80IB(10) Deduction Denial for Housing Project: ITAT Restores ₹1.73 Cr Claim to AO Relying on SC Precedent on Architect's Completion Certificate [Read Order]
The Tribunal restored the assessee’s claim for deduction of Rs. 1.73 crore under Section 80IB(10), directing the AO to reconsider it in light of the Supreme Court’s ruling that an architect’s certificate can substantiate project completion.
![80IB(10) Deduction Denial for Housing Project: ITAT Restores ₹1.73 Cr Claim to AO Relying on SC Precedent on Architects Completion Certificate [Read Order]](https://images.taxscan.in/h-upload/2025/07/18/2064912-deduction-itat-taxscan.webp "80IB(10) Deduction Denial for Housing Project: ITAT Restores ₹1.73 Cr Claim to AO Relying on SC Precedent on Architects Completion Certificate [Read Order]")
The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) restored the matter to the Assessing Officer (AO) for fresh adjudication of a deduction claim of Rs. 1,73,68,000 under Section 80IB(10) of the Income Tax Act, 1961, in a case involving denial of the benefit for a housing project due to lack of a completion certificate from the local authority. Bee Gee Construction...
The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) restored the matter to the Assessing Officer (AO) for fresh adjudication of a deduction claim of Rs. 1,73,68,000 under Section 80IB(10) of the Income Tax Act, 1961, in a case involving denial of the benefit for a housing project due to lack of a completion certificate from the local authority.
Bee Gee Construction Co. (assessee), a partnership firm engaged in construction of residential flats, filed its return of income for Assessment Year (AY) 2012-13. The AO framed the assessment on a best judgment basis, denying the deduction under Section 80IB(10) as the assessee failed to furnish supporting evidence, including a project completion certificate.
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Aggrieved by the AO’s order, the assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) upheld the denial, observing that the project, approved on 24-05-2006, required completion by 31-03-2012 as per the provisions, but no completion certificate from the local authority was provided.
The CIT(A) emphasized that the Explanation to Section 80IB(10) mandates the completion date as the issuance of such a certificate by the local authority. Aggrieved by the CIT(A)’s order, the assessee appealed to the ITAT.
The assessee contended that it possessed an architect’s certificate confirming timely completion and relied on the Supreme Court’s decision in PCIT vs. Majestic Developers, which affirmed that under local laws like the Karnataka Municipal Corporations Act (similar to Punjab’s provisions), a completion certificate issued by a registered architect suffices, as authorities do not directly issue such certificates but rely on architect certifications for occupancy permissions.
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The two-member bench comprising Rajpal Yadav (Vice President) and Manoj Kumar Aggarwal (Accountant Member) observed that the lower authorities had not examined the merits of the architect’s certificate.
The bench noted that the assessment was ex parte, and the remand report from the AO merely opposed additional evidence without addressing substantive issues. It relied on the Supreme Court precedent in PCIT vs. Majestic Developers, which clarified that insistence on a local authority-issued completion certificate is misplaced when statutes require architect certification instead.
The bench also addressed a related penalty appeal under Section 271(1)(c), restoring it to the AO for adjudication post-quantum decision. It clarified that the restoration was without prejudice to the merits, allowing the AO liberty to verify documents afresh.
The Tribunal set aside the CIT(A)’s order and restored the matter for de-novo adjudication. The appeal of the assessee was partly allowed for statistical purposes.
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