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Income Tax Appellate Tribunal, “H” BENCH, MUMBAI
O R D E R
Per B R Baskaran, AM:
The appeal filed by the assessee is directed against the order 30.3.2015 passed by the ld. Principal CIT-20, Mumbai for the assessment year 2005-06. The assessee is challenging the validity of revision order passed by the ld. Principal CIT.
The ld. Counsel appearing for the assessee submitted that the impugned assessment was passed by the AO u/s 143(3) read with section 254 of the Act, consequent to the order passed by the ITAT restoring the matter relating to deduction u/s 80IB(10) of the Act to the file of the AO. In the set aside proceedings, the ld. AR submitted that the AO has 2 3 31 6 / Mum / 20 1 5 considered the Notification dated 5.1.2011 issued by Ministry of Finance and also clause (b) of section 80IB(10) of the Act and accordingly allowed the claim of the assessee. The ld. AR further submitted that the assessee has developed Housing Project under Slum Rehabilitation Scheme hence the condition relating to minimum area of development shall not apply. Accordingly the ld. AR submitted that the AO has applied his mind on this issue and has taken a possible view. Accordingly he submitted that the ld. Principal Commissioner does not acquire jurisdiction to revise the same u/s 263 of the Act. The ld. Counsel placed his reliance on the decision of Hon’ble Supreme Court of India rendered in the case of CIT V/s Max India Ltd.(2008) 166 TAXMAN 188 (SC) and submitted that the impugned revision order is liable to be quashed.
On the contrary, the ld DR submitted that the AO has allowed the claim of the assessee without examining as to whether the project developed by the assessee fall under the category of Slum Rehabilitation Scheme. Further the Slum Rehabilitation Scheme has to be approved after 1.4.2004 in order to become eligible for deduction u/s 80IB(10) of the Act, whereas the project of the assessee was approved prior to 1.4.2004. Accordingly, the Ld D.R submitted that the AO has allowed the claim the deduction u/s 80IB(10) of the Act without examining this vital factor and hence the assessment order has been rendered erroneous and prejudicial to the interest of Revenue.
We heard the rival contentions and perused the record. We find merits in the contention of the of the ld. DR, since the assessment order does not discuss anything about Slum Rehabilitation Scheme and its applicability to the project developed by the assessee. Further the AO also did not examine about the details relating to the date of approval of the 3 3 31 6 / Mum / 20 1 5 project and further about the applicability of notification dated 5.1.2011 to the scheme of the assessee. Under these set of facts, we are of the view that the AO has failed to examine vital details relating to the deduction u/s 80IB(10) of the Act and hence we are of the view that impugned assessment order is rendered erroneous and prejudicial to the interest of Revenue. It is well settled proposition that the lack of enquiry on the part of the AO makes the assessment order erroneous and prejudicial to the interest of the revenue, as held by the Hon’ble Supreme Court in the case of Malabar Industrial Company (243 ITR 83). Accordingly, we do not find any infirmity in assuming the jurisdiction by ld. Principal CIT u/s 263 of the Act.
The ld. AR submitted that the Principal CIT, in para 19 of the impugned order, has directed the AO to reject the deduction u/s 80IB(10) of the Act. The ld. AR submitted that the ld. Principal CIT has closed the doors of the assessee and also did not give open hand to the AO to examine the points raised by him in an independent manner. The ld. AR submitted that the assessee should be allowed to make its submissions before the AO and accordingly prayed that the direction given by the Principal CIT may kindly be modified. We find merit in the prayer made by the ld. AR. Accordingly, we modify paragraph 19 of the order passed by the ld. Principal CIT and direct the AO to examine the issue of deduction allowable under section 80IB(10) of the Act to the assessee afresh, without being influenced by the observations made by ld. Principal CIT and also direct the AO to take appropriate decision in accordance with law, after affording adequate opportunity of being to the assessee.
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