M/S.macro Marvel Projects Ltd.,'Gc' Glenden Plaza' v. Assistant Commissioner Of Income Taxcompany Circle-Iv (1)

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 14.02.2022 CORAM : THE HONOURABLE MR. JUSTICE R. MAHADEVANandTHE HONOURABLE MR. JUSTICE J.SATHYA NARAYANA PRASAD Tax Case (Appeal) Nos. 797, 870 and 871 of 2010 M/s.Macro Marvel Projects Ltd.,'GC' Glenden Plaza'813, Poonamallee High RoadKilpauk, Chennai 600 010 ... Appellant in all appeals Versus Assistant Commissioner of Income TaxCompany Circle-IV (1)121, Nungambakkam High RoadChennai 600 034 ... Respondent in all appeals Appeals preferred under Section 260A of the Income Tax Act,1961, against the order of the Income Tax Appellate Tribunal,Chennai,“B”Bench,passedin(i) M.P.No.257/Mds/2009 in I.TA.No.194/Mds/2008 dated 18.12.2009against the order of the Income Tax Appellate Tribunal 'B'Bench, Chennai dated 10.07.2009 made in ITA.No.194/Mds/2008 forthe Assessment Year 2003-2004 against the order of theCommissioner of Income Tax (Appeals) V, Chennai dated 02.10.2007made in ITA.No.103/2006-2007, PAN/GIR No. for theAssessment Year 2003-2004 against the order of the Commissionerof Income Tax (Appeals)-V, Chennai dated 26.06.2007, made inITA.No.103/2006-2007, PAN/GIR.No. for the AssessmentYear 2003-2004 against the order of the Income Tax Officer,Company Ward IV(1), Chennai dated 31.03.2006 made inPAN/GIR.No.AACCM8816D for the Assessment Year 2003-2004. (ii) M.P.No.259/Mds/2009 in I.TA.No.2259/Mds/2007 dated08.01.2010 against the order of the Income Tax AppellateTribunal 'B' Bench, Chennai dated 04.04.2008 made inITA.No.2259/Mds/2007, PAN No. for the Assessment Year2003-2004 against the order of the Commissioner of Income Tax(Appeals) V, Chennai dated 26.06.2007 in ITA.No.103/2006-2007,PAN No. for the Assessment Year 2003-2004 against theorder of the Income Tax Officer, Company Ward IV(1), Chennai dated 31.03.2006 in PAN No. for the Assessment Year2003-2004 and (iii) Order dated 10.07.2009 in I.TA.No.194/Mds/2008 againstthe order of the Income Tax Appellate Tribunal, Chennai, 'B'Bench in ITA.No.194/Mds/2008 dated 10.07.2009 for the AssessmentYear 2003-2004 against the order of the Commissioner of IncomeTax (Appeals) V, Chennai dated 25.06.2007 made inITA.No.103/2006-2007, PAN No. for the Assessment Year2003-2004 against the order of the Income Tax Officer, CompanyWard IV(1), Chennai dated 31.03.2006 PAN No. for theAssessment Year 2003-2004. For Appellant : Mrs. Sree Lakshmi Valliin all the appealsFor Respondent:Mr. Karthik Ranganathan Senior Standing Counsel in all the appeals C O M M O N J U D G M E N T (Judgment of the Court was delivered by R. MAHADEVAN, J) All these tax case appeals are filed by theappellant/Assessee questioning the correctness and/or validityof the orders of the Income Tax Appellate Tribunal, Chennai, “B”Bench, passed in (i) M.P.No.257/Mds/2009 in I.TA.No.194/Mds/2008dated18.12.2009(ii)M.P.No.259/Mds/2009inI.TA.No.2259/Mds/2007dated08.01.2010and(iii)I.TA.No.194/Mds/2008 dated 10.07.2009 respectively. 2. On 20.10.2010, all these Tax Case appeals were admittedby this Court by raising the following substantial questions oflaw: T.C.A. No. 797 of 2010“(i) Whether on the facts and in thecircumstances of the case, the Income Tax AppellateTribunal is right in law in holding that the appellantwas not entitled to deduction under Section 80 IB ofthe Income Tax Act in respect of the housing projectundertaken and constructed by it? (ii) Whether on the facts and in thecircumstances of the case, the Income Tax AppellateTribunal is right in law in holding that the reliefsought for by the appellant amounted to a review ofthe order of the Income Tax Appellate Tribunal and notmerely a rectification of mistake?” https://hcservices.ecourts.gov.in/hcservices/ T.C.A. No. 870 of 2010 2. On 20.10.2010, all these Tax Case appeals were admittedby this