M/S.spr Buildersno v. The Income Tax Officer,Non Corporate Ward – 6(3)Chennai – 600 006

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 05.11.2020 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYANT.C.A.Nos.196, 197 & 198 of 2018andC.M.P.Nos.3235 to 3240 of 2018 M/s.SPR BuildersNo.57, Narayana Mudali Street,Sowcarpet,Chennai – 600 079PAN:ABEFS 7408K.. Appellant Versus The Income Tax Officer,Non Corporate Ward – 6(3)Chennai – 600 006... Respondent Prayer:- These Tax Case Appeals filed under Section 260 A of theIncome Tax Act, 1961 against the orders of the Income TaxAppellate Tribunal, ''B'' Bench, Chennai dated 28.07.2017 passedinI.T.A.No.2378/Mds/2014,I.T.A.No.2843/Mds/2016andI.T.A.No.3359/Mds/2016 relating to the Assessment Years 2010-11,2011-12 and 2012-13 respectively. Preferred against the orderpassed by commissioner of Income Tax Appeals(A)-IV, Chennai-34dated 11.06.2014 made in ITA 845/13-14 order passed by theCommissioner of Income Tax Appeals-5 dated 29.07.2016 and06.10.2016 ITA No.65/CIT(A)-5/2015-16, ITA No.66/CIT(A)-5/15-16preferred against the order passed by the Income Tax officer,Business ward-XII(3) dated 30.03.2013 and 31.03.2015 for theAssessment year 2010-11, 2011-12, 2012-13 respectively. For Appellant: Mr.A.S.Sriraman For M/s.S.Sridhar [in all T.C.As] For Respondent : Mr.T.Ravikumar Senior Standing counsel [in all T.C.As] COMMON JUDGMENT [Order of the Court was made by T.S.SIVAGNANAM, J.] These appeals have been filed by the assessee under Section260A of the Income Tax Act, 1961 ('the Act' for brevity), isdirected against the order dated 28.07.2017 passed by the IncomeTax Appellate Tribunal 'B' Bench, Chennai ('the Tribunal' forbrevity) in I.T.A.No.2378/Mds/2014, I.T.A.No.2843/Mds/2016 andI.T.A.No.3359/Mds/2016 for the Assessment Years 2010-11, 2011-12and 2012-13 respectively. These appeals were filed, raising thefollowing Substantial Questions of Law for consideration: “1. Whether the Appellate Tribunal is correct inapplying the amended provisions of law in section 80IB(10) of the Act to the residential units allottedmuch prior to the date of the said amendment ininsertion of clause(f) with effect from 1.4.2010 forprohibiting the claim of deduction of profits earnedfrom the housing project in the computation of taxabletotal income? 2. Whether the Appellate Tribunal is correct inreading the condition prescribed in clause (f) intoclause (c) below the section 80 IB (10) of the Actdespite the allotment of the disputed residentialunits by independent legal documents prior to theinsertion of clause (f)? 3. Whether the Appellate Tribunal is correct inapplying the inspection report carried after lapse ofthree years from the completion of the housing projectfor presuming violation of the conditions in section80 IB (10) of the Act to reject the claim fordeduction of profits earned from the housing projectin the computation of taxable total income? 4. Whether the Appellate Tribunal is correct inignoring the completion certificate issued by theCMDA, the competent authority who is empowered tocertify the completion of the project in accordancewith the planning permit issued for the housingproject while wrongly placed reliance upon the belatedinspection report to reject the claim for deduction ofprofits u/s 80 IB (10) of the Act in the computationof taxable total income? 5. Whether the Appellate Tribunal is competent toignore the evidence placed on record in three volumesto substantiate the compliance of all the conditionsin section 80 IB (10) of the Act while fortifying theclaim for such deduction in the computation of taxabletotal income as against the wrong reliance on thebelated inspection report? 6. Whether the Appellate Tribunal is correct inrejecting the claim for deduction u/s 80 IB (10) ofthe Act in its entirety despite the accepted legalposition for granting proportionate deduction takinginto consideration the violation of the conditions oncertain residential units in the housing project?” 5. Whether the Appellate Tribunal is competent toignore the evidence placed on record in three volumesto substantiate the compliance of all the conditionsin section 80 IB (10) of the Act while fortifying theclaim for such deduction in the computation of taxabletotal income as against the wrong reliance on thebelated inspection report? 6. Whether the Appellate Tribunal is correct inrejecting the claim for deduction u/s 80 IB (10) ofthe Act in its entirety despite the accepted legalposition for granting proportionate deduction takinginto consideration the violation of the conditions oncertain residential units in the housing project?” 2. We have heard Mr.A.S.Sriraman for M/s.S.Sridhar, learnedcounsel for the appellant / assessee and Mr.T.Ravikumar, learnedSenior Standing counsel for the respondent / Revenue. 