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TMI Blog2022 (10) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... n in CIT Vs Gabriel India Ltd. [ 1993 (4) TMI 55 - BOMBAY HIGH COURT] and the Hon ble Apex Court in Malabar Industrial Co Ltd. Vs CIT [ 2000 (2) TMI 10 - SUPREME COURT] Ergo, in the above context, we find the order of Ld PCIT is unsustainable in law, consequently we quash revisionary order passed u/s 263 of the Act and restore the order of assessment passed u/s 143(3). Appeal of appellant allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... e time of, hearing of the appeal, so as to enable the learned bench of Appellate Tribunal to decide this appeal according to law. (Emphasis Supplied) 4. The facts of the case, succinctly stated as; 4.1 The assessee is a partnership firm engaged in the business of real estate projects including development of housing projects and derives income from sale of real estate units including Flats, Shops & raw houses etc. For the assessment year [for short "AY"] 2010-2011 the assessee e-filed its return of income [for short "ROI/ITR"] on 27/09/2010 declaring total income of ₹2,58,650/-, which was processed summarily u/s 143(1) of the Act. The case of the assessee selected for scrutiny under CASS by issue of statutory notice u/s 143(2) dt. 29/08/2011 and finally the assessment u/s 143(3) were completed accepting the returned income. 4.2 The Ld. PCIT after culmination of the assessment proceedings, called for the assessment records and upon perusal thereof, disagreement with the action of Ld. AO, invoked the revisionary powers vested in him by virtue of section 263(1) and held the orders of assessment as erroneous insofar as it were prejudicial to the interest of the revenue on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eipts (Flat, Shop, & Row House) of development of housing project and Commission & Brokerage. The audit report in Form No 3CB and Form No 10CCB and financial statements are submitted. The assessee submitted copy of bank pass book and bank statement during the course of assessment proceedings and also produced relevant document in respect of claim of deduction u/s 80IB(10) in chapter VI-A, which were verified on test check basis. In view of the above and discussion, the returned income of the assessee is accepted." (Emphasis Supplied) 6.2 As far as the revisionary proceeding is concern, it transpires from the show cause notice [for short "SCN"] dt 17/12/2014 & 30/12/2014 issued u/s 263 of the Act calling upon the assessee, to show case as to why in the absence of completion certificate from a Local Authority certifying the completion of housing project, the deduction u/s 80IB(10) should not be denied. In response to SCN, the appellant assessee was represented by the authorised representative and filed written submission on 16/01/2015 relying on the decision of Hon'ble Gujarat High Court in the case of "CIT Vs Tarnetor Corporation" reported at 362 ITR 174 (Guj). The bone of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of section 80IB(10) so as to entitle for deduction and upon the inquiry into, on satisfaction, the Ld. AO allowed the claim. (2) the revisionary authority erred in invoking the provisions of section 263 merely on the audit objection and on the issue which was duly inquired into during the course of assessment proceedings without rebutting the claim of deduction on technical ground. Per contra, the departmental representative [for short "DR"] placing a strong reliance on the order of revisionary authority contended that, non-compliance of mandate of law cannot be an excuse and mere application to local authority for obtaining completion certificate cannot ispo-fact be taken as compliance of law, hence in the absence of certificate establishing the date by which housing project cannot be inferred, consequently the claim of the assessee. 8. To before shooting the balloon, it will be apt to first reproduce the provision of section 80IB(10) and 263(1) in verbatim as it stood and applicable to the AY under consideration; 7.1 80IB : Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings. (10) The amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formation [for short "RTI"] it is also placed on records that, for the administrative / technical reasons, the local authority did not issue certificate to anyone during the contemporary period, and in this respect, we are mindful to quote the decision of Hon'ble jurisdictional High Court in the case of "PCIT Vs Dharti Enterprise" where the Lordship have held that; "We find that this issue is now no longer res integra as it stands concluded against the Revenue and in favour of the Respondent by the decision of this Court in CIT v/s. Hindustan Samuh Awas Ltd., 377 ITR 150 . In the above case, it has been held that whether the project is completed within the time framed provided under Section 80IB(10) of the Act, and an application for issuance of completion certificate is filed within time, then delay on account of the competent authority in issuing completion certificate would not deprive the Assessee, the benefit of Section 80IB(10) of the Act." (Emphasis Supplied) 7.2 Now coming to the validity of assumption of revisionary jurisdiction; 263. Revision of orders prejudicial to revenue - (1) The Commissioner may call for and examine the record of any proceeding under this A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of law or passing an order without application of mind or without applying the principle of natural justice, shall discretely be sufficient to hold the order being erroneous. Albeit the term prejudicial to the interests of the revenue is not at all defined in the Act, but is needs to be understood in its ordinary meaning and it is of wide import and is not confined to mere loss to ex-chequer. 7.5 In the light of ration laid down by Hon'ble Supreme Court of India on the subject matter, we have the audacity to summarise the inferential but harmonious analysis of revisionary provision laid in section 263 of the Act, into a five steps "Queen Principle", falling out of which the assuming revisionary jurisdiction u/s 263 shall be contra legem, and these steps are; (1) There must be an explicit query from the adjudicating tax authority as regards to any claim made including information supplied in the return of income filed or to be filed, and (2) There must be direct, clear and an unreserved submission from the assessee in reply to aforesaid query, and (3) The submission must be followed by detailed inquiry (and not mere enquiry) by the tax authorities into assessee's eligibility of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide the dispute according to procedure consistent with the principles of natural justice; he cannot permit his judgment to be influenced by matters not disclosed to the assessee, nor by dictation of another authority." (Emphasis supplied) 10. Considering the facts of the case extenso, we concede with the contention of the Ld. AR that, in support of appellant claim as expounded hereinbefore at para 6, there was indeed unvarying and indistinguishable material placed before both these tax authorities during the course of regular assessment vis-à-vis revisionary proceeding, which in turn demonstrates that, the Ld. AO considering the same submission of the assessee carried out inquiry with respect to eligibility of claim, basis of claim and compliance relating thereto(if any) and then finalized the assessment taking one of the plausible view in the light of settled legal position in allowing the deduction u/s 80IB(10) of the Act, this evidently concludes that the adjudication squarely fell within aforementioned "Queen Principle". Whereas under revisionary proceedings Ld. PCIT yet again conducted an inquiry into the claim of the appellant based on the like material and sitt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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