Court by raising the following substantial questions oflaw: T.C.A. No. 797 of 2010“(i) Whether on the facts and in thecircumstances of the case, the Income Tax AppellateTribunal is right in law in holding that the appellantwas not entitled to deduction under Section 80 IB ofthe Income Tax Act in respect of the housing projectundertaken and constructed by it? (ii) Whether on the facts and in thecircumstances of the case, the Income Tax AppellateTribunal is right in law in holding that the reliefsought for by the appellant amounted to a review ofthe order of the Income Tax Appellate Tribunal and notmerely a rectification of mistake?” https://hcservices.ecourts.gov.in/hcservices/ T.C.A. No. 870 of 2010 “(i) Whether on the facts and in thecircumstances of the case, the Income Tax AppellateTribunal is right in law in not restoring the appealwhich was withdrawn by the appellant in the peculiarcircumstances of the case? (ii) Whether on the facts and in thecircumstances of the case, the Income Tax AppellateTribunal is right in law in rejecting the petition forrestoration of the appeal?” T.C.A. No. 871 of 2010 “(i) Whether on the facts and in thecircumstances of the case, the Income Tax AppellateTribunal is right in law in setting aside the order ofthe Commissioner of Income-Tax (Appeals), on theground that there is no error apparent on the face ofthe record, which could be rectified? (ii) Whether on the facts and in thecircumstances of the case, the Income Tax AppellateTribunal ought not to have confirmed the order of theCommissioner of Income-Tax (Appeals), holding that theappellant is entitled to relief under Section 80IB(1)of the Income Tax Act?” 3. The Appellant-Assessee is a public limited companyregistered under the Companies Act, 1956 and engaged in thebusiness of land development and construction. On 01.12.2003,the appellant filed their return of income for the assessmentyear 2003-2004 admitting an income of Rs.4,69,426/-. Therespondent-Assessing Officer processed the return of income on20.01.2004 and issued a notice under Section 143 (1) of theIncome Tax Act (in short, the Act) dated 17.11.2005, calling uponthe appellant to submit certain particulars. The representativeof the appellant also appeared before the respondent on28.11.2005 and submitted documentary evidence. Thereafter, therespondent scrutinised the return of income submitted by theappellant and noticed that the appellant originally claimeddeduction of Rs.28,32,048/- under Section 801B(10) of the Act inrespect of the projects undertaken by them titled "MarvelApoorva" and "Wood Creek County". However, in the revised returnof income filed on 03.02.2006, they have restricted their claimof deduction to the project "Marvel Apoorva" only and claimeddeduction of Rs.68,79,782/- and disclosed net loss of https://hcservices.ecourts.gov.in/hcservices/ Rs.35,78,307/-. In the return of income as well as the revisedreturn of income submitted by the appellant, the gross totalincome before deduction under Section 801B(10) was indicated asRs.33,01,474/-. The respondent also noticed that "Marvel Apoorva"was developed by the appellant in a large extent of landmeasuring 2.70 acres and the project consists of commercial aswell as residential blocks. According to the respondent,deduction under Section 801B(10) is allowable only for a housingproject and when the appellant had constructed a commercial cumresidential blocks, they are not entitled for deduction.Therefore, the assessment order dated 31.03.2006 was passeddisallowing the deduction under Section 801B(10) of the Act. 4. Aggrieved by the order of assessment dated 31.03.2006passed by the respondent, the appellant preferred I.T.A. No.103/2006-2007 before the Commissioner of Income Tax (Appeals).The appellate Authority, by order dated 26.06.2007 dismissed theappeal. 