expressed. While the consequences of a suggested construction cannot alter the meaning of a provision, they can be taken into account to help in fixing its meaning. Absurdity has to be avoided in interpretation of a statutory provision. Similarly where the interpretation of a statutory provision. Similarly where the interpretation leads to futility, it cannot be accepted. 40. Emphasizing Rule of reasonable construction, the ld. Authorized Representative contended that A fair and reasonable construction of the language in the statute is a basic principle of interpretation. If a taxpayer cannot be brought under the tax net, revenue has to be reconciled to this position of law. Vikrant Tyres Ltd. v. First ITO (2001) 247 ITR 821 (SC). Where two views are reasonably possible, the one which favour the assessee has to be adopted. Birla Cement Works v. CBOT (2001) 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IB(10) on the remaining houses, which were constructed and duly completed before the statutory period prescribed under the law. 8. On the other hand, the ld. Senior DR relied on the finding recorded by the lower authorities to the effect that housing project was not complete, therefore, Municipal Corporation did not issue the completion certificate, which is a pre-condition for allowing claim of deduction u/s 80IB(10). 9. We have considered the rival submissions and have gone through the orders of the authorities below and found from record that Housing Project in respect of which assessee has claimed deduction was required to be completed by 31st March, 2008, and a certificate for completion of the project was to be issued by the Municipal Corporation in terms of provisions of Explanation (ii) of Section 80IB(10) read with clauses (a)(i) of the Income-tax Act. Undisputedly, the assessee did not get any certificate for completion of the project, which is a pre-condition for claim of deduction u/s 80IB(10). It is also not the case of the assessee that completion certificate was issued subsequently, which did not mention the date of completion. Had it been the case of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) the project is on the size of a plot of land which has a minimum area of one acre and (c) the residential unit has a maximum builtup area of 1000 sq.ft. where such residential unit is situated within the cities of Delhi or Mumbai or within 25 k.m. from the municipal limit of these cities and 1500 sq.ft. at any other place. The following sub-section (10) was substituted for existing sub-section (10) of section 80IB by the Finance (No. 2) Act, 2004 w.e.f. 1.4.2005 :- (10)The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 2007 by a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment year from such housing project if,- (a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998 and completes such construction,- (i) in a case where a housing project has been approved by the local authority before the 1st day of April, 2004, on or before the 31st day of March, 2008; (ii) in a case where a housing project has been, or, is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any other place. We found that all these three conditions have been complied with by the Assessing Officer. 9. Now the question arises whether the Assessing Officer has rightly disallowed deduction u/s 80IB(10) of the Act on the basis of amended provisions which came on the statute at a later date i.e. 1.4.2005. The obvious reply is No because it is established law that substantive law unless made specifically retrospective has only to be understood as having prospective operation from the date on which it becomes law or any other date specified in the statute. 10. With regard to the retrospective application of the amendment, it was held by the Hon ble Supreme Court in State of Kerala vs. Lex George (2004) 271 ITR 290 that where schedule of rates was modified reducing inter alia exemption limit, the effect could be given in the next succeeding year. While coming to this conclusion, the Hon'ble Court also considered the decisions in Govind Ganga Saran vs. CST (155 ITR 144) (SC), Good Year India Ltd. vs. State (188 ITR 402) (SC), Keshave Ram Ind. Cotton Mills vs. CWT (59 ITR 767) (SC), Reliance Jute Ind. Ltd. vs. CIT (120 ITR 921) (SC) and Tea State India Ltd. vs. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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