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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
आयकर अपीलीय अधिकरण “B” न्यायपीठ म ुंबई में। IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI श्री महावीर स िंह, न्याययक दस्य एविं श्री राजेश कुमार लेखा दस्य के मक्ष। BEFORE SRI MAHAVIR SINGH, JM AND SRI RAJESH KUMAR, AM Aayakr ApIla saM./ ITAs No. 3690 & 3691/Mum/2018 (inaQa-arNa baYa- / Assessment Year 2006-07 & 2007-08) M/S Bhavya Construction The Asst. Commissioner of Income-tax Co. 25(2), Patyakshkar Bhavan, C11, 4, Bhide Bungalows, 37-A, Vs. Bandra Kurla Complex, Bandra, M.G. Road, Vile Parle Mumbai-400 051 (East), Mumbai-400 057 (ApIlaaqaI- / Appellant) .. (p`%yaqaaI- / Respondent) स्थायी लेखा िं./PAN No. AAAFB1375K अपीलाथी की ओर े / Appellant by : Shri Dr. K Shivaram, Sr. Advocate Ms. Neelam Co Jadav, ARs प्रत्यथी की ओर े / Respondent by : Shri Chaudhary Arun Kumar Singh, CIT DR ुनवाई की तारीख / Date of hearing: 13.08.2019 घोषणा की तारीख / Date of pronouncement : 21.08.2019 AadoSa / O R D E R महावीर स ुंह, न्याययक दस्य/ PER MAHAVIR SINGH, JM:
These two appeals of assessee are arising out of the different orders of the Commissioner of Income Tax (Appeals)-37, Mumbai in appeal Nos. CIT(A)-37/IT-218 & 219/ACIT-25(2)/16-17 of even date 14.03.2018. The Assessments were framed by the Income Tax Officer, Ward-21(1), Mumbai (in short ITO / AO) for the A.Ys. 2006-07 and 2007- 08 vide even dated 12.03.2013, under section 143(3) of the Income-tax Act, 1961 (hereinafter ‘the Act’). The penalties were levied under section 271(1)(c) of the Act vide orders of even date 31.03.2016 for AYs 2006-07 & 2007-08. ITAs No.3690 & 3691/Mum/2018 2. The only common issue in these two appeals of assessee is against the order of CIT(A) confirming the levy of penalty by the AO under section 271(1)(c) of the Act for furnishing of inaccurate particulars of income. For this assessee has raised the following common grounds in both the years and issue and facts are identical. Hence, we will take the facts from AY 2006-07. The grounds raised by assessee reads as under: -
1. The learned Commissioner of Income-tax (appeals) 37 erred in facts and in law in not appreciating that the show cause notice issued under section 247 read with section 271(1)(c) of the Income-tax Act 1961 (“Act”) did not specify whether the proceedings were initiated for concealment of income or for furnishing inaccurate particulars of income.
The learned Commissioner of Income-tax (Appeals) 37 erred in facts and in law in holding that the appellant had furnished inaccurate particulars of income and thereby levying penalty under section 271(1)(c) of the Act of ₹ 9,65,870/-.
The learned Commissioner of Income-tax (Appeals) 37 erred in facts and in view in not appreciating the fact that the claim of deduction under section 80IB(10) of the Act of the appellant is not a debatable issue and therefore, it does not amount to concealment of furnishing inaccurate particulars of income.
ITAs No.3690 & 3691/Mum/2018 4. The learned Commissioner of Income-tax (Appeals) 37 erred in facts and in law in not appreciating that the Mumbai Tribunal, in the case Ramesh Gunshi Dedhia v. ITO (2014) 148 ITD 356 and in the case of ITO v. Asha Kashiparasad Ringsingha Pandurang Sadan (2013) 56 SOT 340, on similar issue involving claim of deduction under section 80IB(10) of the Act had granted relief to the assessee.”