4. Aggrieved by the order of assessment dated 31.03.2006passed by the respondent, the appellant preferred I.T.A. No.103/2006-2007 before the Commissioner of Income Tax (Appeals).The appellate Authority, by order dated 26.06.2007 dismissed theappeal. 5. As against the said order dated 26.06.2007 of theCommissioner of Income Tax (Appeals), the appellant filed I.T.A.No. 2259/Mds/2007 before the Tribunal. During the pendency ofthe appeal, the Appellant filed a Rectification Petition inI.T.A. No. 103/2006-2007 on 20.08.2007 before the Commissioner ofIncome Tax (Appeals)/Appellate Authority on the ground that themeasurement/total area over which the commercial blocks wereconstructed, has been incorrectly recorded. Further, it wasstated that the project of the appellant had the approval of theChennai Metropolitan Development Authority. Having regard to theabove submission, the rectification Petition was ordered by theCommissioner of Income Tax (Appeals) on 02.10.2007 and the claimof the appellant for deduction under section 801B(10) wasallowed. Therefore, the appellant withdrew I.T.A. No.2259/MdS/2007 on 04.04.2008 filed before the Tribunal. Asagainst the order dated 02.10.2007 of the Commissioner of IncomeTax (Appeals) allowing the rectification petition of theappellant, the Department has filed I.T.A. No.194/Mds/2008 beforethe Tribunal. 6. The Tribunal, after considering the materials madeavailable, has allowed the appeal filed by the Department inI.T.A. No. 194/Mds/2008 on 10.07.2009, setting aside the orderdated 02.10.2007 passed by the Commissioner of Income Tax(Appeals) observing that after dismissing the appeal filed by theappellant, it was not open to the Appellate Authority to allowthe rectification petition on the ground that it is a rectifiablemistake. It was also stated that the Commissioner of Income Tax(Appeals) has in fact reversed it's own order under the garb ofmodification or rectification, which is not legally permissible.As against this order dated 10.07.2009, Tax Case (Appeal) No. 871 of 2010 is filed by the appellant. 7. As against the order dated 10.07.2009 passed by theTribunal in I.T.A. No. 194/Mds/2008 filed by the Department, theappellant has filed M.P. No. 257 of 2009 in I.T.A. No.194/Mds/2008 before the Tribunal to review its order dated10.07.2009 passed in the appeal preferred by the Department. TheTribunal dismissed the Miscellaneous Petition filed by theappellant on 18.12.2009. Aggrieved by the same, the appellanthas filed Tax Case (Appeal) No. 797 of 2010. 8. Subsequently, the appellant has filed another petitionin M.P. No. 259 of 2009 in I.T.A. No. 2259/Mds/2007, to recallthe order dated 04.04.2008 passed by the Tribunal, recording thewithdrawal of the appeal in I.T.A. No. 2259/Mds/2007 preferred bythe appellant. The Tribunal refused to accept the plea of theappellant to recall the order dated 04.04.2008 and dismissed theMiscellaneous Petition on 08.01.2010. This order dated08.01.2010 is the subject matter of Tax Case (Appeal) No. 870 of2010 filed by the appellant. 8. Subsequently, the appellant has filed another petitionin M.P. No. 259 of 2009 in I.T.A. No. 2259/Mds/2007, to recallthe order dated 04.04.2008 passed by the Tribunal, recording thewithdrawal of the appeal in I.T.A. No. 2259/Mds/2007 preferred bythe appellant. The Tribunal refused to accept the plea of theappellant to recall the order dated 04.04.2008 and dismissed theMiscellaneous Petition on 08.01.2010. This order dated08.01.2010 is the subject matter of Tax Case (Appeal) No. 870 of2010 filed by the appellant. 