By K. B. Bhujle
Advocate
Principal CIT vs. Ambey Developer P.
Ltd.; 399 ITR 216 (P&H):
The assessee was a builder. For the A. Y.
2010-11, the assesee claimed deduction u/s. 80IB(10)(a) of the Act, in respect of the housing project completed
by it in the relevant year. The assessee had filed a completion certificate
from the Municipal Town Planner dated 30/12/2011 with a letter written to the
Commissioner dated 29/03/2010 for completion certificate. The Assessing Officer
held that the housing project approved on 01/04/2005 should have been completed
within five years from the end of the month in which it was approved, i.e.
31/03/2010. The Assessing Officer disallowed the claim for deduction u/s.
80IB(10) of the Act and added it back to the assessee’s taxable income. The
Commissioner (Appeals) allowed the deduction holding that delay in issuance of
the completion certificate was beyond the control of the assessee and was not
attributable to him. The Tribunal confirmed this.
On appeal by the Revenue, the Punjab and
Haryana High Court upheld the decision of the Tribunal and held as under:
“i) Though the words used in
clause (ii) of the Explanation to section 80-IB(10)(a) is “shall”, but it would
not necessarily mean that in every case, it shall be taken to be a mandatory
requirement. It would depend upon the intent of the Legislature and not the
language in which the provision is clothed. The meaning and the intent of the
Legislature would be gathered not on the basis of the phraseology of the
provision but taking into consideration its nature, its design and the
consequences which would follow from interpreting it in a particular way alone.
ii) The purport of clause (ii)
of the Explanation to section 80-IB(10)(a) of the Act is to safeguard the
interests of the Revenue wherever the construction has not been completed
within the stipulated period. Thus, it cannot mean that the requirement is
mandatory in nature and would disentitle an assessee to the benefit of section 80-IB(10)(a) of the Act even where
the assessee had completed the construction within the stipulated period and
had made an application to the local authority within the prescribed time. The
issuance of the requisite certificate is within the domain of the competent
authority over which the assessee has no control.
iii) The construction was
completed before the stipulated date, i.e., 31/03/2010 and the certificate of
completion was applied on 29/03/2010 and was issued to the assessee on
31/12/2011. The assessee in such circumstances could not be denied the benefit
of section 80-IB(10)(a) of the Act.”
