Chhaya Valmik Nikhade By Legal Heirs Valmik Ramchandra Nikhade v. The Asstt.commissioner Of Income Tax Circle- 2, Nashik And Anr

IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.6900 OF 2013WITHWRIT PETITION NO.6901 OF 2013WITHWRIT PETITION NO.6905 OF 2013WITH WRIT PETITION NO.6906 OF 2013 Chhaya Valmik Nikhade by legal heirs Valmik Ramchandra Nikhade...Petitioner. vs.The Asstt.`Commissioner of Income TaxCircle- 2, Nashik and anr. ..Respondents. Mr.Mihir Naniwadekar for the Petitioner.Mr. Tejveer Singh for the Respondents. CORAM : M. S. SANKLECHA AND G.S. KULKARNI, JJ.DATE : 22 JULY 2014 DATE : PC: These petitions challenges one notice dated 20 March 2013 and three notices dated 25 April 2013 issued under Section 148 of the Income Tax Act 1961(“the Act”) seeking to reopen assessments for A.Y. 2006-07, 2007-08, 2008-09 and 2009-10 respectively. 2) The grounds communicated to the petitioner in support of the impugned notices for all the four assessment years are identical and read as under:- “During the scrutiny assessment proceedings for the A.Y. 2010-11 in the assessee's case, it was found that the assessee was constructing a housing project of 126 Row Houses at Karjat, Ahmednagar. On this projecttheassesseeclaimeddeduction u/s.80IB(10).During the assessment proceedings for A.Y.2010-11, it was found that the project was commenced on 20.12.2005.As per provision of section 80IB(10) of the Act, the project should have been completed on or before 31.03.2011. On physical verification of project site it was found that the project was not completed till the date of assessment i.e.25.3.2012. During verification it was also found that 5 Row Houses bunglows out of 125 Row Houses bunglows were still under construction. This verification is carried out along with Shri.B.G. Kaygude, the Gram Vikas Adhikari of Karjat. Therefore, it is factually established that the project of the assessee was not completed on or before 31/3/2011.As the project was not completed by the assessee within the stipulated time as per the provisions of Section 80IB(10) of the Act, hence,the assessee is not eligible for getting deduction u/s.80IB(10) of the Act. The entire deduction u/s.80IB on this project is not allowed. However, deduction of Rs.2,47,414/-has been allowed for the A.Y.2006-07. Therefore, I have reason to believe that income to the extent of Rs.2,47,414/- has escaped assessment for the A.Y.2006-08.Therefore,the assessment for A.Y.2006-07 was required to be reopened u/s.147 of the I.T. Act.” 3)The petitioner filed objections which are identical in nature to all the four impugned notices. The Assessing Officer disposed of the petitioner's objections by four identical worded orders dated 25 June 2013, in particular, holding as under:- (extracted portion) “You have enclosed a copy of the completion certificate with respect to the housing project at Karjat under the sign and seal of the Sarpanch of Karjat Gram Panchyat. It may please be noted that the Gramsevak/Gram Vikas Adhikari is the Executive Officer of the Gram Panchayat and not the Sarpanch. Hence, the panchanama signed by the Gram Vikas Adhikari prevails over the certificate issued by the Sarpanch. Further it has been factually established form the Panchanama and Photographs taken during the physical verification that project of the assessee was not completed on or before 31.3.2011.As the project was not completed by the assessee within the stipulated time asper the proviso of Section 80IB(10) of the Act, the assessee is not eligible for getting deduction u/s. 80IB (10) of the Act. The entire deduction u/s.80IB on this project is not allowed. This fact is also evident from the assessment order dated 25.3.2013 passed u/s.1243(3) of the Act for the A.Y.2010-11. In view of the foregoing, your objection towards reasons to believe for reopening of assessment u/s. 148 for the A.Y.2006-07 is not tenable and hence, not acceptable.” Further it has been factually established form the Panchanama and Photographs taken during the physical verification that project of the assessee was not completed on or before 31.3.2011.As the project was not completed by the assessee within the stipulated time asper the proviso of Section 80IB(10) of the Act, the assessee is not eligible for getting deduction u/s. 80IB (10) of the Act. The entire deduction u/s.80IB on this project is not allowed. This fact is also evident from the assessment order dated 25.3.2013 passed u/s.1243(3) of the Act for the A.Y.2010-11. In view of the foregoing, your objection towards reasons to believe for reopening of assessment u/s. 148 for the A.Y.2006-07 is not tenable and hence, not acceptable.” 4)Mr. Naniwadekar, learned Counsel appearing for the petitioner states that the completion certificate furnished by the Sarpanch of the Gram Panchayat is the certificate issued by the appropriate local authority i.e. Gram Vikas Adhikari. Thus, the Assessing Officer has misunderstood the Certificate and denied the benefit. Moreover, it is submitted that the Certificate issued by the Gram Vikas Adhikari i.e Gram Panchayat is conclusive in nature for the purposes of 80IB (10) of the Act. In view of the above, it is submitted that the impugned notices be quashed and set aside. 4)We find that the order dated 25 June 2013 as well as grounds communicated in support of the impugned notices state that on factual examination the respondent revenue found that the petitioner have not completed the project within stipulated time i.e. on or before 31 March 2010 and therefore, they are unable to qualify for deduction under Section 80IB (10) of the Act. This determination is a factual and best determined by the authorities under the Act. Moreover, the other issue of certificate is of the local authority and conclusion is a matter of interpretation of Section 80IB of the Act. This is particularly so as Section 80IB (10) of the Act does not in terms state that the Certificate of the Gram Vikas Adhikari i.e. local authority is conclusive in nature. In view of the above, these issues can well be determined during the reassessment proceedings before the assessing authority. In the above view, we see no reason to entertain the present petitions. 5)However, we wish to make it clear that our observations with regard to these petitions are only restricted to consideration whether to entertain the petition under Article 226 of the Constitution of India. The Assessing Officer will consider all the objections of the petitioner including the objection with regard to lack of jurisdiction during the assessment proceedings. The observations made by us in this order will not in any manner influence the application of law to the present facts by the Assessing Officer. All contentions left open. 6)All the petitions are dismissed. No order as to costs. (G. S. KULKARNI, J.) (M.S. SANKLECHA, J.)