9. When these appeals are taken up for consideration, thelearned counsel for the appellant submitted that similarquestions of law raised in these appeals were already decided infavour of the appellant by the Honourable Supreme Court in (CITVs. Sarkar Builders) reported in 375 ITR 392. In that it washeld by the Honourable Supreme Court that when a housing projectis approved, with or without commercial user to the extentpermissible under the Rules/Regulations, then, deduction underSection 801B (10) would be allowed. In other words, if a projectcould be approved as a housing project having residential unitswith permissible commercial user, then it is not open to theincome tax authorities to contend that the expression 'housingproject' in Section 801B(10) is applicable to projects havingonly residential units. It was further held that amendment ofthe Act came into force on 01.04.2005 and as long as thedevelopment/construction commenced on or after 01.10.1998 andcompleted before 31.03.2005, the assessee is entitled to thededuction. Therefore, the learned counsel for the appellantsubmitted that in the light of the above decision of theHonourable Supreme Court, it has to be examined as to whether theappellant has completed the construction of the housing projectsbefore the amendment or after the coming into force of theamendment vis-a-vis the entitlement of the appellant to getdeduction under Section 801B (10) of the Act. 10. The learned counsel for the appellant also placedreliance on the decision of the Division Bench of the GujaratHigh Court in (Umakant Leasing and Financing Company vs. DeputyCommissioner of Income Tax reported in (2015) 57 Taxmann.com 4 (Gujarat) wherein it was observed, the assessee withdrew theappeal filed before Tribunal on the ground that they have alreadyobtained relief by way of rectification order passed by theCommissioner of Appeal. Subsequently, the Tribunal allowed theappeal filed by the Department and set aside the rectificationorder. In such event, the Assessee is entitled to recall theorder passed by the Tribunal, recording the withdrawal of theappeal filed by the assessee. By placing reliance on thisdecision, the learned counsel for the appellant would contendthat the appellant is entitled to recall the order of theTribunal, by which they were permitted to withdraw the appeal. 11. The learned Senior Standing Counsel appearing for therespondent has not disputed the ratio laid down in the abovedecisions. However, he would submit that the applicability ofthe above decisions have to be examined by the Tribunal and itcannot be gone into by this Court in these Tax Case Appeals.Therefore, he prayed this Court to remand the matter to theTribunal for fresh consideration. 12. In view of the above submissions of the learned counselfor both sides, the impugned orders passed by the Tribunal areset aside. The matters are remanded to the Tribunal for passingappropriate orders on merits and also in the light of thedecisions referred hereinabove. Such exercise shall be completedby the Tribunal as expeditiously as possible, after providingopportunity of hearing to the appellant. Accordingly, the TaxCase Appeals are disposed of. No costs. Sd/-Assistant Registrar(CS-VIII) //True Copy// kas/rsh Sub Assistant Registrar To 12. In view of the above submissions of the learned counselfor both sides, the impugned orders passed by the Tribunal areset aside. The matters are remanded to the Tribunal for passingappropriate orders on merits and also in the light of thedecisions referred hereinabove. Such exercise shall be completedby the Tribunal as expeditiously as possible, after providingopportunity of hearing to the appellant. Accordingly, the TaxCase Appeals are disposed of. No costs. Sd/-Assistant Registrar(CS-VIII) //True Copy// kas/rsh Sub Assistant Registrar To 1. The Assistant Commissioner of Income Tax Company Circle-IV (1) 121, Nungambakkam High Road Chennai 600 0342. The Income Tax Appellate Tribunal, Chennai, “B” Bench. 3. The Commissioner of Income Tax (Appeals)-V, Chennai. 4. The Income Tax Officer, Company Ward – IV(1), Chennai. +2ccs to M/s.G.Baskar, Advocate, S.R.Nos. 9308, 9309 TCA. Nos.797, 870 & 871/2010 SMI(CO)SU(29/03/2022)