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Facts
The assessee, a partnership firm engaged in business of builders and developers, declared Nil income for AY 2010-11. The AO issued notices under sections 143(2) and 142(1) which were returned unserved, and subsequently affixed. The assessee claimed deduction u/s 80IB(10) of Rs. 6,65,13,648/- which was disallowed by the AO.
Held
The Tribunal held that the AO validly served the notice u/s 143(2) by affixation after the notice sent by post was returned unserved. Regarding the disallowance u/s 80IB(10), the Tribunal found that the assessee failed to fulfill the basic conditions, specifically by not submitting proof of completion of the project and other required documents.
Key Issues
Whether the notice u/s 143(2) was validly served and whether the assessee fulfilled the conditions for deduction u/s 80IB(10).
Sections Cited
143(3), 250, 143(2), 142(1), 80IB(10), 282
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “A”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of assessee pertaining to A.Y. 2010-11 is directed against the order dated 28.11.2024 of National Faceless Appeal Centre (NFAC) Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Assessment Order dated 28.03.2013 passed u/s.143(3) of the Act.
When the case was called for, none appeared on behalf of the assessee. We notice that when the case was fixed for hearing on 26.03.2025 no one appeared on behalf of the assessee. Thereafter on 15.04.2025, at the request of ld. AR case adjourned to 24.06.2025. On 24.06.2025 Ms. Ritika Agarwal appeared through virtual mode and sought M/s. Abhishek Builders and Developers adjournment and the case adjourned to 26.06.2025. Today also none appeared on behalf of the assessee. Conduct of the assessee clearly shows that assessee is not interested to pursue the appeal. We therefore proceed to adjudicate the appeal with the assistance of ld. DR.
Assessee has raised following grounds of appeal :
“1. BECAUSE, the entire assessment proceedings and first appellate proceedings are violative of principle of natural justice since the orders are passed: (a) without dealing with the contentions of the Appellant, (b) are based upon alleged default of the Appellant in submitting documents that were not called for, (c) without calling for details of affixture of notice from the AO even on request by the Appellant.
2. BECAUSE, the impugned assessment order is illegal and invalid since the mandatory notice u/s. 143(2) has neither been issued nor served validly.
3. BECAUSE, the CIT(A) has erred in law and on facts in upholding the service of notice u/s. 143(2) by affixture without addressing the objections raised by the Appellant through its written submission dated 26/06/2023.
4. BECAUSE, the CIT(A) has erred in law and on facts in confirming the disallowance of claim of deduction u/s. 80IB(10) of the Income Tax Act, 1961 amounting to Rs.6,65,13,648/- only because completion certificate was not received.”
Brief facts of the case are that the assessee is a partnership firm engaged in the business of Builders and Developers. Nil income declared in the e-return for A.Y. 2010- 11 furnished on 31.03.2012. As per the ld. AO, valid notice u/s.143(2) and 142(1) of the Act were issued to the assessee on 10.09.2012 at the last known address of the assessee and it came up with the remarks of the postal authorities as ‘unclaimed’. Subsequently, notice was affixed in the last known address. Thereafter, Mr. Sunil Tiwari, CA attended M/s. Abhishek Builders and Developers and submitted the letter of authority and also filed submissions on 25.03.2013 and 28.03.2013 in compliance to the notices to the questionnaire issued with notice u/s.142(1) of the Act. Ld. AO observed that the assessee has claimed deduction u/s.80IB(10) of the Act at Rs.6,65,13,648/-. Ld. AO after examining the details filed by the assessee came to conclusion that the assessee has not fulfilled the conditions for being eligible for deduction u/s.80IB(10) of the Act and accordingly rejected the claim and assessed income at Rs.6,65,13,648/- as against Nil income declared in the income-tax return. Thereafter, aggrieved assessee preferred appeal before ld.CIT(A) but failed to succeed.
Now the assessee is in appeal before this Tribunal.
Though there is no appearance on behalf of the assessee however paper book running into 166 pages has been placed on record which contains the documents for A.Y. 2010-11, details of notices issued u/s.142(1) and replies filed by the assessee, documents relating to the project, submissions before ld.CIT(A) and the remand proceedings.
On the other hand, Ld. DR vehemently argued supporting the order of ld. CIT(A).
We have heard the ld. DR and perused the record placed before us. Assessee is aggrieved with the denial of deduction u/s.80IB(10) of the Act at Rs.6,65,13,648/- and also challenged the validity of the assessment proceedings on the ground that no valid notice u/s.143(2) of the Act has been served upon the assessee. We will firstly take up the legal issue regarding the service of notice u/s.143(2) of the Act. We note that the assessee has filed return of income on 31.03.2012 and the address mentioned in the income-tax return is Plot No.79/80, Sector 20, Khargar, Navi Mumbai, Mumbai 410210. On this very address, ld. AO has issued notice u/s.143(2) and 142(1) of the Act but the same returned unserved. We notice that section 282 of the Act provides the mechanism of Service of notice generally and the same reads as under :
“Service of notice generally. 282. (1) The service of a notice or summon or requisition or order or any other communication under this Act (hereafter in this section referred to as "communication") may be made by delivering or transmitting a copy thereof, to the person therein named,— (a) by post or by such courier services as may be approved by the Board; or (b) in such manner as provided under the Code of Civil Procedure, 1908 (5 of 1908) for the purposes of service of summons; or (c) in the form of any electronic record as provided in Chapter IV of the Information Technology Act, 2000 (21 of 2000); or (d) by any other means of transmission of documents as provided by rules made by the Board in this behalf.