3. The learned counsel for the appellant / assessee, oninstructions, submitted that the appellant / assessee intends toavail the benefit of Vivad Se Vishwas Scheme ('VVS Scheme' forbrevity) and in this regard, the assessee is taking steps tofile the application / declaration in Form No.I. 4. It may not be necessary for this Court to decide theSubstantial Questions of Law framed for consideration on accountof certain subsequent developments. The Government of Indiaenacted the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of2020) to provide for resolution of disputed tax and for mattersconnected therewith or incidental thereto. The Act of theParliament received the assent of the President on 17[th] March2020 and published in the Gazette of India on 17[th] March 2020. 5. In terms of the said Act, the assessee has been given anoption to put an end to the tax disputes, which may be pendingat different levels either before the First Appellate Authorityor before the Tribunal or before the High Court or before theHon'ble Supreme Court of India. Under Section 2(j) “disputedtax” has been defined. In terms of Section 3, where a declarantmeans a person, who files a declaration under Section 4 on orbefore the last date files a declaration to the designatedauthority in accordance with the provisions of Section 4 inrespect of tax arrears, then, notwithstanding anythingcontained in the Income Tax Act or any other law for the timebeing in force, the amount payable by the declarant shall bedetermined in terms of Section 3(a-c) thereunder. 6. The First Proviso to Section 3 states that in case, wherean Appeal or Writ Petition or Special Leave Petition is filed bythe Income Tax authority on any issue before the AppellateForum, the amount payable shall be one-half of the amount in thetable stipulated in Section 3 calculated on such issue, in sucha manner as may be prescribed. The second proviso deals with thecases, where the matter is before the Commissioner (Appeals) orbefore the Dispute Resolution Panel. The third proviso dealswith cases, where the issue is pending before the Income TaxAppellate Tribunal. The filing of the declaration is as per Section 4 of the Act and the particulars to be furnished arealso mentioned in the Sub Sections of Section 4. Section 5 ofthe Act deals with the time and manner of the payment andSection 6 deals with Immunity from initiation of proceedings inrespect of offence and imposition of penalty in certain cases.Section 9 of the Act deals with cases, where the Act 3 of 2020will not be applicable. 7. As observed, the assessee is given liberty to restorethese appeals in the event the ultimate decision to be taken onthe declaration to be filed by the assessee under Section 4 ofthe said Act is not in favour of the assessee. If such a prayeris made, the Registry shall entertain the prayer withoutinsisting upon any application to be filed for condonation ofdelay in restoration of the appeals and on such request made bythe assessee by filing a Miscellaneous Petition for Restoration,the Registry shall place such petition before the Division Benchfor orders. 7. As observed, the assessee is given liberty to restorethese appeals in the event the ultimate decision to be taken onthe declaration to be filed by the assessee under Section 4 ofthe said Act is not in favour of the assessee. If such a prayeris made, the Registry shall entertain the prayer withoutinsisting upon any application to be filed for condonation ofdelay in restoration of the appeals and on such request made bythe assessee by filing a Miscellaneous Petition for Restoration,the Registry shall place such petition before the Division Benchfor orders. 8. In the light of the above, we direct the appellant /assessee to file the Form No.I on or before 02.12.2020 and thecompetent authority shall process the application / declarationin accordance with the Act and pass appropriate orders asexpeditiously as possible preferably within a period of six (6)weeks from the date on which the declaration is filed in theproper form. 9. With this direction, the Tax Case Appeals stand disposedof with the aforementioned liberty and Consequently, theSubstantial Questions of Law are left open. No costs. Connectedmiscellaneous petitions are closed. Sd/- Assistant Registrar(CS VII) //True Copy// Kak Sub Assistant Registrar Index: Yes / NoInternet: Yes / NoSpeaking Order/Non-Speaking Order To 1. The Income Tax Appellate Tribunal, ' B' Bench, Chennai. 2.The Income Tax Officer,NM corporate land 6(3),Chennai.NM corporate land 6(3),Chennai. 3.The Commissioner of Income Tax,Appeals-IV, Chennai-34.Appeals-IV, Chennai-34. 4.The Commissioner of Income Tax,Appeals-V, Chennai-34.Appeals-V, Chennai-34. 5.The Income Tax Officer,Business ward XII(3),Chennai.Business ward XII(3),Chennai. +1cc to M/s.T.RaviKumar,Advocate, SR No.36037 T.C.A.Nos.196, 197 & 198 of 2018 BP(CO) B.VC (03/08/2021)