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Income Tax Appellate Tribunal, DEHRADUN CIRCUIT BENCH: DEHRADUN
PER M.BALAGANESH, AM: This appeal of the assessee arises out of the order of the
Learned Commissioner of Income Tax (Appeals)-Dehradun
[hereinafter referred to as ‘Ld. CIT(A)’] in Appeal No.10005/2018-19 dated 31/01/2020 against the order passed by Income Tax Officer,
Dehradun (hereinafter referred to as the ‘Ld. AO’) u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) on 30/03/2012 for the Assessment Year 2012-13.
2. The assessee has raised the following grounds of appeal:
“(1) That Appellant has claimed the deduction u/s 801B(10) for Rs. 4648472/- which was added back by the A.O in the A.Y 2012-13 due to no completion certificate has been issued by H.D.A Haridwar, which is the sanction Authority of the MAP & penalty u/s 271(1) (C) of Rs. 1370000/- has been imposed against the assessee.
(2) It is hereby submitted that penalty has been imposed against the Law & Fact of case while assessee has applied completion certificate as on 24.03.2012, but the H.D.A Haridwar has been issued compounding certificate, which is the nature of completion certificate since the extra floor which has constructed by the appellant has been compounded by the H.D.A as per rules & regulation of the authority. The fact has been inquired by the C.IT (A) from the H.DA Haridwar regarding the completion certificate & application filed as on 24.03.2012 for issue of completion certificate u/s 133 (6), but H.D.A Haridwar informed the deptt. that completion certificate has not been issued to the party in response to their request. But did not state that no application for issue of completion certificate has been filed.
(3) Therefore assessee have a quantum appeal is still pending in the court of Hon'ble ITAT, New Delhi. A.O disallowed the deduction only the basis of non submission of completion certificate but the appellant have sufficient grounds belief & bases to claim the deduction u/s 8018 (10) Since appellant had complied with all the provision of by laws u/s 8018 (10) as per order of A.O & application to issue the completion certificate has been filed to issue the same. Appellant view is also supported by the following case law:-
CIT v Reliance Petroproducts Pvt Ltd (2010) 322 ITR 158 (SC) "A mere making of a claim, which is not sustainable in law, by itself will not amount to furnishing inaccurate particulars regarding the income of the assessee."
(4) It is also submitted that as per u/s 8018 (10) there is not requirement to maintain the separate books of account. A.O also consider the fact in his order & did not taken the basis to disallowed the deduction u/s 801B (10) expect the basis was non submission of completion certificate which was also recognized by A.O & C.I.T (A) in A.Y 2012-13 & 2013-14.
(5) It is also submitted that assessee is developing the residential tower for exempted & non exempted area since MAP was approved before 31.03.2008 is relate to exempted & MAP which was approved after 31.03.2008 is relate to non exempted, Therefore construction activities were under program even after 24.03.2012 for the non exempted area & assessee is filling their ITR regularly. Therefore imposition of penalty is against the law & fact of case & C.LT (A) is erred to dismissed the appeal against the law & fact of the case, Since the assessee have valid ground to claim the deduction u/s 8018 (10).
(6) That completion certificate of & value of exempted area has been workout by the approved Valuer (chartered engineer) in their report. Accounting to service tax chartered engineer certificate is equally valid as issued by above local authority.
(7) That all the infrastructure facilities has been handed over to the society of flat owner which means project is complete in all respect & more than 40 % area has been……..
(8) it is also submitted that the time of penalty proceedings has been lapse more that 1 year from the order of C.LT (A).
You are kindly requested to keep the ………proceedings in abeyance till the decision of appeal.
(9) It is further submitted that date was fixed for hearing of penalty proceeding 26.03.2018 but penalty imposed on 23.03.2018, evidence enclosed. Penalty cannot be imposed before the date of hearing as per notice given by A.O. (10) That approved value certificate has been submitted before the A.O & C.I.T (A) which clearly specify that the exempted project has been (Vardhman Tower & Vardhman nagar) completed on 24.03.2012 & there cost of construction has been workout Rs. 14735.91/- per sq.mt. It is also submitted that as per definition of 801B(10) is not compulsory to separate books of account for the project qualify for 8018(10). A.O & C.I.T (A) also accepted the fact in there order & the same policy has been followed by the assessee on consistence basis. (11) That completion certificate issued by the approved chartered Architect have a legal value as per Service Tax Act & also cross signed by the H.D.A along with on the certificate.”
At the outset, we find that the assessee had settled the quantum appeal disputed under Direct Tax Vivad Se Vishwas Scheme, 2020 (VSV) and had paid the taxes thereon. The assessee had already placed on record a copy of Form No.5 issued by competent authority. The present appeal is against the penalty proceedings u/s 271(1)(c) of the Act, since, the entire quantum is settled in the VSV Scheme, 2020, the penalty automatically becomes non-enforceable. Hence, we direct the Ld. AO to delete the penalty in the instant case in view of the aforesaid reasons.
Accordingly, grounds raised by the assessee are allowed.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 17th August, 2023.