(2) The Board may make rules providing for the addresses (including the address for electronic mail or electronic mail message) to which the communication referred to in sub-section (1) may be delivered or transmitted to the person therein named.
Explanation.—For the purposes of this section, the expressions "electronic mail" and "electronic mail message" shall have the meanings as assigned to them in Explanation to section 66A of the Information Technology Act, 2000 (21 of 2000).”
We have gone through the provisions and observe that ld. AO has first sent the notices through post on the last known address of the assessee and when the same was returned unserved, ld. AO has deputed the Inspector and has affixed the notices at the last given address of the assessee. I therefore find that ld. AO has followed the necessary procedure and has validly served the notice u/s.143(2) of the M/s. Abhishek Builders and Developers Act because there is no evidence on record to establish as to whether the assessee has intimated the ld. AO about the new address which was subsequently made known to the AO through the Authorised Representative of the assessee which is Flat No.1101, 11th Floor, Neelkanth Pride, Sector-44, Opp. to S.S. High School, Nerul, Navi Mumbai 400 706.
9.1 Ld. AO has thereafter issued fresh notice u/s.142(1) on the new address. Under these given facts and circumstances, we fail to find any infirmity in the finding of ld.CIT(A) given in para 9.7 of the impugned order holding that valid notice u/s.143(2) of the Act has been served upon the assessee and therefore Grounds of appeal Nos. 1 to 3 raising the legal issue about non-service of notice u/s.143(2) of the Act are hereby dismissed.
10. Now we take up Ground No.4 raised on merits which relates to the disallowance of claim u/s.80IB(10) of the Act. We note that ld. AO after thoroughly examining the details filed by the assessee has denied the claim observing as follows :
“3. The assessee firm carries on the business as Builders & Developers. During the year the assessee has shown total turnover of 486104177/-and shown net profit of Rs 66513647 which works out to13.68%. Assessee has claimed deduction under section 80IB (10) on the profit and filed the return accordingly. The details submitted during the course of assessment has been scrutinized. The assessee has first attended before the undersigned on 22/3/2013 and the last attended on 28/3/2013. The enquiries which are required to be carried out for allowing the deduction under section 80 IB (10) viz: (i) Ascertaining the area of the plot. (ii) Obtaining the copy of commencement and completion certificate from the local authority. (iii) Vetting out the sanctioned plan.
(iv) Area of each flat and physical verification of the site for ascertaining the area of flat as per the norms laid out by section 80IB (10). (v) To ascertaining the commercial area constructed The above mentioned verification could not be carried out because of the paucity of time and case is getting barred by limitation on 31/3/2013. It is further mentioned here that the details submitted by the assessee shows that the assessee has sold more than one flats to many individual there by violating the provisions of section 801B (10) and prime facie the assessee is not entitled for deduction under section 801B (10) of the IT Act 1961. Therefore the claim of the assessee is rejected and the income of the assessee is computed as under :
Income from Business of Profession : 66513648 Gross Total income : 66513648 Total income : 66513648
Further, we note that ld.CIT(A) has confirmed the action of the Assessing Officer observing as follows :
“9.8 On the eligibility of the appellant to seek deduction u/s.80IB(10).
The appellant has submitted host of documents to mark the completion of events in the process of construction and these are all circumstantial evidence. The appellant had also claimed to have submitted the application for completion certificate which has not been submitted during the appellate proceedings as well. Accordingly, the substantive and conclusive documentation in this case has not been submitted which would result in upholding the disallowance of claim of deduction as done by the AO. Even during the remand report, the AO has exhaustively discussed this issue and had pleaded for upholding the stand taken on this issue. The appellant's alternate plea that taking into account the events post completion of the project that it had incurred only loss cannot be entertained unless proof is adduced thereof. Mere bald statements in the error would alter the results as per the financial results approved by the AGM of the Board and admitted in a duly verified return of income.
Therefore, the reliance upon legal precedents in other cases, which are distinguishable from that of the appellant, the decision of the AO denying the claim of deduction does not warrant interference. The other violations pointed out by the AO and stoutly contested by the appellant do not call for adjudication as the appellant has failed in the submission of proof of completion of the Project within the time allowed as per the statute.
M/s. Abhishek Builders and Developers In the result, the appeal is dismissed.”
From going through the above finding of ld.CIT(A) along with observation of ld. Assessing Officer, we find that the assessee in order to claim deduction u/s.80IB(10) of the Act needs to fulfil the basic conditions prescribed under the said provision. Since the observation of the Ld.AO as well as the ld.CIT(A) remains to be rebutted by the assessee by making any written submissions by means of filing any relevant details and prima-facie it is noticed that assessee failed to fulfil the conditions prescribed under the Act for claiming deduction u/s.80IB(10) of the Act, we fail to find any infirmity in the finding of ld.CIT(A) and accordingly disallowance u/s.80IB(10) of the Act is hereby confirmed. Ground No.4 is also dismissed.
In the result, the appeal filed by the assessee is dismissed.
Order pronounced on this 03rd day of September, 2025.