3. Briefly stated facts are that the assessee is a partnership firm engaged in the business of construction of residential building and selling them. During the previous year relevant to AY 2006-07, the assessee had constructed the housing project approved by Slum Rehabilitation Authority and completed to residential building under the housing scheme/ project approved by SRA. Originally, the assessee returned the income earned from the project and offered for tax. Subsequently, on being advised by assessee’s consultant, the assessee revised the return of income and claimed deduction under section 80IB(10) of the Act and according to assessee all the conditions of section 80IB(10) of the Act are satisfied. The AO during the course of assessment proceedings got the conditions verified but the scheme was not notified by the CBDT and hence, the claim of deduction under section 80IB(10) of the Act was disallowed. Meanwhile, the CBDT issued notification dated 03.08.2010 and 05.01.2011 and on this basis claim of deduction under section 80IB(10) of the Act. But the AO disallowed the claim of deduction and CIT(A) in the original order confirmed the disallowance of deduction by stating that the assessee has not been able to produce CBDT notification and hence, the assessee is not eligible for deduction. Aggrieved, assessee preferred the appeal before Tribunal in first round in for AY 2006-07 vide order dated 14.10.2011, whereby ITAs No.3690 & 3691/Mum/2018 the Tribunal has restored the matter back to the file of the AO to examine the conditions in view of CBDT notification No. S4189(e) dated 03.08.2010. The Tribunal directed the AO vide Para 3 as under: - “3. We have heard the arguments of both the sides and also perused the relevant material on record. The learned Counsel for the assessee has submitted that the scheme of the assessee has now been notified by the CBDT as per notification No. S4 1896(E) issued on 3rd August, 2010. He has submitted that since the said notification has been issued by the CBDT only after the passing of impugned order by the learned CIT (Appeals) on 22.01.2010, the assessee could not produce the same either before the AO or before the learned CIT(Appeals). He has argued that in view of the said notification issued subsequently by the CBDT, one more opportunity may be given to the assessee to support and substantiate its claim for deduction under section 80IB(10) before the Assessing Officer. Since the learned Departmental Representative has also not raised any objection in this regard and the assessee, in our opinion, deserves one more opportunity to justify its claim for deduction under section 80IB(10) in view of the notification issued subsequently by the CBDT on 3rd August, 2010, we set aside the orders of the authorities below on this issue and restore the matter to the file of the AO for deciding the issue ITAs No.3690 & 3691/Mum/2018 relating to the assessee’s claim for deduction under section 80IB(10) afresh in the light of the said notification and after giving opportunity to the assessee of being heard.”
The AO again framed the assessment and denied deduction by stating that notification is dated 03.08.2010 and the project is approved on or before 01.04.2005, and hence, the notification cannot given benefit to the project approved before 01.04.2005 as the said notification is issued to give effect to the above mentioned amendment and amendment is effective from 01.04.2005. According to the AO, as per section 80IB(10) of the Act as it is stood prior to 01.04.2005, the minimum size required of the land plot was one acre. However, as per the amendment by Finance Act (No.2) 2004, 2.3.f 01.04.2005, a proviso was added to the said section and condition of one acre is relaxed in case of metros like Delhi or Mumbai for practical reasons. Therefore, the AO again denied the deduction claimed by assessee under section 80IB(10) of the Act. Aggrieved, assessee preferred the appeal before CIT(A), who also confirmed the action of the Assessing Officer. The Tribunal also confirmed the order of CIT(A). Aggrieved, assessee carried the matter before Hon’ble Bombay High Court and question of law is admitted before Hon’ble Bombay High court in Income Tax Appeal No. 653/2012 order dated 08.08.2014, whereby substantial question of law was admitted.
The AO levied the penalty vide order dated 31.03.2016 by stating that the assessee has made wrong claim of deduction under section 80IB(10) of the Act as the date of approval is the first approval of the project which is to be considered for allowing deduction under the section. According to him, the assessee’s buildings were approved in the year 2001 and all the buildings, be it given to the slum dwellers are sale buildings together from a composite project and thus, the date of ITAs No.3690 & 3691/Mum/2018 approval is to be taken for the purpose of claim of deduction under section 80IB(10) of the Act. Hence, the AO levied the penalty as the assessee was never a notified entity by CBDT as SRA project i.e. the project approved after 01.04.2005. Hence, he levied the penalty under section 271(1)(c) for furnishing of inaccurate particulars of income. Aggrieved, assessee preferred the appeal before CIT(A), who also confirmed the action of the AO. Aggrieved, now assessee is in appeal before Tribunal.