Komal Enterprises Vs ITO (ITAT Mumbai)
The Income Tax Appellate Tribunal, Mumbai allowed the assessee’s appeals for Assessment Years 2011–12 and 2012–13, holding that reassessment proceedings initiated beyond four years from the end of the relevant assessment year, without any new tangible material, were invalid in law. The reassessments arose from original scrutiny assessments completed under section 143(3) of the Income-tax Act, 1961, in which deduction under section 80IB(10) for a housing project had been examined in detail and allowed.
Subsequently, the Assessing Officer issued notice under section 148 on 26 March 2018, alleging that the assessee was not eligible for the deduction because the project allegedly contained excess commercial area and certain residential units exceeded the prescribed built-up area, and that the project was situated within 25 km of Mumbai municipal limits. On this basis, the deduction of ₹3.40 crore under section 80IB(10) was disallowed in reassessment proceedings completed under section 143(3) read with section 147. The Commissioner (Appeals) upheld the reassessment and the disallowance.
Before the Tribunal, the assessee contended that all material facts relating to the housing project, including approvals, completion certificates, project layout, and the claim under section 80IB(10), were fully and truly disclosed during the original assessment. It was argued that the reassessment was based solely on a reappraisal of the same material and amounted to a mere change of opinion, impermissible after the expiry of four years in the absence of any failure on the part of the assessee to disclose material facts. The assessee also demonstrated that, as per the development agreement and sanctioned plans already on record, it had undertaken only residential buildings and had no rights in respect of any commercial construction.
