INCOME TAX OFFICER, WARD-2(1), KALYAN vs. EXCEL REALITY, ULHASNAGAR

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ITA 2552/MUM/2018Status: DisposedITAT Mumbai08 August 2019AY 2012-134 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the CIT(A) correctly quashed the revisionary order under Section 263, making the consequent assessment order infructuous. The Bombay High Court judgment was distinguished as it pertained to a different factual matrix where land use conversion and specific construction permissions were not obtained.

What were the facts?

The Revenue appealed against the CIT(A)'s order which allowed the assessee's claim for deduction under Section 80IB(10). The CIT(A) had quashed a revisionary order under Section 263, rendering the assessment order infructuous. The Revenue argued that Gram Panchayat approval for construction was illegal, citing a Bombay High Court judgment.

What were the issues?

Whether the CIT(A) erred in quashing the revisionary order under Section 263, and whether the Gram Panchayat's approval for construction was valid for Section 80IB(10) deduction.

Which sections of the Income-tax Act were involved?

Section 80IB(10),Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI

Before: SHRI RAJESH KUMAR & SHRI RAM LAL NEGI

For Appellant: Shri k. Gopal, A.R, Ms. Neha Paranjpe, A.R
For Respondent: Shri R. Manjunatha Swamy, D.R
Hearing: 25.06.2019Pronounced: 08.08.2019

Per Rajesh Kumar, Accountant Member:

1.

The present appeal has been preferred by the Revenue against the order dated 12.03.2018 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2012-13.

2.

The issue raised by the Revenue is against the order of Ld. CIT(A) wherein the Ld. CIT(A) has held that Gram Panchayat, Aadai is competent authority for the purpose of issuing approval and completion certification for the purpose of claiming deduction under section 80IB(10) of the Act by ignoring the fact that the Hon’ble Bombay High Court in the case of Ramanad

2 M/s. Excel Reality Prajapati vs. State of Maharashtra has dismissed the petition filed by the builder by holding that permission obtained from Gram Panchayat for constructing residential building in Gram Panchayat area is illegal.

3.

At the outset, the Ld. counsel of the assessee pointed out that the present proceedings are emanating out of the revisionary order passed by Ld. CIT under section 263 of the Act. The Ld. A.R. pointed out that the revisionary order passed by the Pr. CIT has been quashed by the Tribunal vide order dated 20.12.2017 and thus the assessment order passed under section 143(3) read with section 263 becomes infructuous. However, the contention of the Ld. A.R. was strongly opposed by the Ld. D.R. on the ground that the Hon’ble Bombay High Court in the case of Ramanad Prajapati vs. State of Maharashtra (supra) has dismissed the petition on 10.07.2017 pertaining to the demolition of building in the same village Aadai wherein the Hon’ble Bombay High Court has held that the permission granted by the Gram Panchayat for construction of building is illegal and accordingly the order of Ld. CIT(A) which is passed without considering the decision of the High Court is bad in law and should be reversed.

4.

After hearing both the parties and perusing the material on record, we observe that the Ld. CIT(A) allowed the appeal of the Revenue on the ground that the revisionary order passed under section 263 of the Act has been quashed by the Tribunal vide order dated 20.12.2017 and therefore consequent assessment order under section 243(3) read with section 263 is rendered infructuous. In our opinion, the Ld. CIT(A) has taken a very

3 M/s. Excel Reality correct view of the matter that since the revisionary proceedings are no more in existence, the consequent order will also not survive. So far as the decision of Ramanad Prajapati vs. State of Maharashtra (supra) writ petition NO.11276 of 2014 is concerned, we observe that the same was rendered in a totally different contexts. The Hon’ble Bombay High Court has dismissed the petition filed by the builder on the ground that building construction in the same village on the basis of permission granted by the Gram Panchayat is illegal as the permission granted by the Gram Panchayat is in the nature of no objection and not the permission to construct the building and the authority to grant the permission to construct was with the district Collector whereas in the present case the builder has carried out the construction after converting the land use into non agricultural landing after obtaining due permission from the District Collector for construction of buildings. Under these circumstances, we are of the considered view that order of ld CIT(A) is correct and accordingly uphold the same by dismissing the appeal of the Revenue.

5.

In result the appeal of the revenue is dismissed.

Order pronounced in the open court on 08.08.2019.

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